Which Accounting Rules Apply to a Listed Company, and Why

Two separate sets of rules govern a listed company's reporting, and they are constantly confused. One set governs how the figures are measured: the accounting standards, given legal force through company law. The other governs what must be published, when, and to whom: the listing obligations, set by the securities regulator and the exchange. The two sets answer different questions, so a company can measure everything correctly and still breach the second set entirely.

The problem is older than any regulator, and an ordinary household version shows its shape. Someone runs a small canteen inside an office building, and a brother has lent the money to buy the equipment. He wants two different things from the operator and they are genuinely different things. The first is that when the operator reports what the canteen earned last month, the number should be arrived at honestly: the unpaid tabs of the office staff should not be counted as money in hand, and the fridge should not be treated as a cost of one month when it will run for six years. The second is that he should hear at all, at a settled time, rather than whenever the operator feels like calling. A truthful number that reaches him eleven months late is not much use to him. A prompt call carrying a made-up number is worse.

Honest measurement and prompt reporting are two separate promises, and each can be kept while the other is broken. Measuring a business and telling people about it are different activities with different failure modes. Two bodies of rules exist rather than one for exactly that reason. A rule about how to value stock protects a reader from a wrong number. A rule requiring results to be published within a fixed period after a reporting period ends protects that reader from a number that arrives too late to be acted on. Neither rule substitutes for the other, and no amount of care in one buys anything in the other.

Who writes each set and who enforces it, what changes for an outside reader on the day a company lists, how to establish what applies to a particular company today rather than when somebody wrote a summary, and why a clean audit opinion says nothing at all about half of the picture all follow from that separation. Anjani Stationers, an invented printer of school notebooks, shows in its own accounts exactly how much a reader misses when figures arrive once a year.

Which rules govern how the figures themselves are measured?

The measurement rules are the accounting standardsA written rule saying how a particular item in a set of accounts must be measured, presented and described, so that two different preparers reach the same treatment for the same facts.. The standards are the answer to a question that gets asked thousands of times inside one set of accounts: given what happened, what number goes on this line? When a customer has been billed but has not paid, what goes into revenue and what goes into receivables. When a van will be driven for six years, how much of its cost belongs to this year. When a school has been overdue for months, how much of the amount owing should still be carried as an asset. Every one of those is a measurement question, and every one of them has a rule sitting behind it.

The measurement rules decide what number goes on a line, and their force comes from company law rather than from the professional body that drafts them. The two-step arrangement explains why a professional recommendation ends up binding a company, and it is worth holding on to. The Institute of Chartered Accountants of India (ICAI) formulates the standards. The Central Government then notifies them as rules made under the Companies Act, and it is that notification that makes them statutorySet out in an Act of Parliament, or in rules made under one, so it carries the force of law rather than the weight of professional advice. rather than advisory. The Institute's own listing of these instruments names them as the Companies (Accounting Standards) Rules and the Companies (Indian Accounting Standards) Rules, in each case notified by the Central Government under the Companies Act.

The plural in that sentence matters. There is more than one set of accounting standards rules. Which one a particular company must apply is decided by criteria written into those rules themselves, and those criteria are read at the source. The shape is the point: a company does not choose its measurement rules, it falls inside a set of them, and the test that decides which set is written down in a document that can be read.

Which rules govern what must be published, and are they the same rules?

They are not the same rules, they are not written by the same people, and they do not answer the same question. The publication rules govern disclosureTelling something publicly, in a form and at a time somebody else has fixed, rather than only recording it internally or mentioning it when asked.: what a company must tell the market, in what form, by when, and to whom. Not one line of that is a measurement question. A company could arrive at every figure in its accounts flawlessly and still have told nobody about any of them.

In India the publication rules sit in regulations made by the Securities and Exchange Board of India (SEBI), whose own preamble states its purpose as being "to protect the interests of investors in securities" and to promote the development of and regulate the securities market. The instrument that carries the continuing obligations of a listed entity is titled the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The regulator's own site carries it, and carries beside it the date it was last amended.

The publication rules exist because a correct number nobody receives is not information, and the timetable they impose is set by the regulator rather than by the company. The name of that instrument carries some history. Before those regulations, much of what a listed company had to publish sat in a listing agreement, a contract between the company and the exchange. The regulator's own press release on the regulations says they would "consolidate and streamline the provisions of existing listing agreements" across the segments of the capital market. So the obligations moved from a contract, signed by two parties, into regulations, made by a regulator. The move from contract to regulation says more about the character of these rules than a list of them would.

Who writes each set, and who enforces them?

Different people write them and, more usefully for a reader, different people catch a breach of each. The writing comes first. On the measurement side, the standards are formulated by the Institute of Chartered Accountants of India, whose Accounting Standards Board was, in the Board's own words, "constituted by the ICAI in 1977" to formulate accounting standards for a sound and reliable financial reporting system, and to harmonise the accounting policies and practices in use across India. The standards then become binding on companies through notification by the Central Government under the Companies Act, administered by the Ministry of Corporate Affairs (MCA). On the publication side, the rules are made by the securities regulatorA body given legal power to make and enforce rules over a defined activity, and to act against those who break them., and the stock exchangeThe organised marketplace where listed shares are bought and sold, which also watches whether the companies trading on it are meeting their continuing obligations. where the shares trade adds requirements of its own.

