IFRS

IFRS -15 Revenue From Contracts with Customers

CA, CS, CMA - > Earlier, there were many IAS and guidance notes (IFRIC) dealing with revenue recognition but this IFRS brought all IAS & guidance notes at one place to deal with revenue recognition including customer loyalty point which was earlier dealt by IFRIC. Before new IFRS – 15 After IFRS -15 IAS 18 Revenue from Sale of […]...

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IFRS-10 Consolidated Financial Statement

CA, CS, CMA - International Financial Reporting Standard (IFRS) – 10 CONSOLIDATED FINANCIAL STATEMENTS 1. Scope of IFRS 10 IFRS 10 addresses the scope of consolidated financials statements and the procedures for their preparations. The scope of IFRS 10 covers: 1. The reporting entities (investor / parent entities) that are required to assess control ...

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Indian Accounting Standard 16 – Property, Plant & Equipment

CA, CS, CMA - Ind AS 16 discusses whether expenditure incurred should be should be capitalised as PPE or charged to P&L statement, retirement of PPE, depreciation and disposal of PPE. Scope Definitions I. Property, Plant and Equipment (PPE) – PPE are tangible items which are held for use in producing or supply of goods or services, rentals to...

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Indian Accounting Standard 116 – ‘Leases’

CA, CS, CMA - 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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Recent amendment in IFRS 16 & Proposed amendment of Ind AS 116 

CA, CS, CMA - Recent amendment in IFRS 16 and exposure draft (Proposed amendment) on Ind AS 116 – Leases for accounting of rent concession due to Covid-19 The pandemics of coronavirus, or COVID-19 has been here for a while and after the first shock of its quick spread and effect on people’s health, we are all seeing its […]...

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Exposure Draft of Interest Rate Benchmark Reform – Phase 2

CA, CS, CMA - Globally, many jurisdictions have been taking steps for replacing existing Interbank offered rates (IBORs) with some alternate benchmark rates as a result of recommendations of Financial Stability Board. In this regard, IASB identified two groups of accounting issues that could affect financial reporting due to the reform:...

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ICAI & ICAI RVO issues Concept Paper on All About Fair Value

CA, CS, CMA - Financial reporting in India has undergone a significant transformation owing to the adoption of Indian Accounting Standards (Ind AS) and fair value is the guiding principle in financial reporting across the globe. The Institute of Chartered Accountants of India (ICAI) converged accounting standards with IFRSs and accordingly, the financi...

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Proposed amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 & IFRS 16

CA, CS, CMA - Exposure Draft on Interest Rate Benchmark Reform-Phase 2 (Proposed amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) – (21-04-2020) The Institute of Chartered Accountants of India In 2018, International Accounting Standards Board (IASB) decided to add a project to its work plan to consider the financial reporting implication...

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Comprehensive review of IFRS for SMEs Standard issued by IASB

CA, CS, CMA - International Accounting Standards Board (IASB) commences second comprehensive review of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs)....

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Exposure Draft- General Presentation and Disclosures

CA, CS, CMA - 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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Implementation of Ind AS in Insurance Sector deferred for 2 Years

Ref: IRDA/F&A/CIR/ACTS/146/06/2017 - (28/06/2017) - Implementation of Ind AS in the Insurance Sector in India has been deferred for a period of two years and the same shall now be implemented effective 2020-21....

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MCA Press Release No. 3/2010 on Implementation of IFRS Dated 31st March, 2010

PRESS RELEASE-3/2010 - (31/03/2010) - In the meeting held on 29th March, 2010, the Core Group deliberated and approved the Roadmap recommended by Sub-Group I in respect of insurance companies, banking companies and non-banking finance companies. The Roadmap recommended by Sub-Group I for such classes of companies is as under:-...

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MCA Press Release No. 2/2010 on Implementation of IFRS dated 22.01.2010

PRESS RELEASE-2/2010 - (22/01/2010) - The Press Information Officer, Press Information Bureau, Ministry of Information and Broadcasting, with the request that the above mentioned Press Note may be given wide publicity....

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Recent Posts in "IFRS"

Exposure Draft of Interest Rate Benchmark Reform – Phase 2

Globally, many jurisdictions have been taking steps for replacing existing Interbank offered rates (IBORs) with some alternate benchmark rates as a result of recommendations of Financial Stability Board. In this regard, IASB identified two groups of accounting issues that could affect financial reporting due to the reform:...

