Ind AS 112 Disclosure of Interests in Other Entities: A Practitioner Guide for FY 2026-27
Ind AS 112 (Disclosure of Interests in Other Entities) is the Indian Accounting Standard that prescribes detailed disclosure requirements for interests in subsidiaries, joint arrangements, associates, and unconsolidated structured entities.
The Ministry of Corporate Affairs notified Ind AS 112 via the Companies (Indian Accounting Standards) Rules, 2015. Voluntary adoption began on 1 April 2015; mandatory application started from Phase I on 1 April 2016. The standard replaced fragmented disclosure rules previously found in AS 21, AS 23, and AS 27.
For FY 2026-27, conglomerates with multi-tier group structures must pay special attention. Family-owned business groups often require extensive structure notes to comply with Ind AS 112’s depth of disclosure.
Ind AS 112 at a Glance
Ind AS 112 establishes a unified disclosure framework for interests in subsidiaries, joint arrangements, associates, and structured entities. Its core principle is to enable users to evaluate both the nature and risks associated with these interests. Primary users include listed companies and large private groups preparing consolidated financial statements under Indian Accounting Standards.
| Field | Value |
|---|---|
| Standard Number | Ind AS 112 |
| Full Name | Disclosure of Interests in Other Entities |
| Issuing Body | ICAI (Accounting Standards Board) |
| Notified By | MCA, Companies (Indian Accounting Standards) Rules, 2015 |
| Effective Date | 1 April 2015 (voluntary), 1 April 2016 (mandatory Phase I) |
| Supersedes | Disclosure provisions previously scattered across AS 21, AS 23, AS 27 for Ind AS-applicable entities |
| Equivalent Standard | Disclosure provisions in AS 21, AS 23, AS 27 ↔ Ind AS 112 ↔ IFRS 12 |
| Applies To | All companies required to follow Indian Accounting Standards that have interests in subsidiaries, joint arrangements, associates, or unconsolidated structured entities. Ind AS 112 consolidates disclosure requirements that were previously scattered across multiple standards. |
What is Ind AS 112: Disclosure of Interests in Other Entities?
Ind AS 112 prescribes how an entity must disclose information about its interests in subsidiaries, joint arrangements (joint ventures and joint operations), associates, and unconsolidated structured entities. The standard aims to ensure users can assess the nature and extent of risks arising from these interests and their impact on the group’s financial position.
Historically, Indian GAAP scattered such disclosure requirements across several standards, AS 21 for subsidiaries and consolidation disclosures; AS 23 for associates; and AS 27 for joint ventures. ICAI introduced Ind AS 112 as part of India’s convergence with IFRS 12 to unify these disclosures into a single standardised framework.
Finance teams preparing consolidated financial statements under Indian Accounting Standards, especially those with complex group structures, are the main users of this standard.
Objective of Ind AS 112
Ind AS 112 requires entities to:
- Disclose information that enables users to evaluate the nature of, and risks associated with, their interests in other entities.
- Disclose effects of those interests on financial position, performance, and cash flows.
- Standardise disclosure requirements for subsidiaries (as per Ind AS 110), joint arrangements (as per Ind AS 111), associates (as per Ind AS 28), and unconsolidated structured entities.
A robust disclosure regime underpins the “true and fair view” required by Section 129 of the Companies Act, 2013. Transparent reporting ensures stakeholders understand group exposures beyond what is visible from consolidated numbers alone.
Who Must Apply Ind AS 112?
Entities covered, applicability table
Ind AS applicability follows a phased roadmap set by the Ministry of Corporate Affairs:
| Phase | Criteria | Effective Date |
|---|---|---|
| Phase I | Listed companies or unlisted companies with net worth ≥ Rs 500 crore | FY 2016-17 onwards |
| Phase II | Listed companies or unlisted companies with net worth ≥ Rs 250 crore but < Rs 500 crore | FY 2017-18 onwards |
| NBFCs, Phase I | NBFCs meeting Phase I criteria above | FY 2018-19 onwards |
| NBFCs, Phase II | NBFCs meeting Phase II criteria above | FY 2019-20 onwards |
Any company applying Indian Accounting Standards, and having interests in subsidiaries (per Ind AS 110), joint arrangements (per Ind AS 111), associates (per Ind AS 28), or unconsolidated structured entities, must comply with all relevant disclosures under Ind AS 112.