The more practical half is who catches what. A measurement failure is found in the audit and a publication failure is found in the records of the exchange and the regulator, and neither process is capable of catching the other's failure. An auditor works through the accounts asking whether each figure was arrived at under the applicable standards. Whether each figure was arrived at under the standards is the whole of the auditor's question about measurement, and it is answered by looking at the company's books and evidence. Nobody in that process is holding a calendar. The exchange and the regulator, meanwhile, hold something the auditor does not: a record of what arrived from the company and on what date. The exchange and the regulator are not re-measuring anything. They are checking arrivals against a timetable.

A school requires both that a student's answers be their own work and that the paper be handed in by a stated time. The invigilator collecting papers knows exactly who was late and knows nothing about who copied. The examiner marking the scripts knows exactly who copied and has no idea who was late. Two checks, two checkers, two records, and a student can fail either one while sailing through the other. The arrangement over a listed company has the same architecture, and that architecture is the reason the failure described below arises at all.

What changes when a company lists on an exchange?

Two things change, and one of them matters far more to a reader than the other. The first is that the measurement rules may change. Which set of accounting standards rules a company falls into is decided by criteria in those rules, and a company's status is one of the things those criteria look at. The change is real, and the criteria themselves are read at the source. The second change is the one felt immediately. A listed companyA company whose shares have been admitted to trading on a stock exchange, so members of the public can buy and sell them without dealing with the company itself. takes on a continuing obligation to publish, on a timetable it does not set, and that single fact changes an outside reader's position more than any measurement rule does.

Sit with what an outside reader has when a company is unlisted. Once a year, a set of financial statements is prepared, audited and filed. Between one filing and the next, nothing is required to reach that reader. Not a warning, not an update, not a correction. If something went badly wrong in the third month of the year, the reader learns about it when the annual statements land, and by then it has had nine more months to develop. The reader is not being deceived. The reader is simply outside a room whose door opens once a year.

Listing puts a listing obligationA continuing duty a company takes on by being listed, covering what it must tell the exchange and the public and by when, for as long as it stays listed. on top of that. The annual statements still come. Listing adds a set of publication points inside the year, on a timetable fixed in the listing regulations rather than by the company's own convenience. How many such points there are, and by when each must arrive, is set in a document that has been amended as recently as January 2026 on the regulator's own record, and is read there. The structural change holds without any risk of being wrong: from one door opening a year to several, and from the company choosing when to speak to the company being told when.

How does a reader find out what actually applies to a particular company?

The answer is a routine rather than a list, for a reason worth stating before the routine itself. A list of obligations is correct on the day it is written and gives no signal at all when it stops being correct. A list does not fade. It does not carry a warning. It reads exactly as confidently the day after an amendment as the day before one. And an amendment is not a remote possibility: the regulator's own site carries the listing regulations under a title recording that they were last amended on 22 January 2026. Any summary of them written before that date is now wrong wherever the amendment touched.

Establishing what applies to a particular company is a four-step routine that ends at a primary source with a date written beside the finding, and step four is the one everybody drops. Both rule sets begin with an applicability question, so the first step is to establish what kind of company is in question. The second is to go to the measurement rules: the rules notified under the Companies Act, carried on mca.gov.in and cross-referenced by the Institute at icai.org. The third is to go to the publication rules at sebi.gov.in, and then to the exchange for anything the exchange adds on its own account. The fourth is to write the date of the check down beside what was found, in the working file rather than in memory.

Step four is the one people drop, and dropping it is what turns a good answer into a bad one over time. A finding with no date attached looks identical at six months and at six years. Meera Rao keeps Anjani Stationers' books three days a week and writes the date at the top of every stock count sheet rather than trusting that she will remember which week it was taken. She would recognise the discipline instantly. A count is only useful if the date it was taken is known. A rule is only useful if the date it was read is known.

The reader has no way to tell a stale rule from a current one, so a specific frequency or deadline stated confidently and wrongly is worse than no statement at all. Nothing on the face of a wrong figure says it is wrong. The structure is stable and holds; the terms are not, and the terms belong at the source.

What happens when the two rule sets pull in different directions?

Most of the time they do not meet at all, because they are asking about different things. Where they do meet is on matters that both a measurement rule and a publication rule have something to say about. Suppose that the measurement rules require a particular matter to be set out in the notes to the annual financial statements, and the listing rules require the same matter to be told to the exchange as well. The company does not get to pick the one it prefers. Both apply to it, so both must be satisfied, and satisfying both means satisfying whichever of the two is tighter.

Where two sets of rules both bind the same company, the stricter obligation governs. Complying with the more lenient one is not a defence against the other. The stricter-governs rule sounds obvious written down and is not obvious in practice. The natural instinct of somebody preparing accounts is to find the rule that covers the situation and stop reading. The habit worth building is the opposite: having found a rule that covers the situation in one set, the preparer asks whether the other set also has something to say about it, and if it does, takes the tighter of the two. Taking the tighter of the two is right every time, and it removes any need to argue about which body's rule outranks which.