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Posted Under: CA, CS, CMA |

IFRS -15 Revenue From Contracts with Customers

> Earlier, there were many IAS and guidance notes (IFRIC) dealing with revenue recognition but this IFRS brought all IAS & guidance notes at one place to deal with revenue recognition including customer loyalty point which was earlier dealt by IFRIC. Before new IFRS – 15 After IFRS -15 IAS 18 Revenue from Sale of […]...

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Posted Under: CA, CS, CMA |

IFRS-10 Consolidated Financial Statement

International Financial Reporting Standard (IFRS) – 10 CONSOLIDATED FINANCIAL STATEMENTS 1. Scope of IFRS 10 IFRS 10 addresses the scope of consolidated financials statements and the procedures for their preparations. The scope of IFRS 10 covers: 1. The reporting entities (investor / parent entities) that are required to assess control ...

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Posted Under: CA, CS, CMA |

Indian Accounting Standard 16 – Property, Plant & Equipment

Ind AS 16 discusses whether expenditure incurred should be should be capitalised as PPE or charged to P&L statement, retirement of PPE, depreciation and disposal of PPE. Scope Definitions I. Property, Plant and Equipment (PPE) – PPE are tangible items which are held for use in producing or supply of goods or services, rentals to...

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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 |

Recent amendment in IFRS 16 & Proposed amendment of Ind AS 116 

Recent amendment in IFRS 16 and exposure draft (Proposed amendment) on Ind AS 116 – Leases for accounting of rent concession due to Covid-19 The pandemics of coronavirus, or COVID-19 has been here for a while and after the first shock of its quick spread and effect on people’s health, we are all seeing its […]...

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Posted Under: CA, CS, CMA |

Exposure Draft on Covid-19-Related Rent Concessions

Exposure Draft on Covid-19-Related Rent Concessions (Proposed amendment to Ind AS 116, Leases) corresponding to Amendments in IFRS 16 issued by the International Accounting Standards Board (IASB) The implementation of high quality Indian Accounting Standards (Ind ASs) by Indian Companies is a monumental step in the accounting history of...

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Posted Under: CA, CS, CMA |

IFRS at a Glance & IFRS

Vishal Gupta The International Accounting Standards Board (IASB) is an independent and privately funded body that develops and approves IFRS standards. Prior to 2003, standards were issued as International Accounting Standards (IASs). In 2003, IFRS 1 was issued and all new standards are now known as IFRS standards. The IFRS Foundation has...

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Posted Under: CA, CS, CMA |

ICAI & ICAI RVO issues Concept Paper on All About Fair Value

Financial reporting in India has undergone a significant transformation owing to the adoption of Indian Accounting Standards (Ind AS) and fair value is the guiding principle in financial reporting across the globe. The Institute of Chartered Accountants of India (ICAI) converged accounting standards with IFRSs and accordingly, the financi...

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Posted Under: CA, CS, CMA |

Proposed amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 & IFRS 16

Exposure Draft on Interest Rate Benchmark Reform-Phase 2 (Proposed amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) – (21-04-2020) The Institute of Chartered Accountants of India In 2018, International Accounting Standards Board (IASB) decided to add a project to its work plan to consider the financial reporting implication...

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Posted Under: CA, CS, CMA |

Comprehensive review of IFRS for SMEs Standard issued by IASB

International Accounting Standards Board (IASB) commences second comprehensive review of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs)....

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Posted Under: CA, CS, CMA |

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 |

Impact of Adoption of IFRS/Ind AS

This article is intended to make you understand the major impact both in terms of advantages and disadvantages of the adoption of Converged IFRS i.e Indian Accounting standards (Ind AS) on the financial statements and the working of the companies both. Majority of you or I can say all of you are the finance professionals […]...

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Posted Under: CA, CS, CMA |

Ind AS Technical Facilitation Group Clarification Bulletin 23: How to give effect to Taxation Laws (Amendment) Ordinance, 2019

Whether a domestic company can give effect to lower tax rate as per the Ordinance while determining current tax and deferred tax assets or liabilities for the purpose of presenting interim results/ interim financial statements as of 30 September 2019?...

