For the purpose of\napplicability of Accounting Standards (\u201cAS\u201d), The Institute of Chartered\nAccountants of India (\u201cICAI\u201d) has classified the entities into two segments \u2013\ncompany entities and non-company entities. Non-company entities such as sole\nproprietors, partnership firms, trusts, Hindu Undivided Families, association\nof persons and co-operative societies are further classified into various\nlevels. Currently, the ICAI has categorized non-company entities into 3 levels.<\/p>\n\n\n\n
With increasing number of\nnon-company entities, the ICAI has, now, further\nclassified them into 4 levels. The amendments have been brought to reduce\nstringency on non-company entities which were earlier required to comply with\nall AS in pursuance of being level I entities as the norms for the same have\nbeen revised.<\/p>\n\n\n\n
Non-company entities on which Ind AS is not applicable. It\nshould be noted that such entities have been classified in 4 levels basis\ndifferent criteria including turnover and borrowing and classified as large \u2013\nmedium \u2013 small and micro entities- last three referred to as MSMEs.<\/p>\n\n\n\n
Entities belonging to level II, III, IV have been granted\ncertain exemption. It is to be noted that the applicability of AS has been made\nmilder as one goes down the four level of entities i.e to say, maximum\nrelaxations \/ exemptions are given to level IV e<\/p>\n\n\n\n