Assessing the Effects of Ind AS 115 Adoption on Key Financial Ratios: Evidence from India’s Listed Infrastructure entities

This study looks at the key financial ratios of the leading infrastructure and contracting firms in India for FY2016–17 through FY2023–24 in relation to the application of Ind AS 115, which is consistent with IFRS 15. We make use of secondary data from the annual reports and stock filings of the top ten listed contracting and infrastructure companies (by market capitalization) which were listed prior to the adoption of Ind AS. With the implementation of Ind AS 115 on April 1, 2018, revenue recognition in India was significantly changed from "risks and rewards" to "transfer of control," and new contract-related assets and liabilities were introduced. We compare pre-Indian GAAP/old Ind AS and post implementation of Ind AS in four categories: liquidity (e.g., current, quick), turnover (inventory, asset), leverage (debt/equity), and working capital metrics. A review of previous research (both Indian Ind AS 115 and global IFRS 15) reveals that IFRS 15 frequently changed balance-sheet classifications and deferred revenue. Using formulas like the current ratio and asset turnover, we create paired hypotheses regarding whether mean ratios changed significantly. Descriptive and inferential analysis are employed. These effects highlight the need for analysts to adjust ratio benchmarks post-2018.