Scope exclusions
Entities do not apply Ind AS 112 to:
- Employee benefit plans covered by Ind AS 19
- Separate financial statements, these are governed by specific disclosures under Ind AS 27
- Interests classified solely as financial instruments under Ind AS 109 that do not meet definitions for subsidiary/joint arrangement/associate
When the standard does not apply
Employee benefit plans are covered under [Ind AS 19 Employee Benefits]. Separate financial statements use their own note formats as per [Ind AS 27]. Investments held purely as financial instruments are disclosed only under [Ind AS 109 Financial Instruments].
Key Definitions under Ind AS 112
| Term | Definition |
|---|---|
| Interest in another entity | Contractual or non-contractual involvement exposing an entity to variable returns from another entity’s performance. |
| Structured entity | Entity where voting rights do not determine control; activities are restricted by contract or design. |
| Significant restriction | Restriction limiting access to or use of group assets due to regulations or covenants. |
| Material subsidiary | Subsidiary significant enough to require separate summarised financial information disclosure. |
| Material associate / JV | Associate or JV significant enough to require separate summarised information disclosure. |
Recognition and Measurement under Ind AS 112
When to recognise
An entity must provide disclosures whenever it has an interest, contractual or non-contractual, in a subsidiary (as defined by [Ind AS 110]), a joint arrangement ([Ind AS 111]), an associate ([Ind AS 28]), or an unconsolidated structured entity during any reporting period.
The obligation arises irrespective of whether the interest results in consolidation or equity method accounting; even off-balance-sheet exposures through structured entities require detailed note disclosures if material.
Initial measurement
Ind AS 112 does not introduce new recognition or measurement criteria for investments themselves, it overlays existing standards ([Ind AS 110], [Ind AS 111], [Ind AS 28], [Ind AS 109]) by requiring additional disclosures about:
(a) Significant judgements made when determining whether control/joint control/significant influence exists (Para 7-9);
(b) Details about each material subsidiary/joint arrangement/associate, including name, country of incorporation/principal place of business;
(c) Summarised financial information for each material entity before inter-group eliminations;
(d) Nature and extent of risks arising from these relationships.
**Disclosure formula:**
For each material investee:
- Name + country + principal activities
- Ownership % + voting rights %
- Summarised revenue/profit/assets/liabilities/cash flows
- NCI details if applicable
- Restrictions/contingencies/commitments
Subsequent measurement
Disclosures must be updated every reporting period based on current facts:
Materiality governs detail, material subsidiaries/JVs/associates require individual summarised disclosures; immaterial ones may be aggregated by type (Para 21B). If there are significant restrictions on fund transfers within the group, for example due to foreign exchange controls or lender covenants, both qualitative explanations and quantitative figures must be provided (Para 13).
Where contingent liabilities exist at associate/JV level attributable proportionally to the investor group, they must be disclosed alongside any commitments made on behalf of these investees (Para 23).
For unconsolidated structured entities sponsored but not controlled by the reporting group, the following must be disclosed:
(a) Nature/purpose/size/activities;
(b) Financing structure;
(c) Support provided historically or expected support;
(d) Maximum exposure to loss from involvement.
Consolidated Disclosure Framework Across Group Standards
Before introduction of this standard by ICAI’s Accounting Standards Board as part of IFRS convergence efforts:
Disclosures were fragmented across three legacy standards, subsidiaries under old-AS 21; associates under old-AS 23; JVs under old-AS 27. This caused inconsistency and incomplete risk visibility especially where complex structures existed.
Now all such disclosures sit within one logical note structure:
Significant judgements regarding control/joint control/significant influence;
Detailed composition note covering all subsidiaries/JVs/associates;
Summarised data for each material investee;
Aggregated data for immaterial investees;
Risks, including liquidity support provided, to unconsolidated structured entities.
Materiality remains central, detailed line-by-line data is expected only where exposures could significantly affect user understanding.
In our audit practice we frequently observe that failure to disclose significant restrictions on subsidiary fund transfers is a common compliance gap flagged during statutory audits conducted per SA 700 requirements.
Worked Examples on Ind AS 112
Example 1: Disclosure for subsidiary with material NCI
Maharashtra Holdings owns a controlling stake (60%) in Maharashtra Cement Ltd, a material subsidiary, with non-controlling interest (“NCI”) holding the remaining shares (40%). Maharashtra Cement’s annual revenue stands at Rs 800 crore; profit attributable to NCI totals Rs 24 crore; accumulated NCI amounts to Rs 320 crore.
