Industry-specific and Regulated Sector Reporting (Banking, Insurance, NBFC, Power, Real Estate, Mutual Funds, Broker-Dealers)
Banking, insurance, NBFC, power, real estate, mutual fund and broker-dealer reporting apply the same Ind ASs with sector overlays.
Core rules
- Banks and NBFCs: classify advances, recognise ECL under Ind AS 109, apply income recognition norms and disclose restructured accounts. NBFC scale-based regulation affects governance and capital, not the accounting model.
- Insurers: Ind AS 117 uses fulfilment cash flows and contractual service margin; revenue is insurance revenue, not premium.
- Power: tariff-regulated entities may apply Ind AS 114 regulatory deferral accounts, recognising regulatory assets and liabilities with separate presentation.
- Real estate: Ind AS 115 may require over-time recognition where the buyer controls the asset as constructed; otherwise at a point in time.
- Mutual funds: investments at fair value through P&L; NAV is the key disclosure.
- Broker-dealers: distinguish principal from agent, and client money from own balances.
Worked example
A bank has exposure of ₹1,000 crore, PD 1% and LGD 45%. ECL = ₹4.5 crore. If the account is restructured, the bank assesses whether the modification is substantial; if not, it adjusts the carrying amount and recognises the difference in P&L.
Traps
- Using incurred-loss provisioning instead of ECL.
- Treating all real estate revenue at handover.
- Netting regulatory deferral balances against PPE.
- Recognising insurance premiums as revenue under Ind AS 117.