The weekly messenger | Edition 08.17
This newsletter is a weekly compilation of accounting, auditing and related regulatory news from different accounting and regulatory bodies in India and overseas.
Accounting Updates
ASB issues new going concern auditing standard – 22 February 2017
The American Institute of Certified Public Accountants (AICPA) Auditing Standard Board (ASB) has issued a statement on Auditing Standards (SAS) No. 132 “The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern”. This SAS addresses the auditor’s responsibilities in the audit of the financial statements (FS) relating to the entity’s ability to continue as a going concern and the implications for the auditor’s report. This SAS is applicable to all audits of a complete set of FS, regardless of the fact that whether such FS are prepared in accordance with general purpose or a special purpose framework.
This SAS will become effective for the audits of FS for periods ending on or after 15 December 2017 and reviews of interim periods beginning after fiscal years ending on or after 15 December 2017.
Further, this SAS will supersede the SAS no. 126 of the same title.
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FASB clarifies scope of asset derecognition guidance – 23 February 2017
The Financial Accounting Standards Board (FASB) has issued an accounting standard update (ASU) on ‘Other-Income – Gains and Losses from the Derecognition of Nonfinancial Assets’ in which it has clarified the scope of asset derecognition guidance and added guidance with respect to accounting for partial sales of non-financial Assets.
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Regulatory Updates
Clarification on Section 391(2) Closure of place of business by a Foreign Company – 22 February 2017
The Ministry of Corporate Affairs (MCA) has provided clarification with respect to section 391(2) of the Companies Act, 2013 (the Act) which relates to the applicability of provisions of Chapter XX “Winding Up” in case of closure of the place of business of a foreign company in India. Here, the MCA has clarified that the section 391(2) would be applicable only in case of a foreign company which has issued prospectus or Indian Depository Receipts (IDRs) pursuant to the provisions of Chapter XXII ‘Companies Incorporated Outside India’ of the Act.
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