accounting standard

Deferred tax Considered under MAT as per 115JB?

CA, CS, CMA - The treatment of deferred tax charge in determining the tax liability under the special provisions of Section 115JB of the Income-Tax Act is one such case. Section 115JB levies minimum alternate tax (MAT) at 10% of book profits (plus surcharge and cess thereon) if such tax is higher than the tax payable under the normal provisions of the ...

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Analysis of Companies (Indian AS) Amendment Rules, 2020

CA, CS, CMA - Companies (Indian Accounting Standards) Amendment Rules, 2020* The COVID 19 has not only affected health of people across the globe, but it also caused severe disturbance in global economic environment which consequentially created an impact on financial statements and reporting. Keeping in view all these drastic changes MCA on July 24, 2...

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Events after Reporting period (Latest & Simplified version)

CA, CS, CMA - There may be a time gap between the balance sheet date (reporting date) and the date on which the financial statements are approved. During this gap of time, some events shall take place. Such events are called events after reporting period. For Example, a company prepares its balance sheet on 31/3/2021, but it is approved […]...

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Forward Contract – Practical Accounting & Taxability of Revenue Account transaction (Actual Hedge)

CA, CS, CMA - Let me start with the example: The Company has sales of $5,00,000/- on 1st April 2020. Spot Rate was Rs. 70/ $ To hedge the exchange rate fluctuation the Company has sold 2 Year forward contract of $4,00,000/-  @ Rs. 72/ $. Date Spot Rate (Rs./ $) Forward Rate (Rs./ $) 31st March 2021 73 […]...

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Segment Reporting (Latest and Simplified version)

CA, CS, CMA - 1. Following are the important Accounting Standards related with Segment Reporting 1. IFRS 8 2. INDAS 108 3. AS -17 2. Withdrawal of IAS 14 This IFRS supersedes IAS 14 Segment Reporting. 3. Differences between INDAS 108 and IFRS 8 INDAS 108 IFRS 8 1.Transitional provisions have not been given 1.Transitional provisions have been given [&he...

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Guidance Note on Accounting for Share-based Payments

CA, CS, CMA - Recognising the need for establishing uniform accounting principles and practices for all types of share-based payments for the companies following Accounting Standards under Companies (Accounting Standards) Rules, 2006, as amended under Section 133 of Companies Act, 2013, it is heartening to note that the Research Committee of the Instit...

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Guidance Note on AS 25 & Measurement of Income Tax Expense for Interim Financial Reporting

CA, CS, CMA - ‘Guidance Note on Applicability of AS 25 to Interim Financial Results’ which was issued in the year 2008 and ‘Guidance Note on Measurement of Income Tax Expense for Interim Financial Reporting in the context of AS 25’ which was issued in the year 2006 to issue as ‘Guidance Note on Applicability of AS 25 and Measurement of Income...

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Exposure Draft of Revised AS 21, Effects of Changes in Foreign Exchange Rates

CA, CS, CMA - Exposure Draft of revised AS 21, The Effects of Changes in Foreign Exchange Rates, has been issued by the ASB for comments with the last date being December 3, 2020...

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Educational Material on Ind AS 38, Intangible Assets

CA, CS, CMA - Ind AS 38 prescribes the accounting treatment for intangible assets that are not dealt with specifically in another Ind AS. It sets out the criteria for recognising and measuring intangible assets and requires disclosures about them....

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Indian Accounting Standard (Ind AS) 114

CA, CS, CMA - Indian Accounting Standard (Ind AS) 114 Regulatory Deferral Accounts# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Standard is to specify the financial reporting requirements for reg...

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Change in Inventory Valuation Method Allowed if Based on AS 2

ACIT  Vs Thiagarajar Mills Ltd. (ITAT Chennai) - The issue under consideration is whether the change in method of valuation of inventory is allowed if it is based on AS 2 as prescribed by ICAI?...

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Non-issue of bills does not stop accrual of income under mercantile system of accounting

M/s. Optum Health & Technology (India) Pvt. Ltd. Vs ITO (ITAT Bangalore) - The fact that bills were not raised did not stop accrual of income under the mercantile system of accounting. Therefore, the claim of assessee which was purely based on AS-9 was not sustainable and the revenue was justified in making the impugned addition....

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HC explains Accrual of liability under mercantile system of accounting

CIT Vs The KCP Limited (Andhra Pradesh High Court) - CIT Vs The KCP Limited (Andhra Pradesh High Court) In this case High Court explains Entire law on accrual of liability under mercantile system of accounting explained read with Accounting Standard 4 (AS-4) (contingencies and events occurring after the balance sheet date) issued by the ICAI and Secti...

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ITAT explains taxation of real estate construction contracts (AS-7 & AS-9)

Ashoka Hi-Tech Builders P.Ltd Vs Dy. Commissioner of Income Tax (ITAT Indore) - Ashoka Hi-Tech Builders Pvt. Ltd Vs DCIT (ITAT Indore) In this Case ITAT Indore explains Entire law on taxation of real estate construction contracts  in the context of ‘completed contract’ vs. ‘percentage completion’ with reference to Accounting Standards AS-7 and AS-9 and ...

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Loss should be recognized immediately if contract cost is likely to exceed revenue

ITO Vs. Shri Vivek Ramrao Parashkar (ITAT Mumbai) - As per AS-7 when the cost of contract is likely to be exceed the contract revenue then the loss incurred on the contract should be recognized as revenue expenditure immediately....

