The weekly messenger | Edition 07.18

Accounting News

Compendium of ITFG Clarification Bulletins – 9 February 2018

The Institute of Chartered Accountants of India has issued the Compendium of Indian Accounting Standards (Ind AS) Transition Facilitation Group (ITFG) clarification Bulletins. The purpose of issuing this publication is to bring all the issues clarified through 14 ITFG Clarification Bulletins at one place for ease of reference of the members and other stakeholders.

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 IASB issues narrow scope amendments to pension accounting – 5 February 2018

The International Accounting Standard Board (IASB) has issued the Plan Amendment, Curtailment or Settlement (Amendments to International Accounting Standard (IAS) 19 Employee Benefits). As per IAS 19, when a change to a plan—an amendment, curtailment or settlement—takes place, it requires a company to remeasure its net defined benefit liability or asset. Now, as per the amendment, a company is required to use the updated assumptions from this remeasurement to determine current service cost and net interest for the remainder of the reporting period after the change to the plan.
These amendments would become effective on or after 1 January 2019.

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 Regulatory News

Designation of Special Court- 5 February 2018

The Central Government (CG), with the concurrence of the Chief Justices of the High Courts of Kerala, Orissa and Gauhati, has designated the following courts as mentioned in column (1) the Table below as Special Courts for the purposes of providing speedy trial of offences punishable with imprisonment of two years or more under the said sub-section.

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Exemption to Government Companies under section 129(6) of Companies Act, 2013 from recognizing DTA/ DTL under AS-22/Ind AS-12 - 6 February 2018

The CG has notified that the provisions of Accounting Standard (AS) 22 or Ind AS 12 w.r.t. deferred tax asset (DTA) or deferred tax liability (DTL) shall not apply, for seven years w.e.f. 1 April, 2017, to a Government company which:

• is a public financial institution under sub-clause (iv) of clause (72) of section 2 of the Companies Act, 2013;
• is a Non - Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI) u/s 45-IA of the RBI Act, 1934; and
• is engaged in the business of infrastructure finance leasing with not less than seventy five per cent of its total revenue being generated from such business with Government companies or other entities owned or controlled by Government.

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Corrigendum to Order of Constitution of Insolvency Law Committee- 6 February 2018

The Ministry of Corporate Affairs (MCA) vide its order no. 35/14/2017 dated 16 November 2017 has constituted the Insolvency Law Committee to examine the suggestions received and related matters regarding the provisions of Insolvency and Bankruptcy Code, 2016. Now, the MCA has issued a corrigendum to the aforesaid order in order to correct the inadvertent error in Para 6 as per which earlier the Committee was required submit its recommendations within two months from its first meeting. Now, this time period of two months has been changed to three months i.e. the Committee is now required to submit its suggestions within three months from its first meeting instead of two months.

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Changes and Disclosure in Total Expense Ratio – 5 February 2018

The Securities and Exchange Board of India (SEBI) has observed that there are frequent changes which are being carried out in Total Expense Ratio (TER), however, the same are not being disclosed to the investors. Therefore, in order to bring uniformity in disclosure of actual TER charged to mutual fund schemes and to enable the investor to take informed decision, the SEBI has decided the following:
• All Asset Management Companies (AMCs) shall disclose the TER of all schemes on a daily basis under a Separate head – “ Total Expense Ratio of Mutual Fund Schemes” on their websites as per the format prescribed under Annexure A;
• Changes in TER base shall be communicated to investors of the scheme through notice via email or SMS before three working days prior to effecting such change and same shall be intimated to the Board of Directors of AMCs;
• The changes in TER shall also be placed before the Trustees on Quarterly basis.

This Circular shall become applicable on all the new schemes to be launched on or after the date of this circular and for all the existing schemes w.e.f. 1 March 2018.

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