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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 |

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 |

A Quick Snapshot of AS/IND-AS/IFRS

A Quick  Snapshot of Concepts of AS/IND-AS/IFRS  Accounting standards deal with recognition of events and transactions, measurement of transactions and events, presentation of transactions and events and disclosure requirements. In India ICAI issues accounting standards on the relevant subject for non-corporate bodies and The Central Go...

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Posted Under: CA, CS, CMA |

How IFRS 9 revolutionised financing

IFRS 9 The financial crisis of 2008 was a wakeup call for all the financial and banking institutes as well as business entities of the world, that it was a time to have a fundamental change in the way finance is done. This global financial crisis was quite different from the previous one because this […]...

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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 |

IFRS 9 Financial Instruments: Transition Impact on Banks Across Globe

In the first decade of new millennium the world witnessed unprecedented global financial crisis with severe adverse impact on many economies. Unlike previous crisis, large internationally active Banks from advanced economies were at the epicentre of the crisis. The crisis impact was felt across the globe, calling for urgent and unified re...

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Posted Under: CA, CS, CMA |

Amendments to IFRS 17, Insurance Contracts

In this Exposure Draft, the International Accounting Standards Board (Board) proposes targeted amendments to IFRS 17 Insurance Contracts, issued in May 2017 to respond to concerns and challenges raised by stakeholders as IFRS 17 is being implemented....

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Posted Under: CA, CS, CMA |

Reference to Conceptual Framework Proposed amendments to IFRS 3

In this Exposure Draft, the International Accounting Standards Board (Board) proposes narrow-scope amendments to IFRS 3 Business Combinations. The amendments would update a reference to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. Updating the reference without ma...

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Posted Under: CA, CS, CMA |

Financial Reporting: Why our standards need an innovative overhaul?

Progressing from Accounting Standards to IndAS (or globally IFRS) has indeed been a huge step up in the Accounting world. Companies as well as regulators haven’t yet recovered from the dust risen by the IFRS storm. However, is this change enough? Is IFRS sufficient to factor in the changes happening at lightening speed in the […]...

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Posted Under: CA, CS, CMA |

IFRS 8 Operating Segments

♦ In April 2001 the International Accounting Standards Board (Board) adopted IAS 14 Segment Reporting, which had originally been issued by the International Accounting Standards Committee in August 1997. ♦ In November 2006 the Board issued IFRS 8 Operating Segments to replace IAS 14. ♦ Core principle An entity shall disclose informa...

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Posted Under: CA, CS, CMA |

Revenue recognition under IND-AS & IFRS – Comparative overview

Revenue recognition under IND-AS & IFRS – Comparative overview- Article discusses Applicability of IFRS-15 and IAS-115 and further discusses the following- Revenue recognition steps- 5 steps model Step: 1  Identify the contract(s) with a customer Step: 2 Identify the performance obligations in the contract Step: 3 Determine the tra...

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Posted Under: CA, CS, CMA |

IFRS 2 Share-Based Payments

Equity-settled, in which the entity receives goods or services as consideration for equity instruments of the entity (including shares or share options). Cash-settled, in which the entity receives goods or services by incurring a liability to the supplier that is based on the price (or value) of the entity’s shares or other equity instr...

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Posted Under: CA, CS, CMA |

PROTECTIVE RIGHTS – If to consider for controlling percentage?

While analyzing the control aspect on any investments made by an entity, we usually go by the definition which suggests that while evaluating such rights which provides right to variable returns from the entity in which such investment has been made. In other words the control is usually defined to have power over the investee’s [&helli...

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Posted Under: CA, CS, CMA |

Non-Cash Collateral provided by borrower: Accounting treatment under Ind-As

The article deals mainly with the COLLATRERAL which is non-cash in nature and an agreement or custom (common business practices) exists which defines the rights and obligation attached to the collateral for transferee (who receives such collateral) and for transferor (who provides such collateral)....

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Posted Under: CA, CS, CMA |

IFRSs Implementation practical issues

Under globalization scenario, business are crossed the boundaries of the country and the level of stakeholders are also spread across the world. So, the requirement of presenting the financial statement in common platform is an inevitable business requirement to satisfy all the stakeholders. The IFRSs are the standards which helps to prep...