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Companies (Indian Accounting Standards) Second Amendment Rules, 2019

Notification No. G.S.R (E) - (30/03/2019) - These rules may be called the Companies (Indian Accounting Standards) Second Amendment Rules, 2019. They shall come into force on 1st day of April, 2019....

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Companies (Indian Accounting Standards) Amendment Rules, 2019

Notification No. [G.S.R. 273(E)] - (30/03/2019) - GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 30th March, 2019 G.S.R. 273(E).— In exercise of the powers conferred by section 133 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government, in consultation with the National Financial Repo...

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Companies (Accounting Standards) Amendment Rules, 2018

Notification No. F.No. 17/15 1/2013-CL-V - (18/06/2018) - Amendment in Accounting Standard (AS) 11- An enterprise may dispose of its interest in a non-integral foreign operation through sale, liquidation, repayment of share capital, or abandonment of all, or part of, that operation. The payment of a dividend forms part of a disposal only when it constitute...

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RBI defers implementation of Ind AS for banks by one year

Press Release : 2017-2018/2642 - (05/04/2018) - Scheduled Commercial Banks (SCBs), excluding Regional Rural Banks (RRBs), were required to implement Indian Accounting Standards (Ind AS) from April 1, 2018 vide our Circular dated February 11, 2016....

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MCA removes applicability of AS 22 & Ind AS 12 to Govt Companies forever

S.O. 1965(E). - (02/04/2018) - Vide Notification number S.O. 529(E), dated the 5th February, 2018 it was specified that provisions of Accounting Standard 22 or Indian Accounting Standard 12 relating to deferred tax asset or deferred tax liability shall not apply, for seven years to certain Government companies with effect from th...

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Recent Posts in "accounting standard"

Guidance Note on Accounting for Share-based Payments

Recognising the need for establishing uniform accounting principles and practices for all types of share-based payments for the companies following Accounting Standards under Companies (Accounting Standards) Rules, 2006, as amended under Section 133 of Companies Act, 2013, it is heartening to note that the Research Committee of the Instit...

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Posted Under: CA, CS, CMA |

Guidance Note on AS 25 & Measurement of Income Tax Expense for Interim Financial Reporting

‘Guidance Note on Applicability of AS 25 to Interim Financial Results’ which was issued in the year 2008 and ‘Guidance Note on Measurement of Income Tax Expense for Interim Financial Reporting in the context of AS 25’ which was issued in the year 2006 to issue as ‘Guidance Note on Applicability of AS 25 and Measurement of Income...

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Posted Under: CA, CS, CMA |

Exposure Draft of Revised AS 21, Effects of Changes in Foreign Exchange Rates

Exposure Draft of revised AS 21, The Effects of Changes in Foreign Exchange Rates, has been issued by the ASB for comments with the last date being December 3, 2020...

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Posted Under: CA, CS, CMA |

Deferred tax Considered under MAT as per 115JB?

The treatment of deferred tax charge in determining the tax liability under the special provisions of Section 115JB of the Income-Tax Act is one such case. Section 115JB levies minimum alternate tax (MAT) at 10% of book profits (plus surcharge and cess thereon) if such tax is higher than the tax payable under the normal provisions of the ...

Read More
Posted Under: CA, CS, CMA |

Analysis of Companies (Indian AS) Amendment Rules, 2020

Companies (Indian Accounting Standards) Amendment Rules, 2020* The COVID 19 has not only affected health of people across the globe, but it also caused severe disturbance in global economic environment which consequentially created an impact on financial statements and reporting. Keeping in view all these drastic changes MCA on July 24, 2...

Read More
Posted Under: CA, CS, CMA |

Change in Inventory Valuation Method Allowed if Based on AS 2

ACIT  Vs Thiagarajar Mills Ltd. (ITAT Chennai)

The issue under consideration is whether the change in method of valuation of inventory is allowed if it is based on AS 2 as prescribed by ICAI?...

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Events after Reporting period (Latest & Simplified version)

There may be a time gap between the balance sheet date (reporting date) and the date on which the financial statements are approved. During this gap of time, some events shall take place. Such events are called events after reporting period. For Example, a company prepares its balance sheet on 31/3/2021, but it is approved […]...

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Posted Under: CA, CS, CMA |

Forward Contract – Practical Accounting & Taxability of Revenue Account transaction (Actual Hedge)

Let me start with the example: The Company has sales of $5,00,000/- on 1st April 2020. Spot Rate was Rs. 70/ $ To hedge the exchange rate fluctuation the Company has sold 2 Year forward contract of $4,00,000/-  @ Rs. 72/ $. Date Spot Rate (Rs./ $) Forward Rate (Rs./ $) 31st March 2021 73 […]...

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Posted Under: CA, CS, CMA |

Segment Reporting (Latest and Simplified version)

1. Following are the important Accounting Standards related with Segment Reporting 1. IFRS 8 2. INDAS 108 3. AS -17 2. Withdrawal of IAS 14 This IFRS supersedes IAS 14 Segment Reporting. 3. Differences between INDAS 108 and IFRS 8 INDAS 108 IFRS 8 1.Transitional provisions have not been given 1.Transitional provisions have been given [&he...

