The CBDT has issued a Notification dated 31st March 2015 notifying the Income Computation and Disclosure Standards (ICDS) to be followed by all income-tax assessees following the mercantile system of accounting for the purposes of computation of income chargeable to tax under the heads “Profit and gains of business or profession” or “Income from other sources”.
The ICDS come into force with effect from 1st April 2015 and accordingly, shall apply to the assessment year 2016-17 and subsequent assessment years. The details of ICDSs notified are as under.
ICDS I: Accounting Policies
ICDS II: Valuation of Inventories
ICDS III: Construction Contracts
ICDS IV: Revenue Recognition
ICDS V: Tangible Fixed Assets
ICDS VI: The effects of changes in foreign exchange rates
ICDS VII: Government Grants
ICDS VIII: Securities
ICDS IX: Borrowing Costs
ICDS X: Provisions, Contingent liabilities and Contingent assets
These ICDS are not for the purpose of maintenance of books of account.