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Posted Under: CA, CS, CMA |

Examples of accounting under IFRS

The purpose of this article is to learn about some common concepts under IFRSs, namely, the (i) time value of money comprising present value and future value of cash flows, (ii) simple and compound interest (iii) effective rate of interest (EIR), (iv) annuities, plus...

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Posted Under: CA, CS, CMA |

Common business contracts and how to get IFRS numbers

This quick guide may be useful for professional accountants in practice or those working in Industry or Financial services firms like Banks/FIs, to calculate IFRS values for certain common business contracts which are usually high valued and significant in business operations, into the financial statements. So, here we go!...

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Posted Under: CA, CS, CMA |

Key practical tips in practice of IFRSs (Ind ASs)

IFRSs (IND ASs being the Indian version) are now applicable in India for all listed and non-listed majors too including the requirement to prepare group financial statements. Chartered accountants in particular have to apply due diligence to measure and recognise fair values of financial assets, financial liabilities, financial derivative...

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Posted Under: CA, CS, CMA |

Draft IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Exposure draft of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors for comments The IASB has issued the exposure draft of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. The last date for sending comments is 27 July 2018.  In this Exposure Draft, the International Accounting Standards Board (Bo...

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Posted Under: CA, CS, CMA |

Risk and IFRS

Financial reporting under IFRSs is deeply connected with risk management. Entity which decides to adopt IFRSs should also ensure that it has a robust risk management (RM) system. This is for the reason that different IFRSs give references to the entity’s market and credit risk documented policy which helps determine if an asset has or h...

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Posted Under: CA, CS, CMA |

Ind AS and corresponding impact of MAT computations – tracking the evolution

Sandeep Dasgupta & Risha Gandhi IFRS adoption in India: With globalization of businesses and imminently increasing need for transparent, comparable financial information across markets, the International Accounting Standards Board (IASB) embarked on developing, a single set of high quality, understandable and enforceable global accoun...

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Posted Under: CA, CS, CMA |

Need for Standards on Valuation in India

Corporate valuations is the main step towards corporate finance activity (which includes capital raising, M&A) and towards meeting regulatory/accounting requirements or for management purposes. ...

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Posted Under: CA, CS, CMA |

Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 10

Issue 1: A Ltd. has given an interest free loan to its subsidiary company B Ltd. Both companies are covered under Phase I of Ind AS roadmap. B Ltd. has recognised the differential of present value of loan amount and its carrying amount as per previous GAAP as ‘Equity’ in its standalone financial statements prepared as per Ind AS. A Lt...

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Posted Under: CA, CS, CMA |

Implementation of Ind AS in Insurance Sector deferred for 2 Years

Ref: IRDA/F&A/CIR/ACTS/146/06/2017 (28/06/2017)

Implementation of Ind AS in the Insurance Sector in India has been deferred for a period of two years and the same shall now be implemented effective 2020-21....

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Disclosure Initiative- Principles of Disclosure; Post-implementation Review- IFRS 13 Fair Value Measurement

As you are kindly aware, the existing Accounting Standards (AS) and the Indian Accounting Standards (Ind AS) are based on the IFRS issued by the International Accounting Standards Board (IASB). The IASB, before issuing the new/amendments to IASs, issues the Exposure Draft for public comments. ...

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Posted Under: CA, CS, CMA |

Post-implementation Review – IFRS 13 Fair Value Measurement

The IASB has issued a request for stakeholders to tell the Board about their experience with the accounting standard that explains how to measure the ‘fair value’ of assets and liabilities, IFRS 13. The aim is to check whether the Standard meets its objectives. ...

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Posted Under: CA, CS, CMA |

Principal Market Vs. Most Advantageous Market? – Fair Value

Fair Values are being used as one of the measurement requirements to recognize certain transactions/ Assets/ Liabilities as required by respective Accounting Standards (i.e. Ind-As)....

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Posted Under: CA, CS, CMA |

Draft of clarifications to Ind AS 115 Revenue from Contracts with Customers

Following is the Exposure Draft of Clarifications to Ind AS 115, Revenue from Contracts with Customers, issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, for comments....

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Posted Under: CA, CS, CMA |

ICAI Proposes amendments to IFRS 8 and IAS 34

Exposure Draft issued by IASB on Improvements to IFRS 8 Operating Segments (Proposed amendments to IFRS 8 and IAS 34) is for comments only. Comments on the Exposure Draft need to be received by May 26, 2017....