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Posted Under: CA, CS, CMA |

Covid-19 impact on Accounting Standards Compliant Financial Statements

COVID-19 pandemic has disrupted the entire world whether its humans’ health or their financial health. Financial statements have to bear the direct impact of this unprecedented pandemic. But how will this be shown and disclosed? This is being answered by the prestigious Institute of Chartered Accountants of India (ICAI) in its Advisory ...

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Posted Under: CA, CS, CMA |

Finance Lease – Understanding income tax perspective

Finance Lease As per Accounting Standard 19 (Leases): Definitions ♣ A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time. ♣ A finance lease is a lease that transfers substantially all the […]...

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Posted Under: CA, CS, CMA |

‘Meaning of Business’- Amendments in Ind AS 103 Decoded

Recently the MCA issued notification dated 24/07/2020 wherein a number of amendments are introduced in IndAS 103, 107, 109, 116, 7, 8, 10, 34 and 37. We will be here discussing the amendments brought in IndAS 103. It is worthy to  note that the changes are in line with changes introduced by IASB in IFRS […]...

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Posted Under: CA, CS, CMA |

Depreciation treatment under Companies Act, Income Tax Act, GAAP, Ind As & AS

Depreciation is a common accounting concept which the accountant comes across in their regular course of employment or in regular course of their business. This article will explore the treatment of depreciation under Companies Act, Income Tax Act and in Indian and internationally accepted Accounting Standard. DEFINITION AND TREATMENT OF ...

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Posted Under: CA, CS, CMA |

Educational Material on Ind AS 38, Intangible Assets

Ind AS 38 prescribes the accounting treatment for intangible assets that are not dealt with specifically in another Ind AS. It sets out the criteria for recognising and measuring intangible assets and requires disclosures about them....

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Posted Under: CA, CS, CMA |

Indian Accounting Standard 116 – ‘Leases’

Brief overview The Ministry of Corporate Affairs (MCA) notified Ind AS 116 – ‘Leases’ on March 30, 2019 to come into force on April 01, 2019. Ind AS 116 replaces the current guidance on lease accounting in Ind AS 17. What is a Lease? A lessee may elect not to apply Ind AS 116 for […]...

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Posted Under: CA, CS, CMA |

Implementation/Roadmap of Indian Accounting Standards (IND AS)

A. Implementation of Indian Accounting Standards (IND AS): 1. For Companies other than banks, NBFCs and Insurance Companies: a) All companies which are listed/or in process of listing inside or outside India on Stock Exchanges (other than companies listed on SME Exchanges) b) Unlisted companies having net worth* of ₹ 250 crore or more c...

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Posted Under: CA, CS, CMA |

Implication of Indian Accounting Standards (Ind AS) on Banks & Financial Sector

Applicability of Ind AS on Banks & Financial Institutions The Ministry of Corporate Affairs (MCA), in January, 2016, had notified the roadmap for implementation of Indian Accounting Standards converged with International Financial Reporting Standards (IFRS) for Scheduled commercial banks (excluding RRBs), insurers/insurance companies ...

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Posted Under: CA, CS, CMA |

Accounting for leases

Leases is one of the important accounting standard on which detailed improvements /modifications has been made in recent times. Therefore, this article is an attempt to demystify the relevant accounting standard on Leases. My attempt is to present the relevant standards in simple language. Following are the relevant standards relating wit...

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Posted Under: CA, CS, CMA |

Actuarial Valuation for Accounting of Gratuity Benefits – Ind AS19 & AS-15

Why of Actuarial Valuation is required for Accounting of Gratuity Benefits in compliance of IndAS19 & AS 15 (Revised 2005) by Indian Public, Private and Multinational Companies ? Background Indian Public Sector, Private Sector and Multinational Companies needs to prepare the Financial Statement such as Balance Sheet & Profit/L...

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Posted Under: CA, CS, CMA |

Deductibility of Foreign Exchange Fluctuations in case of Capital Assets

Article deals with treatment of foreign exchange (forex) fluctuations on computation of total income in case of capital assets acquired by using funds borrowed from outside India in the form of ECB, Loans and payment to suppliers (borrowed funds). ...

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Posted Under: CA, CS, CMA |

Deferred Tax implications – Related to Ind AS-116

Background, Ind AS-116 Leases brings significant changes in accounting requirements for lease accounting, mainly for lessees. The new standard replaces the existing standard i.e. Ind AS-17, Leases with effect from accounting periods beginning on or after 1 April 2019. The new standard requires lessees to recognise “Right-of-use assets...

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Posted Under: CA, CS, CMA |

Actuarial Valuation Services for Accounting of Defined Benefit Plans

Why Actuarial Valuation Services are needed by Indian and Multinational Companies for Accounting of Defined Benefit Plans (i.e. Gratuity, Leave Encashment, Long Service Award Plan, etc.) in compliance of AS 15 (Revised 2005) & Ind AS 19? I hope the below email may help you in understanding the requirement of Actuarial Valuation Servic...

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Posted Under: CA, CS, CMA |

Ind AS 8 Accounting Policies, Changes in Accounting Estimates & Errors

Ind AS 8 – Accounting Policies, Changes in Accounting Estimates, and Errors 1. Accounting policies are the specific principles and procedures implemented by a company’s management team that are used to prepare its financial statements. These include any accounting methods, measurement systems, and procedures for presenting disclo...

