You spread the statements in Phase 1 under Ind AS; here is the short list of Ind AS effects that materially change the analysis and that the capstone expects you to handle explicitly. Teach the economics once, then apply.
- Ind AS 116 (leases): the EBITDA comparability trap. Effective in India from 1 April 2019 (FY20), Ind AS 116 (the counterpart of IFRS 16) puts almost all leases on the balance sheet as a right-of-use (ROU) asset and a lease liability. Operating-lease rent, which used to sit in EBITDA as an operating expense, now splits into depreciation of the ROU asset and interest on the lease liability, both below EBITDA. The mechanical result: reported EBITDA jumps at FY20 for any lease-heavy business (retail, hotels, airlines, QSR) with no change in economics, and EBITDA/EBITDAR multiples are no longer comparable across the FY19→FY20 break or across companies that lease versus own. In your ten-year history you must either restate pre-FY20 years onto a consistent basis or flag the break; in your valuation, use EV that includes the lease liability as debt (or use pre-lease "EBITDAR" consistently), and never compare a lease-heavy Indian retailer's post-Ind-AS-116 EV/EBITDA to its own pre-FY20 multiple without the adjustment. This is the single most common Ind AS error in Indian analysis.
- The FY20 corporate-tax-cut break. In September 2019 India cut the base corporate tax rate; companies could opt into a regime with an effective rate of roughly 25% (from the older ~35%), and new manufacturers into ~17%. The effect on your history: the effective tax rate steps down at FY20/FY21 when your company opts in, so NOPAT, net margin, and ROIC jump for a reason that is fiscal, not operational. Normalize by using a consistent tax rate for the trend analysis and noting the year of the step. (This break coincides with the Ind AS 116 break, so FY20 is a double discontinuity in most Indian ten-year series; handle both.)
- Ind AS 115 (revenue). Effective FY19; the same five-step model as IFRS 15 / ASC 606. Watch gross-vs-net presentation (a marketplace or an agent shows net), contract assets/liabilities (deferred revenue), and over-time-vs-point-in-time recognition. The last is central for EPC/construction candidates (L&T), where percentage-of-completion revenue is an estimate and a fertile ground for both legitimate judgment and aggressive recognition.
- Consolidation: Ind AS 110/111/28 and the standalone-vs-consolidated gap. Subsidiaries (control) are line-by-line consolidated with a non-controlling interest; joint ventures and associates (significant influence) are carried by the equity method (one line, "share of profit of associates/JVs"). This is why the standalone and consolidated statements diverge, and the divergence is analytically loaded:
- Read the consolidated statements as the default, because they show the whole economic entity. But reconcile them against standalone, because the gap tells a story. A large chunk of consolidated profit sitting in subsidiaries (Marico's international business; Sun's Taro/US; Eicher's VECV JV) means your ROIC, growth, and moat analysis must be done at the consolidated level, and the quality of that subsidiary profit matters.
- The gap is also a governance signal. Where does the cash sit versus where the profit is booked? Profit trapped in a minority-owned or foreign subsidiary is worth less to you than profit in the wholly-owned parent (dividend leakage, minority claims, repatriation friction, tax). And a widening standalone-vs-consolidated gap with lots of inter-company flow is exactly where value can be routed (see the related-party trail). Always know which entity earns the money, owns the cash, and carries the debt.
- The Ind AS ↔ IFRS carve-outs that matter. Ind AS is IFRS with a handful of India carve-outs; two are worth naming in a capstone. Business combinations under common control are accounted for at book value via a capital reserve (not fair-valued through the income statement as under IFRS 3), which matters when your candidate does an intra-group merger. And certain foreign-currency and financial-instrument treatments differ. You do not need the full list; you need to know that when an Indian company restructures within its own group, the accounting can look unusually benign, and you read the substance.
- Schedule III presentation. Indian statements follow Schedule III, Division II (Ind AS format). Know the layout so you navigate at speed: current/non-current classification, the specific line items, and the mandated notes, including the newer disclosures on loans to promoters/KMP/related parties, benami property, wilful-defaulter status, and undisclosed income that Schedule III now requires and that are pure governance signal.