MCA Notifies Key Amendments to Ind AS: Major Changes from 1 April 2026

The Ministry of Corporate Affairs (MCA), in consultation with the National Financial Reporting Authority (NFRA), has notified the Companies (Indian Accounting Standards) Amendment Rules, 2026 through Notification G.S.R. 725(E) dated 12 August 2026. The amendments revise Ind AS 101, 107, 109, 110 and Ind AS 7, with several provisions applicable for annual reporting periods beginning on or after 1 April 2026. (Gazette Tracker)

Key Amendments at a Glance

The amendments introduce important changes in financial instrument accounting, hedge accounting, disclosures and cash-flow reporting.

1. Ind AS 101 – First-time Adoption of Ind AS

Ind AS 101 has been amended to incorporate the Annual Improvements to Ind AS (2024).

• New paragraphs 39AJ and 39AK have been inserted.

• Amendments to paragraphs B5 and B6 clarify the treatment of hedge accounting relationships at the date of transition to Ind AS.

• These amendments apply for annual reporting periods beginning on or after 1 April 2026. (Gazette Tracker)

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2. Ind AS 107 – Financial Instruments: Disclosures

Ind AS 107 introduces enhanced disclosure requirements, particularly for financial instruments and nature-dependent electricity contracts.

Companies will need to provide information regarding:

• Contingent contractual terms that may change contractual cash flows.

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• The possible financial impact of such contractual features.

• Nature-dependent electricity contracts and their effect on future cash flows and financial performance.

• Electricity purchased, unused electricity sold and related costs.

• Certain hedge-accounting information by risk category. (Gazette Tracker)

These changes are particularly relevant for entities entering into renewable-energy or electricity arrangements where generation depends on uncontrollable natural conditions such as weather.

3. Ind AS 109 – Financial Instruments

Ind AS 109 contains some of the most significant changes.

The amendments address:

• Contracts referencing nature-dependent electricity.

• Classification and measurement of financial instruments.

• Derecognition of financial liabilities through electronic payment systems.

• Non-recourse financial assets and assessment of contractual cash flows.

• Hedge accounting for forecast electricity transactions.

An entity may, subject to specified conditions, treat a financial liability as discharged before the settlement date when payment has been initiated through an electronic payment system and the relevant withdrawal, access and settlement-risk conditions are satisfied. (Gazette Tracker)

For nature-dependent electricity contracts, Ind AS 109 also permits specified hedge-accounting treatment where the variable amount of forecast electricity transactions is aligned with the electricity expected to be generated.

4. Ind AS 110 – Consolidated Financial Statements

Ind AS 110 has been amended in relation to the assessment of a de facto agent.

An investor is required to consider the decision-making rights and indirect exposure to variable returns arising through a de facto agent when assessing whether it controls an investee. The related amendment applies for annual reporting periods beginning on or after 1 April 2026. (Gazette Tracker)

5. Ind AS 7 – Statement of Cash Flows

Ind AS 7 has been amended in relation to investments in associates, joint ventures and subsidiaries accounted for at cost.

Paragraph 37 now clarifies that an investor restricts its cash-flow reporting to cash flows between itself and the investee, such as dividends and advances. The amendment applies for annual reporting periods beginning on or after 1 April 2026. (Gazette Tracker)

What Companies Should Do

Entities preparing financial statements under Ind AS should assess the amendments before finalising their financial statements for periods beginning on or after 1 April 2026.

Key actions include:

• Review financial instrument contracts and accounting policies.

• Identify electronic payment arrangements that may qualify for the revised derecognition treatment.

• Assess renewable-energy and nature-dependent electricity contracts.

• Review existing hedge-accounting relationships.

• Update financial statement disclosures and accounting documentation.

• Evaluate whether comparative information or transition adjustments are required.

• Coordinate with auditors and finance teams on implementation.

The Companies (Indian Accounting Standards) Amendment Rules, 2026 came into force on publication in the Official Gazette. The notification was issued under section 133 read with section 469 of the Companies Act, 2013, in consultation with NFRA. (Gazette Tracker)

Conclusion

The 2026 Ind AS amendments bring Indian accounting requirements closer to evolving international financial reporting practices, while introducing specific guidance for electronic payment settlements and nature-dependent electricity contracts. Companies should review the impact on their accounting policies, financial instruments, hedge relationships and disclosures well before preparing their FY 2026-27 financial statements.

For expert guidance on this topic, contact your tax professional today.

Source: MCA Notification G.S.R. 725(E), dated 12 August 2026, Companies (Indian Accounting Standards) Amendment Rules, 2026. (Gazette Tracker)

EXCERPT: MCA has amended Ind AS 101, 107, 109, 110 and 7, covering financial instruments, electronic payments, hedge accounting and electricity contracts.

SEO_TITLE: Ind AS Amendments 2026: Key MCA Changes

SEO_DESCRIPTION: Explore the 2026 Ind AS amendments on financial instruments, hedge accounting and electricity contracts. Read the key changes and act now.