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Posted Under: CA, CS, CMA |

AS-22 Accounting for Taxes on income – Deferred tax Assets/Liabilities

Permanent differences as the name suggests are permanent in nature which means it cannot be subsequently reversed in future period. An expense accrued or provision made in the statement of profit and loss of current year but not allowed for tax purposes in current as well as future period. It does not result in deferred tax assets or defe...

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Posted Under: CA, CS, CMA |

Treatment of Covid-19 Losses | Extraordinary or Exceptional | Ind AS 1 & AS 5 Paradox 

Business is passing through an unprecedented time and incurring huge direct and indirect costs due to Covid 19 pandemic. Lockdown protocols have led to severe supply chain disruptions and labour shortages, hurting both the top and the bottom lines of almost all companies. Writing offs inventory with low shelf life or high storage costs or...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 114

Indian Accounting Standard (Ind AS) 114 Regulatory Deferral Accounts# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Standard is to specify the financial reporting requirements for reg...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 111

Indian Accounting Standard (Ind AS) 111 Joint Arrangements# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Indian Accounting Standard (Ind AS) is to establish principles for financial ...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 110

Indian Accounting Standard (Ind AS) 110 Consolidated Financial Statements# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Indian Accounting Standard (Ind AS) is to establish principles...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 106

Indian Accounting Standard (Ind AS) 106 Exploration for and Evaluation of Mineral Resources# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Indian Accounting Standard (Ind AS) is to sp...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 105

Indian Accounting Standard (Ind AS) 105 Non-current Assets Held for Sale and Discontinued Operations# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Indian Accounting Standard (Ind AS)...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 101

Indian Accounting Standard (Ind AS) 101 First-time Adoption of Indian Accounting Standards# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Ind AS is to ensure that an entity’s fi...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 33

Indian Accounting Standard (Ind AS) 33 Earnings per Share# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1. The objective of this Standard is to prescribe principles for the determination and presentation of...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 32

Indian Accounting Standard (Ind AS) 32 shall be applied to those contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contracts were financial instruments, with the exception of contracts that were entered into and continue to be he...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 29

Indian Accounting Standard (Ind AS) 29 Financial Reporting in Hyperinflationary Economies# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Scope 1. This Standard shall be applied to the financial statements, including t...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 23

Indian Accounting Standard (Ind AS) 23 Borrowing Costs# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Core principle 1 Borrowing costs that are directly attributable to the acquisition, construction or production of a...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 21

Indian Accounting Standard (Ind AS) 21 The Effects of Changes in Foreign Exchange Rates# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 An entity may carry on foreign activities in two ways. It may have tra...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 20

Indian Accounting Standard (Ind AS) 20 Accounting for Government Grants and Disclosure of Government Assistance# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Scope 1 This Standard shall be applied in accounting for, ...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard (Ind AS) 17

Indian Accounting Standard (Ind AS) 17 Lease# (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Standard is to prescribe, for lessees and lessors, the appropriate accounting policies and ...

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Posted Under: CA, CS, CMA |

SAE 3400 Examination of Prospective Financial Information- Analysis

This SAE is effective in relation to reports on projections/forecasts issued on or after April 1, 2007. 1. Introduction The purpose of this (SAE) is to establish standards and provide guidance on engagements to examine and report on prospective financial information (PFI) including examination procedures for best-estimate and hypothetical...

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Posted Under: CA, CS, CMA |

IAS 36 – Impairment of Assets – Analysis

Impairment is determined by comparing CARRYING VALUE of the asset with it’s RECOVERABLE AMOUNT. It will be higher of Fair Value less Cost of Disposal and its Value in Use. Impairment rules apply to both Tangible and Intangible Assets. Scope and Applicability: It applies to all tangible, intangible and financial assets except- Inventorie...

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Posted Under: CA, CS, CMA |

Key Consideration for Assessing Going Concern Assumption

Assessment of Going Concern is one of the key areas which require the attention of Auditors and Management for the audit of financial statements for the year ended 31st March 2020. However, it is the general assumption of people that assessment of going concern is only the responsibility of auditors and not that of management. […]...

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Posted Under: CA, CS, CMA |

IAS 16 Property, Plant and Equipment (PPE)

IAS 16 Property, Plant and Equipment (PPE) covers the aspects of accounting for property, plant and equipment and represents the list of items falls into Tangible Non-Current Assets....

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Posted Under: CA, CS, CMA |

Going Concern- Key Considerations for Auditors Amid COVID-19

Timely and effective communication between the management and the auditor is essential in ensuring that both are able to fulfil their respective responsibilities in relation to going concern aspect during these uncertain times....

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Posted Under: CA, CS, CMA |

SA 240 Auditor’s responsibility in fraudulent Financial Statements: Analysis

tandard on Auditing, (SA) 240, one of the most authoritative text deals with the auditor’s responsibilities relating to fraud in an audit of financial statements. With the flood of opportunities to open up for auditors to audit financial statements for the period ending 31st March 2020...

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Posted Under: CA, CS, CMA |

Analysing Cash Flow Statement in Depth

With passage of time for many of us Cash Flows Statement has become just a component of Financial Statements that need to be prepared or verified. However in the recent times, with advent of COVID-19 pandemic around the globe Cash Flows Statement along with other components of financial statement is becoming extremely important for prospe...

