The weekly messenger | Edition 09.23

Accounting news

Companies (Indian Accounting Standards) Amendment Rules, 2023 – 31 March 2023

The Ministry of Corporate Affairs has issued the Companies (Indian Accounting Standards) Amendment Rules,2023, wherein the following key changes have been made:

• As per Ind AS 1 ‘Presentation of Financial Statements’, the Companies would now be required to disclose ‘material accounting policies’ instead of ‘significant accounting policies’. As per the amended standard, accounting policy information would be considered as material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions of primary users of general-purpose financial statements make on the basis of those financial statements.

• In Ind AS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’, the definition of ‘change in account estimate’ has been substituted with the revised definition of ‘accounting estimate’. As per the revised definition, “accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty”.

• In Ind AS 12 ‘Income Taxes’, it has been clarified that in cases of transactions where equal amounts of assets and liabilities are recognized on initial recognition, the initial recognition exemption will not apply.

• Consequential changes have also been made in various other standards.

These Rules shall come into force w.e.f. 1 April 2023.

For more information, click here.

Auditing News

Acceptance of certain assignments by the Concurrent Auditor of Bank Branches – 9 April 2023

The Ethical Standards Board of the ICAI has issued certain clarifications w.r.t. ‘Acceptance of certain assignments by the Concurrent Auditor of Bank Branches’, wherein it has clarified the following matters:

• The concurrent Auditor of a Branch can undertake the assignment of Long form Audit Report (LFAR) only w.r.t. Branches which are not subject to Statutory Audit. For Branches which are subject to Statutory Audit, the LFAR assignment can be undertaken by the Statutory Auditors only.

• The concurrent auditor/Internal Auditor may undertake the assignment of certification for a Bank branch only if the certificates are addressed to the Bank's management i.e., not addressed to the statutory auditor/a regulator/ without being addressed to anyone in particular.

• The Concurrent Auditor/ Internal Auditor can neither perform Statutory Audit of the financial statements of a Bank Branch, nor certify them as audited financial statements.

For more information, click here.

Regulatory news

Technical Guide on Disclosure and Reporting of KPIs in Offer Documents – 6 April 2023

The Securities and Exchange Board of India (SEBI) (Issue of Capital and Disclosure Requirements) Regulations, 2018 (‘ICDR Regulations’) issued by the SEBI mandates the disclosure of Key Performance Indicators (KPIs) in the offer document by the Issuer Company under heading ‘Basis for Issue Price’. These Regulations further require that the KPIs disclosed in the offer document shall be approved by the Audit Committee of the Issuer Company and before such disclosure also certified by the Statutory auditor(s) or Chartered Accountants or firm of Chartered Accountants amongst others.

Now, in order to help the members to report on the KPIs in accordance with the ICDR Regulations, the Auditing and Assurance Standards Board (AASB) of the ICAI has issued the ‘Technical Guide on Disclosure and Reporting of Key Performance Indicators (KPIs) in Offer Documents’.

For more information, click here.

Master Circular – Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to advances – 1 April 2023

The Reserve Bank of India has issued a ‘Master Circular on Prudential Norms on Income Recognition, Asset Classification, and Provisioning pertaining to Advances’, thereby consolidating all instructions on the aforesaid matter issued up to 31 March 2023.

For more information, click here.