The weekly messenger | Edition 04.18

Accounting News

ITFG Clarification Bulletin 13 – 16 January 2018

Indian Accounting Standards (Ind AS) Transition Facilitation Group (ITFG) of Ind AS (IFRS) Implementation Committee has been constituted to provide clarification on various issues related to applicability and/or implementation of Ind AS under the Companies (Ind AS) Rules, 2015, raised by preparers, users and other stakeholders. Recently, ITFG has issued the thirteenth set of clarifications. This bulletin contains clarifications on following significant matters:

• Treatment of Dividend Distribution Tax (DDT) paid on distribution of dividend to preference shareholders;
• Accounting treatment of financial guarantee received from a director of the company;
• Disclosure requirement as per para 34 of Ind AS 108 ‘Operating Segments’ if the company operates into only one segment;
• Applicability of roadmap for applicability of Ind AS as applicable to Non-Banking Financial Company (NBFC) to a company whose registration with the Reserve Bank of India (RBI) is awaited;
• Disclosure of operating profit on the face of statement of profit and loss in accordance with Ind AS Base Schedule III;
• Recognition of gain/loss on renegotiation of borrowings subsequent to the year-end;
• Accounting treatment of partial deemed disposal in separate financial statements of parent and in consolidated financial statements (CFS);
• Disclosure of foreign currency risk on availing the option under paragraph D13AA of Ind AS 101;
• Accounting treatment of DDT in the CFS in case of partly owned subsidiary in various scenarios;
• Computation of financial liability (debt portion) in case of compulsorily convertible debentures which are convertible after 10 years.

For more information, click here.

ED on Appendix C, Uncertainty over Income Tax Treatments to Ind AS 12, Income Taxes- 19 January 2018

The Institute of Chartered Accountants of India (ICAI) has issued an Exposure Draft (ED) of Appendix C, Uncertainty over Income Tax Treatments to Ind AS 12 ‘Income Taxes’ which clarifies how to apply the recognition and measurement requirements in Ind AS 12 when there is uncertainty over income tax treatments.
Comments are to be received by 19 February 2018.

For more information, click here.

Auditing News

SA 720 (Revised) The Auditor’s Responsibilities Relating to Other Information- 22 January 2018

The ICAI has issued the Revised Standard on Auditing (SA) 720 - The Auditor’s Responsibilities Relating to Other Information which deals with the auditor’s responsibilities relating to other information, whether financial or non-financial information included in an entity’s annual report.
This SA is effective for audits of financial statements for periods beginning on or after 1 April 2018.

For more information, click here.

Regulatory News

The Insolvency and Bankruptcy Code (Amendment) Act, 2018 - 19 January 2018

The Insolvency and Bankruptcy Code, 2016 has been amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2018 wherein certain additions and modifications have been made. Some of the areas which underwent modifications are as follows:

• Section 2 “Application of Code”;
• Section 5 “Definitions”;
• Section 25 “Duties of resolution professional”;
• Section 30 “Submission of resolution plan”;
• Section 35 “Powers and duties of liquidator”;
• Section 240 “Power to make regulations.

Further, two new sections have also been incorporated in the amended code i.e. section 29A “Persons not eligible to be resolution applicant” and section 235A “Punishment where no specific penalty or punishment is provided”.

For more information, click here.

Further GST Updates

The Central Board of excise and Customs has issued certain updates w.r.t. Goods and Services Tax (GST) whose links are as follows:

• For information w.r.t. recommendations made during the 25th meeting of the GST Council held in New Delhi on 18 January 2018 Policy Changes, click here;
• For information w.r.t. recommendations for changes in GST/Integrated GST Rate and Clarifications in respect of GST Rate on Certain Goods, click here;
• For information w.r.t. decisions relating to Services in the 25th meeting of GST Council held at New Delhi on 18 January 2018, click here;
• For information w.r.t. extension of the last date for filing FORM GSTR-3B for December, 2017 till 22 January 2018, click here;
• For the GST (Compensation to States) Amendment Act, 2017, click here.