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Posted Under: CA, CS, CMA |

How Auditors check compliance of IndAS 19 & AS 15 Revised 2005

As per provisions of Section 129 of the Companies Act 2013, each company has to prepare the Financial Statement such as Balance Sheet & Profit/Loss Accounts at the closure of each financial year in compliance of Accounting Standards as stipulated in Section 133 of the Companies Act 2013, so that they can give a true and fair view ...

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Posted Under: CA, CS, CMA |

AS-1, Ind AS-1 along with impact of COVID-19

Accounting Standard –1 (Disclosure of Accounting Policies) and Indian Accounting Standard -1 (Presentation of Financial Statements) Along with Impact of COVID-19 Over the same. Accounting Standard –1 (Disclosure of Accounting Policies) 1. Purpose: Purpose of this standard is to promote better understanding of financial statements by e...

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Posted Under: CA, CS, CMA |

Consolidated Financial Statement- Section 129 and Accounting Standard 21

In this write-up, I am going to discuss the preparation and presentation of the Consolidated Financial Statement. The Companies Act, 2013 in its Section 129 along with Rule 6 of the Companies (Accounts) Rules, 2014, and Accounting Standard 21 govern the provision related to the consolidation of the financial statement. Now the question ar...

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Posted Under: CA, CS, CMA |

Accounting for Decommissioning Provision under Ind AS

In most cases when a company acquires certain types of long-term assets, it has an obligation to remove these assets after the end of their useful lives and restore the site. Most of these long term assets are constructed on leased land or premises, thus obligating the user to return it in the original condition at the end of the agreed t...

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Posted Under: CA, CS, CMA |

COVID-19 Impact on Financial Reporting under IND AS

Brief of IND AS Areas to be considered (A questionnaire for management) Due to Covid-19 while preparing Financial Statement for FY 2019-20 Areas Covered: 1. Inventory Measurement 2. Impairment of Non-Financial Assets 3. Provisions, Contingent Liabilities and Contingent Assets 4. Going Concern Assessment 5. Property, Plant and Equipment 6....

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Posted Under: CA, CS, CMA |

Fair Value Concepts | Ind AS 113 – Fair Value Measurement

With the introduction and the subsequent adoption of Ind AS by many Indian companies, the emphasis on valuation has increased. The basis of value is closely related to the purpose of a given valuation exercise and can often vary. Selecting an appropriate basis of value is critical. For example, Fair Value is generally used for […]...

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Posted Under: CA, CS, CMA |

Accounting requirement for Employee Benefit Plans- AS 15 & IndAS 19

Key Differences and Accounting requirement for Employee Benefit Plans in compliance of AS 15 (Revised 2005) and IndAS 19 by Companies at the end of each Financial Year. This post is an attempt to make awareness about Key Differences & Accounting Requirement for Employee Benefit Plans (i.e Gratuity, Leave Encashment, Pension & Post...

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Posted Under: CA, CS, CMA |

Guidance Notes on ICSI Auditing Standards (CSAS-1 to CSAS-3)

ICSI Auditing Standards aims to support the Company Secretaries in developing auditing acumen, techniques and tools and inculcate best auditing practices while conducting the audit and promote standardisation and uniformity in the professional arena. The Institute of Company Secretaries of India has issued the first four Auditing Standard...

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Posted Under: CA, CS, CMA |

Ind AS 33: Impact of Rights Issue on calculation of Earnings Per Share

Earnings per share (‘EPS’), as the name suggests comprises of two factors: 1. The net profit or loss for the year/period attributable to the ordinary shareholders, and 2. The weighted average number of ordinary shares outstanding during the year/period. While the first component of EPS is easy to determine, the second may pose various...

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Posted Under: CA, CS, CMA |

Non-issue of bills does not stop accrual of income under mercantile system of accounting

M/s. Optum Health & Technology (India) Pvt. Ltd. Vs ITO (ITAT Bangalore)

The fact that bills were not raised did not stop accrual of income under the mercantile system of accounting. Therefore, the claim of assessee which was purely based on AS-9 was not sustainable and the revenue was justified in making the impugned addition....

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Exposure Draft- General Presentation and Disclosures

Introduction In this ED, the IASB has proposed improvements to the way information is communicated in the financial statements, with a focus on financial performance. The IASB is also proposing limited changes to the statement of cash flows and the statement of financial position. The ED requires companies to: Present 3 new defined subtot...

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Posted Under: CA, CS, CMA |

Uncertainty over Income tax treatment (IFRIC 23 and Appendix C of Ind AS 12)

Globally On 7 June 2017, the International Accounting Standards Board (IASB or the Board) issued IFRIC Interpretation 23 — Uncertainty over Income Tax Treatments (the Interpretation). The Interpretation clarifies application of recognition and measurement requirements in IAS 12 Income Taxes when there is uncertainty over income tax trea...

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Posted Under: CA, CS, CMA |

Requirement of Actuarial Valuation Reports in compliance for IAS 19

Requirement of Actuarial Valuation Reports in compliance for International Accounting Standard 19 – IAS 19 This article is an attempt to describe about requirement of Actuarial Valuations for compliance of International Accounting Standard 19 – IAS 19 by Indian MNC’s & Companies Operating Middle East and North Africa...