Required computation/disclosure items
| Item | Figure / Description | Reference / Note |
|---|---|---|
| Subsidiary name | Maharashtra Cement Ltd | Material subsidiary |
| Country/principal activities | India / Cement manufacturing | As per Para 10 |
| Voting rights vs ownership % | Ownership: 60%; Voting rights: 60% | Para 10 |
| Profit attributable to NCI | Rs 24 crore | Para 12 |
| Accumulated NCI | Rs 320 crore | Para 12 |
| Summarised revenue | Rs 800 crore | Before inter-group eliminations |
| Summarised profit | Company-level profit split | |
| Summarised assets/liabilities | As per CFS note |
Journal entry:
No accounting entry arises directly from this requirement; all items are presented via detailed notes within consolidated financial statements as mandated by Paras 10-13.
Example 2: Material joint venture disclosure
Krishna Industries holds a significant equity investment, a full half-share, in Krishna-Sundaram JV (“joint venture”), which qualifies as material for consolidated reporting purposes. Carrying value stands at Rs 100 crore; JV’s annual revenue is Rs 250 crore with net profit at Rs 30 crore.
Required computation/disclosure items
| Item | Figure / Description | Reference / Note |
|---|---|---|
| Joint venture name | Krishna-Sundaram JV | Material JV |
| Country/principal activities | India / Manufacturing | Para 21 |
| Ownership % | Krishna Industries holds: 50% | |
| Method of accounting | Equity method | As per Para 21 |
| JV revenue | Rs 250 crore | |
| JV net profit | Rs 30 crore | |
| Share of profit recognised | Rs 15 crore | Investor’s share = 50% x Rs 30 crore |
| Carrying amount | Rs 100 crore | Balance sheet value |
Journal entry:
No direct journal entry results from this note requirement; instead Krishna Industries discloses its investment carrying amount alongside summarised JV financials within its CFS notes as required by Paras 21-23.
Disclosure Requirements under Ind AS 112
Schedule III to the Companies Act, 2013, requires consolidated financial statements to present a true and fair view. Ind AS 112 prescribes detailed disclosures to ensure users understand the nature, extent, and risks of an entity’s interests in subsidiaries, joint arrangements, associates, and structured entities.
| Item | Requirement | Para Reference |
|---|---|---|
| Significant judgements and assumptions | Determining control, joint control, significant influence, classification of joint arrangements, control of structured entities | Para 7-9 |
| Composition of group | List of subsidiaries with country, ownership %, voting rights if different | Para 10 |
| Non-controlling interest information | Summarised financial information for subsidiaries with material NCI | Para 12 |
| Restrictions | On ability of group entities to transfer cash and other assets | Para 13 |
| Material associates and joint ventures | Summarised financial information including revenue, profit/loss, total comprehensive income, current/non-current assets and liabilities | Para 21 |
| Aggregated info for immaterial associates/JVs | By type | Para 21B |
| Risks associated with interests | Including contingent liabilities and commitments related to associates/JVs | Para 23 |
| Unconsolidated structured entities | Nature, purpose, size, activities, financing arrangements, support provided | Para 24-31 |
Auditors must verify that all disclosures required under Ind AS 112 are complete and consistent with the group’s structure note as part of their opinion under SA 700.
Common Mistakes & Industry-Specific Considerations
Common errors auditors flag
- Inadequate disclosure of significant judgements in determining control or joint control
- Aggregating material associates or joint ventures that require separate summarised disclosure
- Missing restrictions disclosure (e.g., regulatory dividend payout restrictions on subsidiaries)
- Inadequate structured entity disclosure, especially for sponsored but not consolidated entities
- Failing to disclose contingent liabilities of associates or joint ventures (investor's share of contingencies)
- Inconsistency between Ind AS 112 and segment reporting (Ind AS 108) on subsidiary classifications
Industry application notes
Conglomerates with multi-tier structures must present detailed group composition notes. Family business groups often have complex cross-holdings, each layer’s disclosures must align with Ind AS 112 requirements for transparency.
Banks regularly sponsor trusts or securitisation vehicles. Even when these are not consolidated under Ind AS 110, banks must disclose their exposure and support arrangements as unconsolidated structured entities.
Investment companies and Alternative Investment Funds (AIFs) classified as investment entities under Ind AS 110 measure subsidiaries at fair value. Here, Ind AS 112 focuses more on portfolio-level disclosures than traditional line-by-line subsidiary details.