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Posted Under: CA, CS, CMA |

Prepayment Features with Negative Compensation: Proposed amendments to IFRS 9

Exposure Draft issued by IASB on Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9) is for comments only. Comments on the Exposure Draft need to be received by May 15, 2017....

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Posted Under: CA, CS, CMA |

BREACH of Covenants of a Loan – “Classification change” under Ind-AS

Almost every loan agreement will be carrying some of the terms and conditions that are required to be fulfilled by a borrower to keep that loan continue as per the agreed terms OR an immediate re-payment might be initiated which can end the relationship related to the debt. Often these terms are e.g. agreed debt […]...

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Posted Under: CA, CS, CMA |

Insurance Companies – “Un-bundling of deposits” as per Ind-As/ IFRS

As per MCA notification, Insurance Companies are required to transit their financial statements into Ind-As starting from April 2018 with previous period comparatives. Since everyone is waiting for a comprehensive accounting standards i.e. IFRS-17 (which will eventually replace the existing IFRS-4/ Ind-As 104) which is likely to be issued...

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Posted Under: CA, CS, CMA |

Appointment of CA Firms with PSPCL for IND-AS implementation

The offer shall be considered only from Indian, Technically competent, experienced and financially sound Chartered Accountant firms who meet the following pre-qualification requirements/criteria:...

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Posted Under: CA, CS, CMA |

TERM -EXTENSION Clause – Embedded Derivatives as per Ind-As IFRS

The term extension clause could be kind of automatic or could be at the option of borrower which indicates that if the rates at which the extension can be done is below market rate then borrower will surely go for extension....

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Posted Under: CA, CS, CMA |

Normal Sale /Purchase transactions – Embedded Derivatives as per Ind-As IFRS

Normal sale and purchase transactions (i.e. non financial instruments) which are being done based on delivery basis still can contain embedded derivatives in case of payments have been contracted in foreign currency....

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Posted Under: CA, CS, CMA |

Lease contracts with “Inflation- Index”, “Contingent rentals” or “Variable Intt.” – Embedded Derivatives as per Ind-As/ IFRS

Leased Assets are being given to earn rentals and all future rentals normally should be agreed in a way where it can actually beat inflation amount to keep that earning relevant for owner of assets....

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Posted Under: CA, CS, CMA |

“Credit Derivatives ” – Embedded Derivatives as per Ind-As/ IFRS

In finance, a credit derivative refers to any one of various instruments and techniques designed to separate and then transfer credit risk or the risk of an event of default of a corporate or sovereign borrower, transferring it to an entity other than lender or debtholder....

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Posted Under: CA, CS, CMA |

“Foreign Currency Bonds ” – Embedded Derivatives as per Ind-As/ IFRS

In continuation of previous articles Double-double test, Caps & Floor & Call/Put/ Prepayments - Embedded Derivatives as per Ind-As/ IFRS, Foreign currency denominated bonds/debts are very common in practice and these are being issued for payments into some foreign currency either for Principal or Interest related payments....

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Posted Under: CA, CS, CMA |

Principal Vs. Agent – Revenue (Gross or Net?) as per Ind-As/ IFRS

Many times Goods and Services are being sold/ rendered by using different kind of arrangements/ entities based on terms and conditions which could change Revenue Recognition criteria in its entirety and a careful assessment is always required because if any incorrect assessment is done it could have a significant impact on amount of reven...

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Posted Under: CA, CS, CMA |

Auditors/ Management perspective – “Equity Investments per Ind-As”

At present all Investment are being classified between long term and current and are being recognized at cost (subject to some permanent diminution and in case current investment lower of fair value or cost) , hence what are the options available to value Equity Investments under Ind-As?...

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Posted Under: CA, CS, CMA |

Appointed Date Vs. Acquisition Date – Acquisition of Business per Ind-As

Acquisition of business is quite common in today’s fast moving dynamics of the world and every such stakeholder of the entity would be interested to know all implications related to its valuation or for reporting purposes....

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Posted Under: CA, CS, CMA |

“Calls, Puts or Prepayments Options” – Embedded Derivatives as per Ind-As/ IFRS

It is very common to have call, put or prepayment options associated with any debt instrument which talks about the right/ obligations to issuer/ holder for ending this Instrument by settling agreed amount as defined....