A household version makes the shape obvious. A building's rules allow a washing machine to run until ten at night. The tenancy agreement with the landlord allows nothing after nine. The tenant does not get to choose the building's rule because it is more generous. Stopping at nine satisfies both. There was never a conflict to resolve, so nobody had to decide whether the building or the landlord ranks higher. There was only a tighter constraint and a looser one, and meeting the tighter one meets both.

What does this look like for one actual business?

Anjani Stationers is an unlisted private company that prints school notebooks. In year two it billed schools Rs 2,70,00,000 and earned a profit of Rs 30,00,000, down from Rs 38,00,000 the year before. Its assets stood at Rs 1,80,00,000 against liabilities of Rs 38,00,000, leaving equity of Rs 1,42,00,000. Its trade receivables, the money schools had been billed for and had not paid, stood at Rs 95,00,000.

Because it is unlisted, its measurement rules are whichever set of accounting standards rules its class of company falls inside, and its statements are prepared, audited and filed once a year. Nothing whatever requires it to tell an outside reader anything between one filing and the next. So Anjani Stationers' Rs 78,00,000 of receivables at the end of year one reached an outside reader on exactly one day of that year, having risen Rs 48,00,000 from the Rs 30,00,000 it closed the previous year with.

Look at what that costs a reader who wants to understand the business rather than just record it. Receivables ran at 15.4 per cent of revenue at the end of year zero, then 32.5 per cent, then 35.2 per cent. Expressed as days of sales, that is 56 days, then 119, then 128. A collection problem that took two years to build reached an outside reader as three numbers, two years apart, and the reader was invited to work out from three dots what had happened over seven hundred and thirty days.

Now imagine the same business listed, and imagine nothing else about it changing: same schools, same notebooks, same Anjani Kulkarni signing the cheques. Two things would be different. Which set of accounting standards rules applies is decided by criteria that look at a company's status among other things, so its measurement rules might change. And a second obligation would appear on top of the annual filing: publication points inside the year, on a timetable set in the listing regulations rather than by the company. The reader's position would change from three dots in two years to something denser, and the density is not the company's choice.

How do a lender, an analyst and an investor actually use this split?

A lender is deciding whether to hand over money and then watching whether the borrower is still worth having lent to, so a lender uses the split first and most bluntly. Against an unlisted borrower, a lender knows the public record gives it one look a year, so it writes its own reporting into the loan agreement instead: monthly or quarterly statements sent directly to the bank, a receivables ageing, a stock statement. A lender lending to an unlisted business builds a private version of the publication rules into its contract, precisely because the public ones do not reach it. The private arrangement shows that the two rule sets are not an accident of Indian law. They are two needs, and where the second one is not supplied by regulation, somebody creates it by agreement.

An analyst uses the split as a sorting device before doing any work at all. Given a question about a company, the first move is to decide which of the two sets it belongs to. The set decides which document will answer the question and how long the answer will take. "Is this depreciation charge reasonable?" is a measurement question and the answer lives in the standards and in the company's own accounting policy note. "Why did this reach the market only in March?" is a publication question and the answer lives in the listing regulations and in the record of what the company filed and when. An analyst who does not sort the question first spends an hour in the wrong document.

An investor's use is quieter and comes down to expectations. A holder of shares in a listed company is entitled to expect that something arrives inside the year, on a schedule that does not depend on the company's mood. A holder of a stake in an unlisted business, whether a share in a cousin's workshop or a partnership in a shop, is entitled to expect nothing of the kind unless it was put in writing at the time of investing. Many people discover this only when they want to know how a business is doing and find that they have no right to be told until the annual accounts appear. The disappointment is real and it is not anybody's misconduct. It is the structure.

Anjani Kulkarni, who runs Anjani Stationers and signs its cheques, will never read a listing regulation. But nothing in law obliges him to publish a receivables statement, and his bank asks him for one every quarter all the same. The request is the whole separation in one habit. The bank could not wait for the door to open once a year, so it wrote itself a key.

What should a reader carry away when opening any set of accounts?

One habit, and it takes about four seconds. Before the search for an answer begins, the question is sorted into one of the two sets. A question about whether a figure is right and a question about whether it arrived in time are answered in completely different documents, by completely different bodies, and confusing them is what sends readers to the wrong place for an hour.

The sorting rule in its plainest form runs as follows. A question about how a number was arrived at belongs to the measurement rules, and the answer sits in the accounting standards and in the company's own accounting policy note. A question about what was disclosed, when it was disclosed, or why it was not disclosed sooner belongs to the publication rules, and the answer sits in the listing regulations and in the record of what the company filed and when. Almost every question anyone asks about a set of accounts falls cleanly into one of those two buckets.

The sorting rule is small and stable. Everything that could change with an amendment sits where it is set, in documents the four-step routine locates. The separation itself holds whatever the regulator does next, and the separation is worth more than any list of terms. It carries into any market in the world and remains true there.

Anjani Stationers Private Limited, Anjani Kulkarni and Meera Rao are invented.
Educational material. Not advice on any investment, tax, budget or market position.