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Posted Under: CA, CS, CMA |

Treatment of Exchange Fluctuation under Income Tax Laws

When any entity enters into any transaction in foreign currency, it is exposed to exchange fluctuation risk on such transaction unless the same is hedged by the entity through hedging techniques like Forward Contracts, Currency Invoicing etc. ...

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Posted Under: CA, CS, CMA |

Draft of Accounting Standards for Local Bodies (ASLBs) 4, ‘Effects of Changes in Foreign Exchange Rates’

While formulating the ASLBs, due consideration is given  to the International Public Sector Accounting Standards (IPSASs) issued by the International Public Sector Accounting Standards Board (IPSASB) of IFAC for  integrating the same to the extent possible, in the light of the conditions and practices prevailing in India. The Committee ...

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Posted Under: CA, CS, CMA |

Treatment of Lease Equalisation Reserve created as per Ind AS 17 on transition to Ind AS 116

Ind AS 116- Leases, is effective from annual period beginning on or after 1 April 2019. Ind AS 116 Supersedes Ind AS 17 – Leases from the date of its applicability. Under Ind AS 17, lease rentals under an operating lease were recognised as an expense/income on a straight line basis over the lease term […]...

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Posted Under: CA, CS, CMA |

Sale and Leaseback Accounting under Ind AS 116 ‘Leases’

A sale and leaseback transaction is one where an entity (the seller-lessee) transfers an asset to another entity (the buyer-lessor) for consideration and leases that asset back from the buyer-lessor. Ind AS 116 makes significant changes to sale and leaseback accounting....

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Posted Under: CA, CS, CMA |

Exposure Drafts of Guidance Note on ICSI Auditing Standards

THE INSTITUTE OF Company Secretaries of India IN PURSUIT OF PROFESSIONAL EXCELLENCE Statutory body under an Act of Parliament (Under the jurisdiction of Ministry of Corporate Affairs) EXPOSURE DRAFTS OF GUIDANCE NOTE ON ICSI AUDITING STANDARDS FOR PUBLIC COMMENTS (Last date for submission of comments: 5th December, 2019) The Institute of ...

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Posted Under: CA, CS, CMA |

Quick Referencer on Indian Accounting Standards

The need for converging to international financial reporting practices in India is now being realised with the adoption of Indian Accounting Standards by Indian companies that are converged International Financial Reporting Standards. With incorporating the aspects of international financial reporting framework and accounting practices, t...

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Posted Under: CA, CS, CMA |

Accounting of Compensatory Absences (Leave Encashment Obligations)

This note is an attempt in the matter of accounting provisions to be made in financial reporting of enterprises for Compensatory Absences (Leave Encashment Obligations) in compliance of Accounting Standard AS -15 (Revised 2005) issued by Accounting Standard Board of the Institute of Chartered Accountant of India....

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Posted Under: CA, CS, CMA |

Identifying a lease under Ind AS 116: Leases

The assessment of whether a contract is or contains a lease is the biggest practical issue while applying Ind AS 116. This assessment is required right at the inception of the contract. In most of the cases, the assessment is likely to be straightforward and contracts which are classified as lease contracts under Ind AS 17 are likely to c...

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Posted Under: CA, CS, CMA |

Disclosure requirement in compliance of AS 15 (Revised 2005) for SME and Non SME Companies

Disclosure requirement in compliance of AS 15 (Revised 2005) for SME and Non SME Companies in India In Indian context, Companies needs to comply with Accounting Standards notified under Section 133 of Companies Act 2013 to prepare the financial statements at the end each Financial Year. Ensuring the proper compliance and provisions of the...

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Posted Under: CA, CS, CMA |

Treatment of Share Based Payments as per AS, IND AS and IFRS

TREATMENT OF SHARE BASED PAYMENTS WHILE PREPARING FINANCIAL STATEMENTS AS PER AS, IND AS AND IFRS (LATEST AND SIMPLIFIED) The relevant Accounting Standards relating to Share Based Payments are the following:- a. INDAS 102 b. IFRS 2 c. Guidance Note issued by ICAI There is no major difference between INDAS 102 and IFRS 2.Therefore, the [&h...

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Posted Under: CA, CS, CMA |

Accounting By Schools For Gratuity Benefit

1. Gratuity Benefit is payable by Schools to its employees. Furthermore, with amendment of ‘Payment of Gratuity Act’ in 2009, Gratuity is payable to teachers also. The amended act can be accessed from the gazette vide Notification S.O. 1080 by Ministry of Labour and Employment. 2. How Schools should do their accounting is explained by...

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Posted Under: CA, CS, CMA |

Classification of Financial Assets

An entity shall classify financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit & loss on the basis of both: (a) The entity’s business model* for managing the financial assets and (b) The contractual cash flow** characteristics of the financial asset. ...

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Posted Under: CA, CS, CMA |

Employee Benefits as per AS, IND AS and IFRS

The relevant Accounting Standards relating to Employee Benefits are the following:- a. INDAS 19 b. IAS 19 c. AS 15 There is no major difference between INDAS 19 and IAS 19.Therefore, the following descriptions relate to both INDAS 19 and IAS 19. Statements of Profit and loss and other Comprehensive income, Statement of changes in [&hellip...

