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: Indian Accounting Standards
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
Ind AS 7: Presentation of late payment interest fees as cash flow from investing activity
SEBI revises formats for filing of Financial Information The SEBI has decided to revise the formats for reporting of financial information and limited review report. The new format shall contain the items mentioned in the Statement of Profit and Loss (excluding notes and detailed sub classification) as prescribed in Schedule III of the Companies Act, 2013 and the extent and nature of security created and maintained in case of secured non-convertible debt securities, details of which are required as per
Common Errors in Ind AS Financial Statements: FRRB Observations related to Presentation of Property, Plant & Equipment
In the Month of February 2021, the FRRB issued Study on Compliance of Financial Reporting Requirements (Ind AS Framework) that contains instances of common non-compliances or errors in Ind AS financial statements. In this article below is FRRB observations relating to presentation and disclosure of property, plant & equipment (PPE) in Ind AS financial statements. Disclosure/ Scenario in the Financial Statements selected by the FRRB Relevant Schedule III/ Ind AS requirement FRRB Observation 1. Subsequent expenditure related to PPE:In one of the
Ind AS 32: Accounting for offsetting of financial assets and financial liabilities
Facts A Company is engaged in the manufacturing of Defense Sector. Some of products manufactured by Company are on Special Order. The querist has stated that as the some products are made only against specific orders, the company receives advances from various customers on agreed percentages of sale value of an order for supply of goods and services. While raising the sale invoice on supply of ordered goods or services, advances to the extent of proportionate value of invoice
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
New Labour Code: Potential Accounting Implications
Government of India is actively working on reforms of various old laws out of which one is new Labour Code which was cleared by both the houses of parliament in July 2019 and received Presidents assent l on 8th August 2019 and called “The code of Wages 2019” However, many provisions of the Code of Wages 2019 are still not implemented and are yet to be made effective.` The major challenge in bringing about any labour reforms is to facilitate
Accounting treatment of waiver off of interest on the loan from Directors
Accounting treatment of waiver off of interest on the loan from Directors Entity A, which prepares its financial statements as per Ind AS obtained a loan from one of its directors during the year 2015-16 which is still outstanding as at the end of year 2018-19. The loan is not related to a qualifying asset and is repayable on demand. In previous years, the interest was charged and paid to the directors. However, in respect of interest on the loan
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