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Posted Under: CA, CS, CMA |

“Caps & Floors” – Embedded Derivatives as per Ind-As/ IFRS

Let’s first understand what does CAPS & FLOORS means in Financial Market and why these are being used in various lending arrangements....

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Posted Under: CA, CS, CMA |

“Double- double test” – Embedded Derivatives as per Ind-As/ IFRS

All derivatives which are embedded with any host liability are required to be assessed if that derivative part needs to be separated or not as per the below requirement of Ind-As 109 Financial Instruments...

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Posted Under: CA, CS, CMA |

Consolidation of “Structured Entities” – An Accounting perspective

There are certain contractual arrangements which actually drive overall activities of an entity comparing to its voting structure where it does not has any power/ significance. ...

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Posted Under: CA, CS, CMA |

Loss of Control in a Subsidiary with Multiple Transactions – Ind-As/ IFRS

Whenever there is a disposal into a subsidiary Investment, one has to look at whether it is a loss of control or it’s a disposal without losing the existing control by its Parent Company....

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Posted Under: CA, CS, CMA |

Convertible Bonds Calculations– Equity & Liability portion: Ind-As/ IFRS

Many of our readers requested to share actual calculation and the process to bifurcate any convertible bonds between Equity & Liability and its related Journal Entry....

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Posted Under: CA, CS, CMA |

Contingent Assets- “Different way of recognition by Ind-As”

Current Indian Accounting has below provisions/ requirements related to the Contingent Assets – AS -29 Provisions, Contingent Liabilities and contingent assets Para -30- An enterprise should not recognise a contingent asset....

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Posted Under: CA, CS, CMA |

Associate/ JV (Equity accounted) to Subsidiary- “Step Acquisition” – Ind-As/ IFRS

Once an entity obtains a significant influence (as per Ind-As-28) or Joint control (as per Ind-As-111 to fall under JV) then Equity accounting needs to be applied. ...

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Posted Under: CA, CS, CMA |

Vodafone/ Idea Merger “ Option to buy Shares given”- Ind-As Accounting approach

Recent news on approving merger of Vodafone & Idea at their board level has given many questions related to its accounting under the new framework i.e. Ind-As. ...

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Change in Functional Currency – Ind-As/ IFRS

As you all might be aware about the meaning and significance of functional currency for an entity whose financial statements are being prepared under Ind-As/ IFRS. ...

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Foreign Currency Borrowings- “Exchange Loss Capitalization” – Ind-As/ IFRS

There are certain foreign currency borrowings which have been taken in order to construct/ create some of the assets of the entity. Company is currently availing option given under para 46/46A of AS-11 and amortizing exchange difference over the period of loan....

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Posted Under: CA, CS, CMA |

Fair Value of “Operating Leases” when acquisition of a Business – Ind-As/ IFRS

Acquisitions of new businesses are quite common strategies for any business to leverage its exisiting competencies or to achieve an economy of scale. Apart from various valuation analysis that are being done while finalizing any new business acquisition decisions...

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Posted Under: CA, CS, CMA |

Discounting the Provisions (Time value of Money)-Ind-As/ IFRS

CA Anuj Agrawal Provisions are being made where there is an uncertainty of an Amount and Timing to discharge these liabilities which are being calculated based on estimations & other procedures adopted by the management prescribed as per applicable accounting standards. Under the current accounting practice there is no requirement for...

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Constructive Obligation – Ind-As/ IFRS

Constructive as per its dictionary meaning it is something which is not obvious or stated explicitly and it perhaps could be derived by inference (presumptions) and the word Obligation means a duty or commitment....

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ICICI Bank recent issued Dollar Bonds (Equity or Liability?)-Ind-As/ IFRS

Those who keep an eye on latest trends over fund raising by Indian entities, they would have noticed that recently ICICI bank has initiated a Dollar Bond issue through its Dubai branch. ...

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Contingent consideration in Business combinations – Ind-As/ IFRS

When an acquisition of a business is being made and the consideration for such business to include some portion of amount which is NOT certainly determinable and depending upon some future event/s to be met and accordingly an expectation is required to be built to calculate that uncertain portion called Contingent consideration....

