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Top IND AS Interview Questions and Answers for CA

Prepare for CA and Big 4 interviews with the most commonly asked IND AS interview questions and answers. Learn practical concepts of IND AS 115, IND AS 116, IND AS 2, impairment testing, lease accounting, revenue recognition, and financial reporting with real examples designed for CA students, articleship trainees, and finance professionals in India.

22 May, 2026

Introduction

So you have cleared your CA exams, or you are somewhere in between articleship and that first real job. Either way, one thing that every CA student dreads is the technical round of an interview especially when the interviewer looks at you and says, "Tell me about IND AS 115."
Do not worry. This blog breaks down the most commonly asked IND AS questions in CA interviews from Big 4 firms to mid-size audit firms to corporate finance roles in simple language, with real examples.

Bookmark this. Read it the night before your interview.

Why Do Interviewers Love IND AS Questions?

Here is a simple truth: IND AS (Indian Accounting Standards) is the backbone of financial reporting for companies in India today. If you have done your articleship with a listed company or a large unlisted company, you have worked with IND AS. So when an interviewer asks you about it, they are not testing your memory they are testing whether you actually understood what you were doing during those three years.
They want to know: Can this person apply the standard to a real-life situation, or did they just mug it up?

IND AS Applicability — The First Question Almost Every Interviewer Asks

Q1: Which companies need to follow IND AS in India?

This one comes up in almost every interview. The answer has two phases:

Listed Entities: All companies listed or in the process of listing on stock exchanges in India or abroad.
Large Unlisted Companies: Unlisted companies with a net worth of ₹250 crore or more.
NBFCs (Non-Banking Financial Companies): Listed and unlisted NBFCs with a net worth of ₹250 crore or more.
Holdings and Subsidiaries: All holding, subsidiary, joint venture, and associate companies of the entities mentioned above.
Financial Institutions: Banks and insurance companies (based on regulatory notification from IRDA/RBI)

Pro tip: If you say "all listed companies follow IND AS," the interviewer will follow up with the net worth thresholds. Be ready for that.

IND AS 115 — Revenue Recognition (Most Asked, Period)

Q2: Explain the five-step model under IND AS 115.
This is perhaps the most frequently asked IND AS question in CA interviews.
Here are the five steps:

Identify the contract with the customer
Identify the performance obligations in the contract
Determine the transaction price
Allocate the transaction price to each performance obligation
Recognise revenue when (or as) each obligation is satisfied

Example: Think of a software company selling a licence + one year of support for ₹10 lakh. Under IND AS 115, these are two separate performance obligations. The ₹10 lakh will be split between the licence and the support service based on their standalone selling prices. Revenue for the licence is recognised upfront, while support revenue is spread over 12 months.

Since revenue recognition and lease accounting are among the most practically tested areas in CA and Big 4 interviews, many students also spend time strengthening real-world application through programmes like the Master Blaster of Ind AS alongside their technical preparation.

Q3: What is a practical expedient under IND AS 115?
A practical expedient is basically a shortcut the standard allows to reduce the accounting burden when the result would be similar anyway.
For example, if a contract is for one year or less, a company does not need to disclose the remaining performance obligations.

IND AS 116 — Leases

Q4: How has IND AS 116 changed lease accounting?
Before IND AS 116, operating leases were off-balance-sheet companies just showed rent expense in the P&L. IND AS 116 changed this fundamentally. Now, almost every lease has to come onto the balance sheet.
The lessee recognises:

A Right-of-Use (ROU) asset — representing the right to use the leased asset
A Lease liability — representing the obligation to pay future rentals

This is why you will see companies like airline firms or retail chains show much larger balance sheets after adoption of this standard. Think of a company like a retail chain leasing 100 store locations all of those leases now show up on the balance sheet.

Q5: What are the exceptions under IND AS 116?
There are two exemptions where a company does not need to create an ROU asset:

Short-term leases — lease term of 12 months or less
Low-value assets — assets that are individually low in value (like laptops, small office equipment)
Management Intention — If management intends to exercise a renewal option, that additional period must be included in the lease term, which may push it beyond 12 months, removing eligibility for the short-term exemption.

Q6: How do you record the ROU asset journal entry?
ROU Asset A/c Dr.

To Lease Liability A/c

Subsequently, the ROU asset is depreciated, and the lease liability is unwound using the effective interest method.

How to Calculate Interest (Effective Interest Method):

Interest is calculated on the opening lease liability balance for each period using the implicit interest rate:

Interest = Opening Lease Liability × Interest Rate
Example:

Lease Liability at start of Year 1 = ₹1,00,000
Interest Rate = 10%
Annual Lease Payment = ₹20,000

Year	Opening Liability	Interest @10%	Payment	Closing Liability
1	1,00,000	10,000	20,000	90,000
2	90,000	9,000	20,000	79,000
3	79,000	7,900	20,000	66,900

Journal Entry for interest unwinding each year:
Interest Expense A/c Dr. ₹10,000
To Lease Liability A/c ₹10,000
Lease Liability A/c Dr. ₹20,000
To Bank A/c ₹20,000

So each year, the liability reduces not by the full payment, but payment minus interest exactly like a loan amortization schedule.

IND AS 2 — Inventories

Q7: What are the methods for valuing inventory under IND AS 2?

IND AS 2 allows only two methods:

FIFO (First In, First Out)
Weighted Average Cost

Note: LIFO is not permitted under IND AS 2. This is a common trick question. Many students say "LIFO is also allowed" it is not.
Also remember: Inventory is valued at the lower of cost or net realisable value (NRV).
Example: If a company manufactures steel rods and the market price falls below production cost, the inventory must be written down to NRV. This hits the P&L immediately you cannot carry it at cost just hoping prices recover.

