Three standards produce most of the difference between one framework and another
IFRS 15, IFRS 16 and IFRS 9 are where conversion projects spend their time and where restatements come from. They are also the three areas where the IASB has been most active recently: amendments to the classification and measurement of financial instruments took effect on 1 January 2026, a post-implementation review of IFRS 16 was due to report in the fourth quarter of 2026, and a request for information on IFRS 9 hedge accounting was expected in September 2026. This guide sets out what each standard requires, where the judgement sits, and what changed most recently.
- The five-step revenue model, and the three places judgement genuinely bites
- Why IFRS 16 put almost every lease on the balance sheet, and what it did to reported margins
- IFRS 9 classification, expected credit losses, and the amendments effective 1 January 2026
Revenue: the model is five steps, the difficulty is in three of them
IFRS 15 replaced a rules-driven patchwork with one model applied to every contract with a customer: identify the contract, identify the performance obligations, determine the transaction price, allocate it, and recognise revenue as each obligation is satisfied. The structure is simple. Steps two, three and five are where two competent accountants reach different answers.
Identifying performance obligations
Whether a contract contains one promise or four decides the shape of the revenue profile. Software with implementation services, equipment with installation and maintenance, and a construction contract with distinct phases are all cases where the unbundling decision changes the timing of everything downstream.
Variable consideration
Discounts, rebates, penalties, performance bonuses and rights of return all have to be estimated and constrained, meaning revenue is recognised only to the extent it is highly probable a significant reversal will not occur. This is an estimate revisited at every reporting date, not set once.
Over time or at a point in time
Whether an obligation is satisfied over time or at a point in time is the difference between recognising revenue through a project and recognising it at the end. For engineering, construction and real estate businesses it is the single most consequential judgement in the accounts.
Where Indian entities most often get a surprise. Principal versus agent. A business that has always reported gross revenue can find that under a control-based assessment it is an agent, and reports a fee instead of a turnover figure. Nothing about the cash changes. The top line can fall by an order of magnitude, which is a conversation to have with the board before it appears in a draft.
Leases: the balance sheet grew, and so did EBITDA
IFRS 16 removed the lessee distinction between operating and finance leases. A lessee recognises a right-of-use asset and a lease liability for substantially all leases, with limited exemptions for short-term and low-value leases. Lessor accounting was largely left alone, so the two sides of the same contract are still accounted for on different models.
What it did to the numbers
Rent expense, previously a single operating charge, became depreciation on the right-of-use asset plus interest on the liability. EBITDA rises, because the whole charge moves below it. Operating cash flow improves and financing cash flow worsens, because the principal element of the lease payment moves. Gearing rises, because a liability appeared that was previously disclosed in a note. None of these is an improvement or a deterioration in the business. All of them can breach a covenant written before the standard took effect.
Where the judgement is
The lease term, principally the treatment of extension and termination options, and the discount rate. Both are estimates and both have a large effect on the reported liability, which is why they dominated the post-implementation review of IFRS 16.
That review has now concluded. In July 2026 the IASB decided unanimously that IFRS 16 is working as intended overall, and that it had done sufficient work to close the review. The project summary and feedback statement is expected in the fourth quarter of 2026. Two follow-on projects were confirmed and are the accurate guide to what could still change: a research project on reducing the ongoing cost of lessee measurement, looking at remeasurement frequency and simplified discount rates, and a narrow-scope project clarifying rent concession accounting. Nothing else raised in the review is being taken forward.
Financial instruments, including what changed on 1 January 2026
IFRS 9 covers classification and measurement, impairment and hedge accounting. Two parts of it generate most of the work for a non-financial business, and one of them changed recently.
Classification and measurement
A financial asset is measured at amortised cost, at fair value through other comprehensive income, or at fair value through profit or loss, determined by the business model within which it is held and by whether its cash flows are solely payments of principal and interest. The second test is the one that catches structured or contingent terms sitting inside ordinary commercial agreements.
Expected credit losses
Impairment is forward-looking. A loss allowance is recognised from initial recognition, before anything has gone wrong, based on expected rather than incurred losses. For a business whose receivables are its main financial asset this is the part of IFRS 9 that applies day to day, and the simplified approach for trade receivables is where most of the practical work sits.
The amendments effective 1 January 2026
Amendments to the classification and measurement of financial instruments, issued in May 2024, take effect for annual reporting periods beginning on or after 1 January 2026, amending IFRS 7, IFRS 9 and IFRS 19. Separately, amendments on contracts referencing nature-dependent electricity, issued in December 2024, take effect on the same date. The second set matters to anyone holding a renewable power purchase agreement, which increasingly means ordinary industrial businesses rather than only energy companies.
Hedge accounting, under review
A request for information on the post-implementation review of IFRS 9 hedge accounting was expected in September 2026, and a separate exposure draft on risk mitigation accounting was out for comment with a deadline of 30 November 2026. Hedge accounting is therefore an area to watch rather than to treat as settled.