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Posted Under: CA, CS, CMA |

Contingent Liabilities & Assets while Preparing Financial Statements as Per AS, IND AS and IFRS

TREATMENT OF PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS WHILE PREPARING FINANCIAL STATEMENTS AS PER AS, IND AS AND IFRS (LATEST) Assistant Professor of Commerce. The relevant Accounting Standards relating to PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS are the following:- a. INDAS 37 b. IAS 37 c. AS 29 There is n...

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Posted Under: CA, CS, CMA |

Ind AS 116 – Leases- Brief Analysis

This article aims at covering most of the concepts of recently issued Ind AS 116 by the ICAI and MCA which will supersede the earlier issued standard Ind AS 17 on leases w.e.f. 01st April 2019 1. Introduction Ind-AS 116 Leases brings significant changes in accounting requirements for lease accounting, primarily for lessees. Ind-AS 116 [&h...

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Posted Under: CA, CS, CMA |

Ind AS Technical Facilitation Group Clarification Bulletin 22

Ind AS 116, Leases, is applicable for annual reporting periods beginning on or after April 1, 2019. Entity X has applied Ind AS 116 using modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings as on April 1, 2019....

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Posted Under: CA, CS, CMA |

Employee Benefits Ind AS -19- Brief Analysis

In Ind AS 19/IAS 19 Generally 4 types of Benefits have been discussed which can be payable to employees. 1. Short Term Employee Benefits – Payable within 12 Months 2. Post-Employment Benefits – Payable only after completion of Employment 3. Other Long Term employee Benefits – Long term Paid Leave, Disability Benefits 4. Terminat...

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Posted Under: CA, CS, CMA |

Ind AS Technical Facilitation Group Clarification Bulletin 21

In year 2005, PQR Limited entered into a lease agreement to take on lease an office building from ABC Limited for a period of one year. Since 2005, the contract has been renewed every year for a further period of one year at a time. As per the past practice, it is likely that the contract will be renewed for another one year at the expiry...

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Posted Under: CA, CS, CMA |

FAQs on Treatment of Dividend Distribution Tax

What is the presentation requirement as per Ind AS in India for dividend and dividend distribution tax thereon?...

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Posted Under: CA, CS, CMA |

Forensic Auditing: Much required tool in current era of Frauds

The article briefly explains the concept of Forensic Auditing and the use of the technique in the detection of the frauds. The relevance of the concept has been highlighted -especially in the emerging scenario of continuous development in the fields of accounting and auditing. The article also touches upon the various  inter-related conc...

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Posted Under: CA, CS, CMA |

How to Account for Intangible Assets under IND-AS 38?

Learning Outcomes > Understand meaning and scope of intangible assets. > Recognise the criteria. > Examine mode of acquisition. > Measure intangible assets at initial recognition. > Measure intangible assets after recognition. > Evaluate amortization and useful life of intangible asset. > De-recognition and comply wit...

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Posted Under: CA, CS, CMA |

Ind AS -116 Leases

Overview of Ind AS-116 ♠ The Ministry of Corporate Affairs (MCA) notified Ind AS 116, the new leases accounting standard on 30th March 2019 with the effective date of its application from 1st April 2019. Ind AS -116 replaces the current guidance in Ind AS-17, ‘Leases’. ♠ Ind AS 116 defines a lease as a […]...

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Posted Under: CA, CS, CMA |

Simple Version of IND-AS-16 & IAS 16-Property, Plant & Equipment

A SIMPLE VERSION OF INDAS-16 AND IAS 16 -PROPERTY,PLANT AND EQUIPMENT The relevant Accounting Standards relating to Property, Plant and Equipment are the following:- 1. AS-6, AS-10 2. INDAS-16 3. IAS-16 There is no major difference between INDAS-16 AND IAS-16.So the following details relate to both INDAS-16 and IAS-16. Property, Plant and...

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Posted Under: CA, CS, CMA |

Analysis on accounting of interest free demand loans received under Ind AS / IFRS

Accounting of Interest free demand loan given by One Company to Other Company which may or may not be related party- Entity generally advances various demand loans / Inter Corporate Deposits (ICDs) to various parties on commercial terms and sometime entities does not charge any interest or charge an interest, which is below market rate....

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Posted Under: CA, CS, CMA |

Draft Accounting Standards for Local Bodies (ASLBs) 13, ‘Leases’

Exposure Draft of the Accounting Standards for Local Bodies (ASLBs) 13, ‘Leases’ for public comments ICAI/TD/CPF&ASLB/2019-20 , Dated: August 8, 2019 Dear Sir/Madam,  Sub: Exposure Draft of the Accounting Standards for Local Bodies (ASLBs) 13, ‘Leases‘ for comments.  At the outset, we would like to inform you that du...

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Posted Under: CA, CS, CMA |

Ind AS – Common Control Business Combinations

Business organisations enter into a bunch of restructuring transactions which satisfy the definition of business combinations as per Ind AS 103. There is also a requirement to understand the accounting, tax, presentation and reporting requirements in the case of common control transactions. ...

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Posted Under: CA, CS, CMA |

A Simple Version of INDAS-2 and IAS-2

Accounting for Inventories AS-2 Valuation of Inventories IAS-2 Inventories INDAS-2 Inventories Important Points are as follows 1. Matching Concept is the relevant concept for Inventories 2. Definition Inventories Consists of the following Held for sale in the ordinary course of business(finished goods) In the process of production of such...

