The weekly messenger | Edition 08.19

Accounting News

FASB issues proposal and invitation to comment on recognising and measuring deferred revenue in business combinations – 14 February 2019

The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standard Update (ASU) and an Invitation to Comment (ITC) on the recognition and measurement of deferred revenue in business combinations. As per the proposed ASU, now an entity would be required to recognise a liability assumed in a business combination from a contract with customer, if that liability represents an unsatisfied performance obligation for which the acquiree has received consideration from the customer. On the other hand, the ITC has been issued to obtain feedback on measurement and two other issues related to acquiring contracts in business combinations which are as under:

• Payment terms and their effect on the subsequent revenue recognised;
•  Costs to fulfil a performance obligation in measuring the fair value of a contract liability for a revenue contract.

Comments on ASU and ITC are to be received by 30 April 2019.
For more information, click here.  

Auditing News

Using Information Available at Information Utility Platform for External Confirmations – 11 February 2019

The Institute of Chartered Accountants of India (ICAI) has recently received communication w.r.t. the external confirmations from the National Financial Reporting Authority (NFRA) regarding the  functions of National e – Governance Services Limited (NeSL) which has recently set up the ‘Information Utility’, which is designed as an institutional intervention that stores evidence of financial contracts to assist in stressed assets resolution and which might be useful for the auditors in obtaining audit evidence through external confirmations. Accordingly, the ICAI basis the aforesaid communication, is of the view that the information available at Information Utility platform would be highly useful in the audit process and will strengthen the audit opinion. Therefore, for the sake of the same, the ICAI has issued the following guidance for the benefit of the members:
 
‘Whenever, external confirmations are required as per the requirements of SA 505 - External Confirmations, auditors should seek external confirmations directly from the third parties (the confirming parties). Further, auditors are advised to use the information available at the Information Utility platform of National e-Governance Services Limited, as detailed in paragraph 3 above, as an additional source of external confirmations to strengthen the audit evidence’.
For more information, click here.

Regulatory News

Withdrawal of the Announcement regarding Clarification on Applicability of Rotation principles if a company ceases to fall under ambit of Rotation principles in subsequent years - 15 February 2019

The ICAI has withdrawn its announcement regarding clarification on the applicability of Rotation principles on a company as per Section 139 of the Companies Act 2013, where the company ceases to fall under the ambit of Rotation principles in subsequent years which was issued on 29 January 2019 with immediate effect.  
 
For more information, click here.
 

Mandatory to link Aadhaar – PAN by 31 March 2019 to File Income Tax Return – 14 February 2019

The Central Board of Direct Taxes basis the Supreme Court’s Order issued on 6 February 2019, has issued a clarification wherein it has stated that Aadhaar – Permanent Account Number (PAN) linking is now been made mandatory for those filing an Income Tax Return and the procedure for the same has to be completed by 31 March of this year.
For more information, click here.