Where these three standards land differently
Insurance
Insurance contracts are governed by IFRS 17, which has applied since 1 January 2023 and which replaced a standard that had permitted a wide range of national practices to continue. It is a different measurement model rather than a variation on one, and an insurer's conversion is a different project from the one described in these pages. For the Indian position, and the reason it also catches entities that are not insurers, see guide 1.
Real estate and construction
The over time versus point in time judgement under IFRS 15 decides when revenue on a development appears, and IFRS 16 decides how ground leases and long leasehold interests are carried. Those two questions together determine most of what a real estate business's accounts look like.
Technology and services
Multi-element arrangements, usage-based and consumption-based pricing, and contract costs including the capitalisation of costs to obtain a contract. Revenue for a subscription business is rarely the invoiced amount, and the difference is not intuitive to a founder reading their own accounts for the first time.
Non-banking financial companies and banks are in opposite positions
These two are routinely lumped together and should not be. One applies Ind AS with a prudential floor bolted on top. The other does not apply Ind AS at all. Position stated as at August 2026, and this is the fastest-moving section on any of these pages.
Non-banking financial companies: in scope, with an overlay
NBFCs, housing finance companies and asset reconstruction companies apply Ind AS, phased in by net worth and listing status from 1 April 2018 for the largest and 1 April 2019 for the next tier, with smaller unlisted entities remaining on the older Accounting Standards. One point general guidance often gets wrong: unlike the corporate roadmap, voluntary early adoption is not permitted for NBFCs.
The substance for a reader is the Reserve Bank of India prudential overlay that sits on top of Ind AS 109, not the standard itself. There is a rebuttable presumption of a significant increase in credit risk at thirty days past due, rebuttable only with documentation and Audit Committee approval and never deferrable beyond sixty days. There is a mandatory note comparing Ind AS 109 impairment allowances against income recognition and asset classification provisioning, by asset class. And where the Ind AS allowance is lower, the shortfall is appropriated from post-tax profit into an Impairment Reserve which does not count towards regulatory capital and cannot be released without prior approval. There is no relief in the other direction.
Scheduled commercial banks: not on Ind AS
Ind AS does not apply to banks. Adoption was deferred in 2018 and again in March 2019 until further notice, pending amendments to the Third Schedule to the Banking Regulation Act 1949, which prescribes a statutory format incompatible with Ind AS presentation. No revised roadmap has been announced.
What the Reserve Bank of India has done instead is converge piecewise: an Ind AS 109-style investment classification architecture from 1 April 2024, and an expected credit loss provisioning framework effective 1 April 2027 with stage-wise and product-wise prudential floors, the day one adjustment taken to retained earnings rather than profit or loss, and a capital add-back glide path. The distinction that matters is that this is a prudential framework, not Ind AS adoption. Indian banks will produce expected-credit-loss-shaped provisioning numbers without producing Ind AS financial statements.
Where Ind AS 109 and IFRS 9 actually differ for a lender. The recognition and measurement of expected credit losses is essentially identical. The live differences are that Ind AS removes the IFRS 9 option to continue applying the older hedge accounting requirements, and removes the option for macro fair value hedge accounting of interest rate risk. Both matter to banks and large NBFCs. But the economic divergence is not in the standard at all: it is the regulatory floor sitting on top of it. An IFRS-trained reader comparing an Indian NBFC with a European bank has to read the provisioning comparison in the notes, not just the expected credit loss line.
Deliberately stated without percentages. The prudential floors and glide-path fractions are precise numbers that move, and we do not publish them from secondary sources. Ask us for the current figures against the source directions. Insurers are covered in guide 1 rather than here.
Where this sits
IFRS Advisory
The overview page, with all five guides listed and the situations each one answers.
Ind AS and IFRS: Where They Differ
Guide 1. The diagnosis: what is actually different between the framework you use and the one you are asked for.
Converting to IFRS
Guide 2. IFRS 1, the transition date, the elections, and the reconciliations a first IFRS set of accounts must disclose.
Revenue, Leases and Financial Instruments
Guide 3. IFRS 15, IFRS 16 and IFRS 9, plus the amendments effective 1 January 2026.
Consolidation, Business Combinations and Foreign Currency
Guide 4. IFRS 3, IFRS 10, IAS 28 and IAS 21.
What Changes Next
Guide 5. IFRS 18 and IFRS 19 from 1 January 2027, and where sustainability reporting has got to.
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This page is general information, not professional advice. IFRS Accounting Standards, the Indian Accounting Standards notified under section 133 of the Companies Act 2013, and the tax law that interacts with both, all change frequently, and how any of it applies depends on your own facts. The Income-tax Act 2025 replaced the 1961 Act with effect from 1 April 2026. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.