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IFRS convergence to Ind AS – Banking scene: 2 – Study of new Financial Statements

I have informed in my earlier article published on 30th August, 2016 titled ‘IFRS convergence to Ind AS – Banking scene’ that banks would submit on Sept 30,2016, Proforma Ind AS financial statements in terms of RBI guidelines dated June 23, 2016, to RBI. ...

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Posted Under: CA, CS, CMA |

Domino’s- Accounting of Franchise agreement in business acquisition-Ind-As/ IFRS

Lets understand a situation where its franchisor i.e. Domino’s USA takes over or bought the business of Domino’s India under Business combination. Now, questions which will be arisen related to this existing franchise agreement are-...

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Posted Under: CA, CS, CMA |

“ONGC” –Abandonment cost/ Decommissioning liability – Ind-As/ IFRS

Cost of temporary occupation of land, successful exploratory wells. all development wells, depreciation on related equipment. facilities and estimated Future abandonment costs are capitalised and reflected as Oil & Gas Assets....

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Posted Under: CA, CS, CMA |

Domino’s Pizza- “Franchise Agreement”- An accounting perspective- Ind-As/ IFRS

We all must have read about Jubilant Food i.e. Domino’s pizza which is essentially under a franchise agreement with Domino’s pizza USA (as per its annual report). Current accounting practices in India does not have any specific guidance on such franchise agreements in relation to its accounting specifically...

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U. S. Taxation: Partnership Firms– LLC & others– Series No. 1

It is a common debate among accounting professionals that Partnership firms in U.S.A. would solve all the problems and that they would recommend their clients to have the same structure for business. ...

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Posted Under: CA, CS, CMA |

DE-MERGER or non-cash dividend to Shareholders – Ind-As/ IFRS

There are many instances where an entity distributes its assets e.g. Property, plant & equipments or unit of its business i.e. in a form of Demerging an entity or distributing an ownership interest in an entity (may be subsidiary) by way of dividend to its existing shareholders....

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Posted Under: CA, CS, CMA |

SILO – “An accounting concept” – Ind-As/ IFRS

Silo is relatively new term for many of us. Dictionary meaning of the same is “something which is in isolation”. As the meaning suggest, there are many instances where an entity is operating in a way where its certain/ specified assets & liabilities are being controlled by some other entity in-spite of running overall separate legal ...

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Posted Under: CA, CS, CMA |

Security deposits (given or taken): “Fair Value” – Ind-As/ IFRS

As per the current accounting system in India, there is no specific treatment defined for any kind of security deposits which are being taken/ given in normal course of business by an entity and all such deposits that are refundable shown at their respective transaction values....

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Posted Under: CA, CS, CMA |

TAKE or PAY long term commodities contracts- Ind-As/ IFRS

There would be many instances where a long term commodity purchase or sale agreement are being entered between the parties where there is a quantity to be delivered which is mentioned in the contract and it gives certain flexibility to avoid (if required) taking agreed quantity by paying cash (adjustment of movement in commodity values to...

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Posted Under: CA, CS, CMA |

Convergence to IFRS (Ind AS) – Indian Insurance scene

Insurers are supposed to adopt (Ind AS) as per above timelines though they would have been sending proforma (Ind AS) financial standards to IRDA from the quarter ended December 31, 2016 onwards. ...

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Posted Under: CA, CS, CMA |

De-recognition of Financial Liabilities – IND-AS/ IFRS

As we are gradually moving towards converged IFRS (known as IND-AS in India) in India, there are some rules which have been prescribed by the new accounting standard related to de-recognition of financial liabilities subject to the fulfill of certain requirements....

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Posted Under: CA, CS, CMA |

Proposed Buy back of Shares by TCS- An Accounting perspective-Ind –As/ IFRS

CA Anuj Agrawal We all got to hear by now that some major companies in India including Tata Consultancy Services (TCS) are planning to buy back its shares in order to improve efficiencies into its earning per share. We will not discuss about the reasons and shortcoming of Buyback schemes which are normally being done […]...

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Posted Under: CA, CS, CMA |

Commitment fees AND Processing fees on Loans: Ind-As / IFRS

In general terms one can understand that a Commitment fees is being charged for some approved facility which can be drawn down in future at the same terms which has been agreed initially between lender and borrower. ...

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Posted Under: CA, CS, CMA |

Share Application money pending allotment – Ind-As/ IFRS

It is quite common where an entity provides some amounts as Share Application Money for the sake of allotment of such shares in future. The amount in substance will be advance given for such investment and the entity is waiting for the same to be converted into an Equity in future....

