In February 2020, MCA notified the new CARO 2020, thereby, replacing the erstwhile CARO 2016. The new CARO 2020 has introduced a number of new or modified reporting requirements to be fulfilled by the auditors such as revaluation of property, plant, and equipment (including the right of use assets) or intangible assets, Benami property, working capital limits on basis of security of current assets, granting loans or advances in the nature of loans which are either repayable on demand or
Tag: Accounting Standard
Ind AS 109: Treatment of dues recoverable on account of invocation of bank guarantee in the balance sheet
Today we are going to discuss about – Ind AS 109: Treatment of dues recoverable on account of invocation of bank guarantee in the balance sheet Query: Company X Ltd. provides financial assistance for procurement of raw material to Y Ltd. Wherein Y Ltd. defaulted in repayment of dues to X Ltd. Subsequently BG was invoked by X Ltd. However, the respective bank has not honored/paid the invoked amount of BG to X ltd. as on 31st March of the
Financial Guarantee under IND AS: All you need to know for practical implementation
Financial Guarantee: Meaning: A contract that requires the issuer (Guarantor) to make specified payments to reimburse the holder (loan giver) for a loss it incurs because a specified debtor (loan taker) fails to make payment when due in accordance with a debt instrument. Condition for classifying an instrument as financial guarantee: Payment to be made to holder only if: If above both conditions are not satisfied, the instrument is not a financial guarantee. Practical illustration: Let’s understand the accounting of financial
Revision in Criteria for classifying Non- Corporate entities for applicability of Accounting Standards
For the purpose of applicability of Accounting Standards (“AS”), The Institute of Chartered Accountants of India (“ICAI”) has classified the entities into two segments – company entities and non-company entities. Non-company entities such as sole proprietors, partnership firms, trusts, Hindu Undivided Families, association of persons and co-operative societies are further classified into various levels. Currently, the ICAI has categorized non-company entities into 3 levels. With increasing number of non-company entities, the ICAI has, now, further classified them into 4 levels.
Key highlights on the amendments proposed in Ind AS 16; Ind AS 37; and Ind AS 103
Based on the International Financial Reporting Standards and the Ministry of Corporate Affairs (MCA) has notified Indian Accounting Standards (Ind -AS) which are applicable on certain entities on mandatory basis. As a part of review process and in public interest, the International Accounting Standard Board (IASB) keeps on issuing certain amendments to these standards on timely basis in order to improve its effective implementation. The Ind- ASs are basically harmonized with the principles stated in IFRSs and to keep them
Impairment testing during uncertain COVID 19 times
Several entities have been impacted by the COVID-19 pandemic. As per accounting prospective both Ind AS 36, ‘Impairment of assets’ and AS 28 ‘Impairment of Assets’, require that management consider at each report date whether there is any indication that an asset may be impaired. Ind AS 36 and AS 28 include both internal and external indicators to identify if an impairment review is required. Revision in management business plan to incorporate the impacts of COVID-19 Under Ind AS 36
Audit Quality Review Report & AS queries
NFRA issues Audit Quality Review Report of the Statutory Audit of IL&FS for F.Y. 2017-18 In pursuant to section 132(2)(b) of the Companies Act, 2013 and NFRA Rules, 2018, The National Financial Reporting Authority (NFRA) has issued the Audit Quality Review Report (AQRR) of the Statutory Audit of IL&FS Financial Services Ltd. for the financial year 2017-18. This AQR was conducted to ensure the compliance with relevant accounting and auditing standards and to assess the need of any disciplinary proceedings
Amendments to Indian Accounting Standards (Ind AS) issued in July 2020
Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2020 dated 24 July 2020. The rules are effective from the date of publication in the Official Gazette of India i.e. 24 July 2020. All amendments are effective for periods beginning 1 April 2020 or later. However, amendments relating to Ind AS 116, Leases, can be applied for financial year beginning 1 April 2019 or later if the financial statements for that period have not yet
Application of paragraph 21 of AS 22
Fact of Case: A company is a public limited company listed with recognised stock exchanges, engaged in manufacturing business. The company follows calendar year. In Union Budget for the financial year 2015-16 presented on 28th February 2015, the Government has revised the surcharge on income tax from 5% to 10%, resulting in increase of effective ‘Corporate Tax’ rate from 33.99% to 34.61%. Whether Rates announced by finance bill is enacted or substantively enacted Para 21 of AS 22:- “deferred tax