IND AS 36 — Impairment of Assets

Q8: What do you understand by impairment?
An asset is impaired when its carrying amount (book value) is more than its recoverable amount. Recoverable amount is the higher of:

Fair value less costs of disposal, and
Value in use (present value of future cash flows from the asset)

Real example: A manufacturing plant had a book value of ₹50 crore. Due to a technology shift, its value in use is now only ₹30 crore. The company must recognise an impairment loss of ₹20 crore.

Q9: What triggers an impairment test?

You do not do this test every year for all assets only when there is an indication of impairment. Indicators include a decline in market value, significant changes in technology or market conditions, or internal evidence like asset underperformance. However, goodwill and indefinite-life intangibles must be tested for impairment every year, regardless.

Many CA students preparing for interviews also build practical placement skills through the Getting Placement Ready Workshop covering resumes, LinkedIn, GDs, mock interviews, and domain guidance.

IND AS 33 — Earnings Per Share

Q10: What is diluted EPS and what is anti-dilutive?

Basic EPS = Net profit ÷ Weighted average shares outstanding

Diluted EPS accounts for potential shares that could be issued — from ESOPs, convertible debentures, warrants, etc.

An instrument is anti-dilutive if including it would increase EPS instead of reducing it. Anti-dilutive instruments are excluded from the diluted EPS calculation.

IND AS 109 — Financial Instruments

Q11: Can you explain the classification of financial assets under IND AS 109?
Under IND AS 109, financial assets are classified into three categories based on the Business Model Test and the SPPI Test (Solely Payments of Principal and Interest):

Amortised Cost — Held to collect contractual cash flows. Example: Bank loans, held-to-maturity bonds.
FVOCI — Held both to collect cash flows and to sell. Gains/losses go to OCI. Example: Actively managed debt portfolios.
FVTPL — Everything else; gains/losses hit P&L directly. Example: Trading equity shares.

Quick tip: Equity instruments can be measured at FVOCI through an irrevocable election, but unlike debt, gains/losses are never recycled to P&L.

Q12: What is the Expected Credit Loss (ECL) model?
IND AS 109 replaced the old "incurred loss" model with a forward-looking ECL model companies provision for losses they expect, not just losses that have already occurred.

General Approach — For loans; tracks 3 stages. Stage 1: 12-month ECL, Stage 2 & 3: Lifetime ECL.
Simplified Approach — For trade receivables; always recognise lifetime ECL from day one.

Example: A debtor outstanding for 180 days must be provisioned based on expected recovery probability even before an actual default occurs.

IND AS 37 — Provisions, Contingent Liabilities, and Contingent Assets

Q13: When do you recognise a provision vs disclose a contingent liability?

Provision: Recognised when there is a present obligation, it is probable (more likely than not) that an outflow will be required, and the amount can be reliably estimated.
Contingent liability: Disclosed in the notes when the outflow is possible but not probable, or when the amount cannot be reliably estimated.
Contingent asset: Never recognised only disclosed when inflow is probable.

Think of a company fighting a tax demand of ₹5 crore. If the legal team says they are likely to lose, it is a provision. If it is a 50-50 situation, it is a contingent liability.

Quick Interview Tips Specific to IND AS

Always connect theory to your articleship. If you audited a manufacturing client, relate impairment and inventory to that experience.
Know the key differences between old AS and IND AS — interviewers love asking this, especially for IND AS 12, IND AS 17 vs IND AS 116, and IND AS 18 vs IND AS 115.
Practice journal entries for IND AS 116 ROU asset, IND AS 19 actuarial losses (OCI), and IND AS 102 (Share-based payments).
Read the ICAI Technical Guide for any standard you have practically applied during articleship.

Wrapping Up

IND AS is not just a syllabus topic anymore it is something you will live with every day as a CA. Whether you are joining an audit firm, an industry role, or a consultancy, understanding how these standards actually work (not just their definitions) is what will make you stand out.
The interviewers asking these questions have applied these standards themselves. They are not looking for textbook answers. They want to see whether you understand why a standard exists and how it changes the way a company's financials look.
Prepare these topics well, connect them to real examples, and you will walk into that interview room with confidence.

All the best!

Also read: How to Gain Practical Experience in IND AS Financial Statements

Frequently Asked Questions

1. Which IND AS standards are most frequently asked in CA interviews?
Ans. The most commonly asked IND AS interview topics include IND AS 115 (Revenue Recognition), IND AS 116 (Leases), IND AS 2 (Inventories), IND AS 36 (Impairment of Assets), IND AS 109 (Financial Instruments), and IND AS 37 (Provisions and Contingent Liabilities).

2. How should CA students prepare for IND AS interview questions?
Ans. CA students should focus on understanding practical applications, journal entries, financial statement impact, and real-life business examples instead of memorising definitions.

3. Why is IND AS 115 considered important in Big 4 interviews?
Ans. IND AS 115 is one of the most important accounting standards because it changes how companies recognise revenue. Interviewers ask IND AS 115 questions to test whether candidates understand performance obligations, transaction price allocation, and practical revenue recognition concepts in real business situations.

4. Is practical knowledge of IND AS more important than theory in interviews?
Ans. Yes. Most interviewers expect candidates to explain how IND AS works in actual audits, financial reporting, and client situations. Professionals who can connect standards like IND AS 115 and IND AS 116 with practical financial statement impact including insights gained through programmes like the Master Blaster of Ind AS usually perform better in technical interview rounds.

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