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Write-offs (Banks)- IND-AS/ IFRS

While Indian Banks will converge towards Ind-AS (IFRS) with effect from 1 April 2018 onwards, Some of them already started taking action to make their books in line with the requirements of Ind-AS....

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Posted Under: CA, CS, CMA |

Public- Private Arrangements or “Service Concession arrangements”- IND-AS/IFRS

Public related many activities/ services around the world are being given to private entities to build and operate and after certain point of time (depending upon the contractual arrangements between the parties) it is being handed over back to the entity (generally known as Grantor) who initially requested....

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Posted Under: CA, CS, CMA |

Cross Holding Associates – Ind-As/ IFRS

CA Anuj Agrawal There could be a situation where one entity is having significant influence over the other by holding some portion of equity capital (assuming other conditions are met) and at the same time the other entity also having significant influence over the first entity by holding some shares. Ind-As 28 “Investment in Associates...

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Posted Under: CA, CS, CMA |

Concessional Loans (below market rates) or discounted items sold to employees- Ind-As/ IFRS

It is quite general practice to provide concessional loans and/ or to provide goods of an entity to its own employees. These are generally treated at their normal transaction values and no fair values comparison is being taken into account....

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Posted Under: CA, CS, CMA |

Financial Guarantees- IND-AS/ IFRS

There are many situations in businesses where a Parent Company issues some kind of written piece of paper (we usually call it guarantee) to a lender on behalf of its Group Companies to provide assurance for repayment of loan in case of default....

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Posted Under: CA, CS, CMA |

Reverse Merger “Idea- Vodafone Proposed deal” – Accounting perspective- Ind-As/ IFRS

As we all know and perhaps keep a track about all latest developments related to proposed merger of Idea and Vodafone, it would be interesting to co-relate this with an interesting topic called Reverse Acquisition from the perspective of latest accounting standards i.e Ind-As/ IFRS ...

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Posted Under: CA, CS, CMA |

Instrument- Equity or Liability? – Ind-As/ IFRS

After the introduction of IFRS (called IND-AS in Indian perspective) in India, now all instruments that are issued by an entity will not accounted just based on their legal form. E.g. Preference shares are being accounted as Equity...

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Posted Under: CA, CS, CMA |

Associates – Key accounting changes – Ind-As/IFRS

As India moves towards International Financial Reporting Standards (Ind-AS/ IFRS) requirements gradually, there are some fundamental changes which are imperative in nature while defining group structure of any entity and/ or requirement to present it on the face of financial statements differently comparing to the present practices in Ind...

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Posted Under: CA, CS, CMA |

Functional Currency – IND-AS/ IFRS

Unlike in current accounting practices in India, there is a need to identify Functional Currency for every entity whose financial statements are being prepared under IND-AS/ IFRS whenever it is applicable to them (based on the roadmap suggested by MCA for convergence of IND-AS in India)....

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Posted Under: CA, CS, CMA |

Investment Property – Ind-As/ IFRS

Entities usually invest strategically into various properties to earn some kind of rentals or value appreciations in future (in substance) and made them available for sale as per the requirements or plans made by the Management. ...

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Posted Under: CA, CS, CMA |

Additional Investment in an Associate (remains associate)– Ind-As/ IFRS

An Investment is being recognized as an Associate if the investor has significant influence over such entity. Under the current practice an entity shows this type of investment at cost in its separate financial statements and it is being accounted based on Equity Method in Consolidated Financial Statements....

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Posted Under: CA, CS, CMA |

De-FACTO Control – Ind-As/ IFRS

We have a situation where standard says that an entity will have power over other entity when it has current ability(refer Para 10 above) to direct the “relevant activities” (as defined in Ind-As 103- “Business Combinations”) of an investee which essentially means that existing rights which can in substance direct these relevant ...

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Posted Under: CA, CS, CMA |

Agriculture accounting – Ind-As/ IFRS

India being an agriculture based economy, many activities are being carried out in way to raise live animals, crop harvesting & selling etc and apart from its dealing within an unorganized sector, there are many corporate sector (either listed or not) which directly or indirectly operate into such agricultural activities in India....

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Posted Under: CA, CS, CMA |

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