Adjustment in Book Profits mandates phased recognition of transition amount on IND AS adoption, with full adjustment on disposal.

Section 115JB(2C) requires that for the year of convergence and each of the four previous years the book profit be increased or decreased by one fifth of the transition amount, with the full relatable amounts taken in the year of retirement, disposal, realisation or transfer of specified assets, investments or foreign operations. The "transition amount" is defined as adjustments to other equity on the convergence date, excluding specified OCI reclassifications, revaluation surplus, certain fair value equity instrument gains/losses, deemed cost adjustments for PPE/intangibles and investments, and cumulative translation differences.

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