Ind AS 112 vs Disclosure provisions in AS 21, AS 23, AS 27 vs IFRS: Key Differences
Ind AS 112 unifies all major group entity disclosure requirements that were previously scattered across multiple Accounting Standards. The table below outlines the key differences between Indian GAAP (AS), Ind AS 112, and IFRS 12:
| Aspect | AS (21/23/27) | Ind AS (112) | IFRS (12) |
|---|---|---|---|
| Scope | Disclosure scattered across standards | Single unified disclosure standard | Same as Ind AS |
| Significant judgements | Limited | Required (Para 7-9) | Required |
| Material associate summarised info | Encouraged | Required (Para 21) | Required |
| Structured entities | Not addressed | Specific disclosures (Para 24-31) | Specific disclosures |
| Restrictions disclosure | Limited | Required (Para 13) | Required |
India’s version of this standard largely mirrors IFRS 12 issued by the International Accounting Standards Board. However, minor wording differences may exist due to Indian legal references. No significant carve-outs exist for FY 2026-27; Indian companies applying Ind AS 112 can rely on international best practice for comparability.
Latest Amendments to Ind AS 112 (FY 2026-27)
No amendments have been notified to Ind AS 112 for FY 2026-27 as of 2026-05-02. The standard continues to apply in its existing form.
Related Standards You Should Know
- [Ind AS 110](/ind-as-110-consolidated-financial-statements/), Subsidiary identification and consolidation; Ind AS 112 disclosures cover subsidiaries.
- [Ind AS 111](/ind-as-111-joint-arrangements/), Joint arrangements, Ind AS 112 disclosures cover joint operations and joint ventures.
- [Ind AS 28](/ind-as-28-investments-in-associates/), Associates, Ind AS 112 covers disclosure of associate interests.
- [Ind AS 27](/ind-as-27-separate-financial-statements/), Separate FS, has separate disclosure requirements.
- [Ind AS 24](/ind-as-24-related-party-disclosures/), Related party, subsidiaries/associates/JVs are related parties.
Need Help with Ind AS 112 Compliance?
Patron Accounting LLP supports listed companies and large private groups in meeting all aspects of Ind AS 112 compliance. Our team combines technical expertise with hands-on experience across industries to deliver clear solutions for complex group structures.
Services include:
- Statutory Audit
- Ind AS Advisory
- Financial Reporting & Schedule III
- Disclosure Review
Schedule a 30-minute consultation with our Ind AS team, Pune · Mumbai · Delhi · Gurugram.
Frequently Asked Questions (FAQs)
Any company preparing financial statements under Indian Accounting Standards that has interests in subsidiaries, joint arrangements (joint ventures or operations), associates, or unconsolidated structured entities must comply fully with the disclosure requirements of Ind AS 112.
A material subsidiary is one whose financial position or performance is significant to the group. For each material subsidiary, including those with substantial non-controlling interest, the entity must provide separate summarised financial information before inter-group eliminations as per Para 12.
Under previous Indian GAAP (AS 21/23/27), disclosures were fragmented across several standards. Ind AS 112 consolidates all such requirements into one unified standard aligned closely with IFRS 12 for global comparability.
For unconsolidated structured entities, such as trusts or securitisation vehicles, the standard requires disclosure about their nature, purpose, size, activities, financing arrangements, historical support provided by the reporting entity, and maximum exposure to loss from involvement.
No. Summarised financial information is required only for individually material associates or joint ventures. For immaterial ones taken together by type, aggregated information suffices as per Para 21B.
Entities must disclose significant judgements made in determining whether they control another entity or have joint control/significant influence. This includes classification decisions regarding subsidiaries versus JVs versus associates per Paras 7-9.
Restrictions include any legal or contractual limitations on transferring cash or assets within the group, for example due to regulatory requirements or loan covenants, as specified in Para 13. Both qualitative explanations and quantitative figures are needed if material.
Investment companies classified as investment entities under Ind AS 110 measure most subsidiaries at fair value through profit or loss. Their disclosures focus on portfolio-level exposures rather than detailed line-by-line data about each investee.
Yes. The investor’s share of any contingent liabilities incurred jointly with an associate or JV, or its own commitments relating to these investees, must be disclosed separately according to Para 23.
Auditors must evaluate whether all required disclosures have been made completely and accurately under SA 700 when forming their audit opinion on consolidated financial statements prepared per Schedule III and relevant accounting standards including Ind AS 112.
About This Article
Reviewed by CA & CS Team · Patron Accounting LLP
Technical reviewer: CA Sundram Gupta, FCA
Last reviewed: 2026-05-02
Sources: ICAI Compendium of Accounting Standards · MCA Notification (Companies (Indian Accounting Standards) Rules, 2015, dated 16 February 2015) · IFRS Foundation