The weekly messenger | Edition 10.22

Accounting News

FASB expands disclosures and improves accounting related to the Credit Losses Standard – 31 March 2022
 
The Financial Accounting Standards Board (FASB) has issued an Accounting Standards Update, which intends to improve the decision usefulness of information provided to investors about certain loan refinancings, restructurings, and write offs.
 
For more information, click here. 

Auditing News

Deferment of certain provisions of Volume-I of Revised Code of Ethics – 31 March 2022
 
The ICAI’s Revised 12th edition of Code of Ethics came into effect from 1 July 2020, except for the following provisions of Volume-I, which were deferred till further notification:

• Responding to Non-Compliance of Laws and Regulations (NOCLAR) [Sections 260 and 360]
• Fees - Relative Size [Paragraphs 410.3 to R410.6]
• Taxation Services to Audit Clients [Subsection 604].

Later, the ICAI has notified that the aforesaid provisions of the Code of Ethics would become applicable and effective from 1 April 2022.
Now, the ICAI has further deferred the applicability of aforesaid provisions for a period of six months i.e., till 30 September 2022.
 
For more information, click here.
 
Online Process for Formation of Networking of CA Firms Launched – 1 April 2022
 
The ICAI has launched the “Online Process for Formation of Networking of CA Firms”, as per the new guidelines approved by the Council last year.
 
For more information, click here.
 
Announcement on Guidance Note on CARO 2020 – 2 April 2022
 
The Ministry of Corporate Affairs (MCA) vide its notification dated February 2020 had issued the Companies (Auditor’s Report) Order, 2020 (CARO 2020). Consequently, in July 2020, the Institute of Chartered Accountants of India (ICAI) has issued the Guidance Note on CARO 2020.
 
Post that in March 2021, corresponding amendments along with some other disclosure requirements were brought out in Schedule III (Division I, Division II and Division III) to the Companies Act, 2013 by the MCA.
 
Now, the ICAI has issued an announcement stating that in light of the amendments being made in the Schedule III, a comprehensive revision of the Guidance Note on CARO 2020 is being initiated by AASB. In the meantime, the ICAI has advised its members to read CARO 2020 in conjunction with the corresponding amendments made in Schedule III to the Companies Act, 2013 for presentation and disclosure requirements stated therein and perform the audit procedures accordingly
 
For more information, click here. 

Regulatory News

Companies (Accounts) Second Amendment Rules, 2022 – 31 March 2022
The MCA has issued the Companies (Accounts) Second Amendment Rules, 2022, wherein the following amendments have been issued:

• Due date of provisions w.r.t. using an accounting software with a feature of Audit Trail has been extended by 1 year i.e., now the same needs to be complied from 1 April 2023.
• Further the due date for filing of form CSR 2 for the FY 2020-21 has also been extended from 31 March 2022 to 31 May 2022

For more information, click here.
 
Clarification on applicability of Regulation 23 of SEBI (LODR) Regulations, 2015 in relation to Related Party Transactions – 30 March 2022
 
The Securities and Exchange Board of India (SEBI) vide its SEBI (Listing Obligations and Disclosure Requirements) (LODR) (Sixth Amendment) Regulations, 2021, had issued certain amendments w.r.t. Related Party Transactions (RPTs) which inter-alia, includes enhancing the scope of related party, RPTs and the materiality threshold for seeking shareholder approval.
 
Now, the SEBI has issued certain clarifications and guidance for smooth implementation of the amended Regulation 23 of the LODR Regulations which inter-alia includes:

• There is no requirement for fresh approval from shareholders for an RPT that has already been approved by the audit committee and shareholders prior to 1 April 2022.
• The RPT that has been approved by the audit committee prior to 1 April 2022 and which continues beyond such date and becomes material as per the revised materiality threshold shall be placed before the shareholders in the first General Meeting held after 1 April 2022.
• Further, SEBI has reiterated that an RPT for which the audit committee has granted omnibus approval, shall continue to be placed before the shareholders if it is material in terms of Regulation 23(1) of the LODR Regulations

This Circular shall come into force with effect from 1 April 2022.
 
For more information, click here.
 
Extension of timelines for dispensing with physical documents and wet signature on the proposal form in respect of health insurance policies – 1 April 2022
 
The Insurance Regulatory and Development Authority of India (IRDAI) has extended the facilitation of dispensing with physical signatures and wet signature on proposal forms in respect of health insurance policies for a further period of six months i.e. up to the period 30 September 2022.
 For more information, click here.