The Ministry of Corporate Affairs, through G.S.R. 725(E) dated 12th August 2026, notified the Companies (Indian Accounting Standards) Amendment Rules, 2026, further amending the Companies (Indian Accounting Standards) Rules, 2015. The rules were made under Section 133 read with Section 469 of the Companies Act, 2013, in consultation with the National Financial Reporting Authority (NFRA), and came into force on the date of publication in the Official Gazette.

The amendments align Ind AS with the corresponding IFRS amendments issued by the IASB and touch five standards: Ind AS 101 (First-time Adoption), Ind AS 107 (Financial Instruments: Disclosures), Ind AS 109 (Financial Instruments), Ind AS 110 (Consolidated Financial Statements) and Ind AS 7 (Statement of Cash Flows).

What Changed, Standard by Standard

StandardKey change
Ind AS 101Inserted transitional guidance (para 39AK) and substituted Appendix B paragraphs B5–B6 on hedge relationships at the date of transition, plus a consequential update to Appendix 1.
Ind AS 107New paragraphs 5B–5D and a new disclosure section, “Contracts referencing nature-dependent electricity” (paras 30A–30C), requiring a single dedicated note on such contracts. Also expanded disclosures on investments in equity instruments designated at fair value through OCI (paras 11A, 11B) and added new disclosures on contingent contractual cash flow terms (paras 20B–20D), e.g. loans whose cash flows change based on ESG/carbon-linked triggers.
Ind AS 109Amendments on classification and measurement of financial instruments, treatment of contracts to buy/sell nature-dependent electricity (e.g. solar/wind power purchase agreements), hedge accounting refinements, and settlement of financial liabilities via electronic payment systems.
Ind AS 110Clarifications relating to de facto agents in assessing control.
Ind AS 7Amendments to cash-flow reporting for investments in associates, joint ventures and subsidiaries.

Most amendments apply for annual reporting periods beginning on or after 1 April 2026. Two areas — classification and measurement of financial instruments, and contracts referencing nature-dependent electricity — carry their own specific transition provisions rather than following the general effective date.

Who This Affects

These amendments apply to companies that are required to prepare financial statements under Ind AS — i.e., companies covered by the Companies (Indian Accounting Standards) Rules, 2015 (broadly, listed companies, and unlisted companies/NBFCs above the prescribed net worth thresholds). Companies preparing accounts under AS (Accounting Standards) rather than Ind AS are not directly affected by this notification.

The nature-dependent electricity provisions are particularly relevant for companies with power purchase agreements (PPAs) for renewable energy — a growing category given India’s corporate push toward solar and wind sourcing — since these contracts often sit in a grey zone between “own-use” executory contracts and derivatives under Ind AS 109.

Key Takeaways

  • MCA notified the Companies (Indian Accounting Standards) Amendment Rules, 2026 on 12 August 2026 (G.S.R. 725(E)), effective immediately from Gazette publication.
  • The amendments touch Ind AS 101, 107, 109, 110 and 7, with the most substantive changes relating to classification/measurement of financial instruments and a new disclosure regime for nature-dependent electricity contracts (relevant to renewable PPAs).
  • Most changes apply prospectively for annual reporting periods beginning on or after 1 April 2026; financial instrument classification/measurement and nature-dependent electricity provisions have their own transition rules — companies preparing for FY 2026-27 Ind AS financials should review these early with their auditors.

Source

Ministry of Corporate Affairs, Notification G.S.R. 725(E) dated 12th August 2026 — Companies (Indian Accounting Standards) Amendment Rules, 2026: mca.gov.in – Notifications & Circulars

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