The weekly messenger | Edition 03.19

Accounting News

New standard on leases now effective - 8 January 2019

The new standard on leases i.e. IFRS 16, ‘Leases’, which was issued in January 2016 has been made effective for the annual reporting periods beginning on or after 1 January 2019, thereby replacing the erstwhile IAS 17 ‘Leases’ and related Interpretations. The new standard has changed the accounting substantially for lessees, thereby eliminating the concept of lessee’s classification of leases as either operating leases or finance leases and requiring the lessees to capitalise majority of them by recognising the same as a lease liability and right – of – use asset on the balance sheet. However, the changes with respect to lessors are very few.

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IFRS for SMEs modules - 8 January 2019

The International Financial Reporting Standards (IFRS) Foundation is developing stand - alone modules, for each section of the 2015 version of the IFRS for SMEs (Small-to-Medium Enterprises) Standard. The purpose of designing these modules is to provide support to anyone learning about, applying, or reading financial statements prepared using, the IFRS for SMEs Standard. The Module inter- alia includes:

• Requirements;
• Significant estimates and other judgements;
• Comparison with full IFRS Standards etc.

For more information, click here.

Educational Material on Ind AS 110, Consolidated Financial Statements - 10 January 2019

The Institute of Chartered Accountants of India has issued an Educational Material on Indian Accounting Standard (Ind AS) 110, ‘Consolidated Financial Statements’, in order to provide guidance by way of Frequently Asked Questions (FAQs) and illustrations explaining the principles enunciated in the Standards. The Education Material inter-alia include:

• Summary of Ind AS 110;
• FAQs;
• Major differences between Ind AS 110 and AS 21; and
• Major differences between Ind AS 110 and IFRS 10.

For more information, click here.

Auditing News

A new framework for Audit Quality Disclosures - 8 January 2019

The Centre for Audit Quality (CAQ) in consultation with a range of CAQ member firms, has developed an ‘Audit Quality Disclosure Framework’ in order to assist the firms in their ongoing efforts to determine, assess, and communicate information that may be useful to stakeholders in understanding how audit quality is supported and monitored at the firm level. The aforesaid framework adheres to three key principles:

• It is voluntary and illustrative, as opposed to prescriptive or all-inclusive;
• It is flexible, giving firms the ability to tailor the information that is most relevant and meaningful to audit quality;
• It relates to disclosure of a system of quality control at a firm level, rather than at the engagement level.

For more information, click here.

Regulatory News

Re - Constitution of Steering Committee of NFCSR - 7 January 2019 

The Ministry of Corporate Affairs (MCA), pursuant to the approval of Hon’ble Minister of Corporate Affairs has re-constituted the Steering Committee of National Foundation for Corporate Social Responsibility (NFCSR) with an objective of providing a roadmap, overseeing the functioning and steering the activities of NFCSR for providing policy inputs and policy advocacy in the area of Corporate Social Responsibility (CSR).
 
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Re- Constitution and Re-naming of Advisory Group NFCSR as "Governing Council", NFCSR - 7 January 2019

The MCA, pursuant to the approval of Hon’ble Minister of Corporate Affairs has re – named ‘the Advisory Group of NFCSR’ as ‘Governing Council, NFCSR’ and has also re-constituted the aforesaid group to make NFCSR, a vibrant body of a National Stature Level providing policy inputs and policy advocacy in the areas of CSR. However, the NFCSR will continue to be housed and managed by the Indian Institute of Corporate Affairs.
 
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The Ministry of Law and Justice has issued the Companies (Amendment) Ordinance, 2019, promulgated by the President, in order to further amend the Companies Act, 2013. Some of the major sections which have undergone changes pursuant to the aforesaid Ordinance are:  

• Section 2(41) - Changes in definition of Financial Year;
• Insertion of new Section 10A - Commencement of business, etc.;
• Section 12 - Registered office of a company;
• Section 14 - Alteration of Articles;
• Section 77 – Duty to register charges, etc.;
• Section 90 – Register of significant beneficial owners in a company;
• Section 164 - Disqualifications for appointment of directors;
• Section 441 - Compounding of certain offences etc.

The aforesaid ordinance shall be deemed to come into force w.e.f. 2 November 2018.
 
For more information, click here. 

SEBI constitute Research Advisory Committee - 8 January 2019

The Securities and Exchange Board of India (SEBI), in order to strengthen its research function and enhance its linkage to policy making, has constituted a Research Advisory Committee, whose terms of reference are as under:

• Defining objectives, scope and direction of research relevant for development and regulation of capital markets in India and for SEBI, especially keeping in view the linkage of research to policy making;
• Strategy for effective execution and delivery of research identified under the above-mentioned point;
• Promotion/development/maintenance of databases relevant for capital market regulation research;
• Exploring research collaborations with external researchers, including other regulators as well as academic institutions, both domestically and overseas, as appropriate;
• Promotion/development of research proposals in-house as well as by interested external researchers.

For more information, click here.

 
The Reserve Bank of India (RBI) has decided to defer the implementation of the last tranche of 0.625% of Capital Conservation Buffer (CCB) which is required to be maintained by Banks from 31 March 2019 to 31 March 2020. Accordingly, the minimum capital conservation ratios as per the ‘CCB Framework’ issued by the RBI, as applicable from 31 March 2018, will also apply from 31 March 2019 till the CCB attains the level of 2.5% on 31 March 2020. 
 
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The Central Government (CG) has amended the Notification no. G.S.R. 381(E), dated 27 June 2006  issued by the Ministry of Finance, that provides the names of the specified officer, authority as notified by the CG for the purpose of clause (ii) of Section 66 ‘Disclosure of information’ of ‘The Prevention of Money – Laundering Act, 2002’, to whom the Director or any other authority specified by him furnish any information received or obtained by them in the performance of their functions under this Act, which may, in their opinion, be necessary for the purpose of the officer, authority or body specified in clause (i) or clause (ii) to perform his or its functions under that law.
 
Now, the CG has inserted one more entry for the purpose of clause (ii) of the aforesaid Section of the Act which reads as follows; ‘the Inquiry Authority appointed under sub-rule (2) of Rule 14 of the Central Civil Services (Classification , Control and Appeal) Rules, 1965 or the provisions of the Public Servants (Inquiries) Act, 1850 and any other preliminary enquiry authority appointed with concurrence of the Central Vigilance, by the Disciplinary Authority, with the prior approval of the Central Government’.
 
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The Central Board of Indirect Taxes and Customs has issued certain updates w.r.t. Goods and Services Tax (GST), whose links are as follows: 
 
For more information w.r.t recommendations made during 32^nd meeting of the GST Council held on 10 January 2019, click here.