MCA Notifies Ind AS Amendment Rules 2026, Revising Financial Instruments, Green-Power Contracts and Disclosures

The Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amendment Rules, 2026 through G.S.R. 725(E) dated 12 August 2026. The notification amends the Companies (Indian Accounting Standards) Rules, 2015 and introduces changes across Ind AS 101, Ind AS 107, Ind AS 109, Ind AS 110 and Ind AS 7.

The rules come into force from the date of publication in the Official Gazette. Several of the substantive accounting amendments are framed for annual reporting periods beginning on or after 1 April 2026, making the changes directly relevant to FY 2026-27 financial reporting.

Which Ind AS standards are affected?

The amendment package touches five standards. Ind AS 109 receives significant changes on classification and measurement of financial instruments, contractual cash-flow features, electronic payment settlement and contracts referencing nature-dependent electricity. Ind AS 107 is amended to add or refine related disclosure requirements. Ind AS 101 contains transition-related changes for first-time adopters, while Ind AS 110 and Ind AS 7 are also revised in specific areas.

Nature-dependent electricity contracts get dedicated accounting guidance

A major feature of the amendment is the introduction of specific requirements for contracts referencing nature-dependent electricity, a category relevant to arrangements such as electricity generated from sources whose output depends on natural conditions. The changes address how such contracts interact with financial-instrument accounting and, where the specified conditions are met, hedge-accounting requirements.

For companies with renewable-power arrangements, finance teams will need to identify contracts that fall within the amended framework, determine the accounting model that applies and collect the information required for the new disclosures. Auditors will likewise need to evaluate management's contract classification, judgments and supporting documentation.

Classification and measurement of financial instruments

The Ind AS 109 amendments also refine the assessment of contractual cash flows. This is particularly relevant where loan or financing terms contain contingent features, including features linked to environmental, sustainability or similar targets. The revised material is intended to clarify how such terms are assessed when determining whether contractual cash flows meet the applicable principal-and-interest characteristics.

Entities with sustainability-linked loans or other instruments containing contingent interest adjustments should therefore revisit the contractual terms rather than assuming that an earlier classification conclusion automatically continues under the amended standard.

Electronic payments and derecognition of liabilities

The notification also introduces guidance relating to settlement of financial liabilities through electronic payment systems. Under specified conditions, an entity may be able to treat a liability as discharged before the conventional settlement date. This area can affect period-end cut-off, cash and liability presentation and reconciliation procedures.

Companies using large-volume electronic payment processes should align accounting policies, treasury controls and closing procedures with the amended requirements. Audit teams should pay particular attention to the conditions supporting any earlier derecognition treatment.

Ind AS 107 disclosure changes

The amendments to Ind AS 107 expand disclosures connected with the affected financial instruments and nature-dependent electricity contracts. The package includes disclosure changes around instruments with contingent contractual cash-flow features and contracts that fall within the new electricity-related framework.

This means implementation is not limited to accounting entries. Financial-statement preparation teams will also need to update disclosure checklists, data requests and reporting templates so that the required qualitative and quantitative information is available at year-end.

Other changes to Ind AS 110 and Ind AS 7

The amendment package also revises material in Ind AS 110 concerning the assessment of control, including the treatment of de facto agents, and updates Ind AS 7 in relation to cash-flow reporting for investments in subsidiaries, associates and joint ventures accounted for using specified bases.

What CAs, auditors and finance teams should do now

- Map financial instruments and contracts that contain contingent, sustainability-linked or nature-dependent electricity features.

- Review electronic-payment settlement processes for possible period-end derecognition implications.

- Update Ind AS 107 disclosure checklists and year-end information requests.

- Reassess consolidation judgments where the amended Ind AS 110 guidance is relevant.

- Document transition and effective-date conclusions for FY 2026-27 reporting.

Official source

The Ministry of Corporate Affairs has published an official stakeholder announcement on the Companies (Indian Accounting Standards) Amendment Rules, 2026. The corresponding notification is G.S.R. 725(E), Gazette ID CG-DL-E-12082026-275402, dated 12 August 2026.

Key takeaway

G.S.R. 725(E) is not a narrow wording update. It affects practical accounting and disclosure areas that can reach treasury, renewable-power contracting, sustainability-linked financing, consolidation and year-end close processes. Ind AS companies and their auditors should complete an applicability review well before FY 2026-27 financial statements are finalised.