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Posted Under: CA, CS, CMA |

Compendium of Accounting Standards (As on July 1, 2019)

This Compendium of Accounting Standards is relevant for all companies, other than the companies following Ind AS, and also to non-corporate entities for the purpose of preparation and presentation of good quality financial statements....

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Posted Under: CA, CS, CMA |

Accounting Standards : Quick Referencer (As on April 1, 2019)

In order to provide a quick guide of the key provisions of the Accounting Standards, an initiative has been taken up by the Accounting Standards Board of ICAI to publish a booklet titled ‘Accounting Standards: Quick Referencer’....

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Posted Under: CA, CS, CMA |

Introduction to Indian Accounting Standards : Financial Instruments

Indian Accounting Standards Standards applicable to Financial Instruments: Ind AS 32 : Financial Instruments: Presentation Ind AS 39 : Financial Instruments: Recognition and Measurement Ind AS 107 : Financial Instruments: Disclosures Ind AS 109 : Financial Instruments OBJECTIVES Standard No. Standard Objective Ind AS 32 (Complement to Ind...

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Posted Under: CA, CS, CMA |

Deferred Tax related to Assets & Liabilities arising from a Single Transaction

In this Exposure Draft, the International Accounting Standards Board (Board) proposes to amend IAS 12 Income Taxes. The proposed amendments would require an entity to recognise deferred tax on initial recognition of particular transactions to the extent that the transaction gives rise to equal amounts of deferred tax assets and liabiliti...

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Posted Under: CA, CS, CMA |

Download e-book on Indian Accounting Standards (Ind AS)

This is the third edition of our earlier issued publication which contains an overview of various aspects related to IFRS-converged Indian Accounting Standards (Ind AS) such as roadmap for the applicability of Ind AS, carve-outs from IFRS/IAS, changes in financial reporting under Ind AS compared to financial reporting under accounting sta...

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Posted Under: CA, CS, CMA |

Ind AS-8, Accounting Policies, Changes in Accounting Estimates & Errors

ICAI Educational Material on Indian Accounting Standard (Ind AS) 8, Accounting Policies, Changes in Accounting Estimates and Errors In this era of globalised economies, the Institute of Chartered Accountants of India (ICAI) has been at the forefront of ensuring high quality accounting standards in India. Financial reporting has got new di...

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Posted Under: CA, CS, CMA |

Ind AS Technical Facilitation Group Clarification Bulletin 20

Paragraph 5.7.1 of Ind AS 109 requires a gain or loss on a financial asset that is measured at fair value to be recognised in profit or loss – though there are some exceptions to this general requirement, these are not applicable in the case under discussion....

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Posted Under: CA, CS, CMA |

Indian Accounting Standards (Ind AS): Disclosure Checklist

This publication presents a checklist of disclosures requirements under Ind AS applicable to entities preparing its financial statements voluntarily and mandatorily beginning on or after April 1, 2016, in accordance with Ind AS. The disclosures checklist is based on the Indian Accounting Standards (Ind AS) that are effective as on April 0...

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Posted Under: CA, CS, CMA |

ICSI Auditing Standards

CSAS-1 Auditing Standard on Audit Engagement Applicability: 1. Applicable to Auditor undertaking Audit Engagement under any Statute. 2. CSAS-1 deals with the Auditor’s role and responsibilities w.r.t Audit Engagement and the process of entering into an understanding/ agreement with the Appointing Authority. – Effective Date: Objec...

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Posted Under: CA, CS, CMA |

Related Party – AS 18 vs Transfer Pricing

AS 18 defines the disclosure requirements related to related party relationship and transaction between a reporting enterprise and its related parties in the financial statement of that enterprise. The basic assessment during disclosure is centered upon two things viz., who is related party and what amounts to related party transaction. A...

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Posted Under: CA, CS, CMA |

Ind AS Technical Facilitation Group Clarification Bulletin 19

Issue 1: Entity A is required to apply Ind ASs in preparing its financial statements for periods beginning on or after April 1, 2018. Thus, the date of Entity A’s transition to Ind ASs is April 1, 2017....

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Posted Under: CA, CS, CMA |

ICAI releases Compendium of Ind AS (E-version) effective from April 01, 2019

ICAI Press Release ICAI releases Compendium of Ind AS (E-version) effective from April 01, 2019 Indian Accounting Standards Framework (Ind AS Framework) is based on IFRS Standards. IFRS Standards undergo regular upgrades due to issuance of new Standards and amendments in existing Standards by way of annual improvements etc. The Central Go...

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Posted Under: CA, CS, CMA |

New Era of Accounting-Transition to Ind as

The Indian Accounting Standards (IND AS) are Accounting Standards, harmonized with IFRS (International Financial Reporting Standards)/IAS (International Accounting Standards) to make Financials Accounts and Reports of Indian Companies internationally accessible, acceptable, transparent and comparable....

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Posted Under: CA, CS, CMA |

Accounting Standard 34, Interim Financial Reporting- Exposure Draft

Exposure Draft Accounting Standard (AS) 34 Interim Financial Reporting- Interim financial report means a financial report containing either a complete set of financial statements as described in AS 1, Presentation of Financial Statements, or a set of condensed financial statements (as described in this Standard) for an interim period....

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Posted Under: CA, CS, CMA |

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