At the end of every financial year, companies have to show how much their business is worth to their stakeholders in form of a balance sheet. Although you can show your revenue and expenditure in terms of number. in the case of other things i.e. their machinery, office furniture, building, etc. They can't only show it that they have three buildings and four machinery, They also have to show how much the machinery and buildings are worth now after regular wear and tear. Therefore to calculate those values they need to follow some set of rules i.e. IND AS. Before diving into the depth of IND AS 116 let us understand how IND AS was formed.