Impact of Fair Value Measurement on the Financial Position and Performance of NBFC's Adopting Ind AS- An Insightful Discussion

Abstract

Non- Baking Financial Companies (NBFCs) have taken a very significant role in the financial sector of India. These companies have adopted Ind AS mandatorily in a phased manner commencing from 1^st April 2018. Ind AS is a set of accounting standards that align with International Financial Reporting Standards (IFRS) with a view to enhance the quality of financial information, transparency, comparability, and acceptability from a global perspective. One of the critical aspects of Ind AS is the measurement of the Fair Value of the assets and liabilities. It intends to reflect the current market expectations of the cash flows.

The paper aims to analyse the impact of fair value measurement on NBFCs adopting Ind AS. Further, it also explains the problems and opportunities of Fair Value Measurement. Finally, the paper intends to provide certain policy recommendations mitigating the challenges involved with fair value measurement.