The weekly messenger | Edition 13.17

Accounting News

ED on Transfers of Investment Property, Amendments to Ind AS 40, Investment property – 29 March 2017

The Institute of Chartered Accountants of India (ICAI) has issued an Exposure Draft (ED) of changes proposed in Indian Accounting Standard (Ind AS) 40, Investment Property, wherein certain modifications under the heading ‘Transfers of Investment Property’ and transitions provisions have been proposed to be incorporated.
Comments to be received by 28 April 2017.
For more information, click here

ED of Appendix B of Ind AS 21, Foreign Currency Transactions and Advance Consideration – 29 March 2017

ICAI has issued an ED of Appendix B on Ind AS 21, Foreign Currency Transactions and Advance consideration which addresses how to determine the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration in a foreign currency.
Comments to be received by 28 April 2017.
For more information, click here

ED on annual improvements to Ind AS – Amendments in Ind AS 112 and 28 – 29 March 2017

ICAI has issued an ED on annual improvements to Ind AS 112 ‘Disclosures of Interests in Other entities’ and Ind AS 28 ‘Investments in Associates and Joint Ventures’ corresponding to the annual improvements made to International Financial Reporting Standards (IFRS) 2014 -16 cycle issued by the International Accounting Standards Board (IASB). 
The topics addressed by these amendments are as follows:
 

 
Comments to be received by 28 April 2017.
For more information, click here

IASB publishes proposed improvements to IFRS 8 Operating Segments – 29 March 2017

IASB has proposed following improvements to IFRS 8 ‘Operating Segments’ in the ED that includes amendments:

• to clarify and emphasize the criteria that must be met before two operating segments may be aggregated;
• to require companies to disclose the title and role of the person or group that performs the function of the chief operating decision maker; and
• to require companies to provide information in the notes to the financial statements if segments in the financial statements differ from segments reported elsewhere in the annual report and in accompanying materials.

Comments to be received by 31 July 2017.
For more information, click here

Rules proposed for accounting method changes to reflect FASB revenue recognition standards – 30 March 2017

A notice has been issued inviting for comments on a proposed revenue procedure that, if finalised, will provide procedures by which a taxpayer may request consent to change a method of accounting for recognising income when the change is made for the same taxable year for which the taxpayer adopts the new financial accounting revenue recognition standards and the change is made as a result of, or directly related to, the adoption of the new revenue recognition standards (a qualifying same-year method change).
For more information, click here

ITFG Clarification Bulletin 7 – 31 March 2017

Ind AS Transition Facilitation Group (ITFG) of Ind AS (IFRS) Implementation Committee has been constituted to provide clarification on various issues related to applicability and/or implementation of Ind AS under the Companies (Ind AS) Rules, 2015, raised by preparers, users and other stakeholders Recently, ITFG has issued the seventh set of clarifications. This bulletin contains clarifications on following significant matters: 

• Availment of exemption given under Ind AS 101 for exchange gain/loss on amount of loan drawn after first Ind AS financial reporting period;
• Adjustment to carrying amount of PPE after opting for deemed cost exemption given under Ind AS 101;
• Continuation of same accounting policy for exchange differences to long term exchange contracts; and
• Classification of land from government on long – term lease basis as finance or operating lease etc.

For more information, click here

New Rules for accounting for amortisation of premiums for purchased callable debt securities – 31 March 2017

The Financial Accounting Standards Board (FASB) has issued an Accounting Standard Update in order to amend the amortisation period for certain purchased callable debt securities held at a premium. The Board has shortened the amortisation period for the premium to the earliest call date as against the practice being followed under the current generally accepted accounting principles wherein entities generally amortise the premium as an adjustment of yield over the contractual life of the instrument.
For more information, click here

Auditing News

ICAI has deferred the effective date/ applicability of SA 700 (Revised), SA 701, SA 705 (Revised) and SA 706 (Revised) – 1 April 2017

ICAI after considering the difficulties faced by the members with respect to the implementation of the below mentioned standards has deferred the applicability of the same by one year.

• SA 700 (Revised), “ Forming an Opinion and Reporting on Financial Statements”;
• SA 701, “Communicating Key Audit Matters in the Independent Auditor’s Report”;
• SA 705 (Revised), “Modifications to the Opinion in the Independent Auditor’s Report”; and
• SA 706 (Revised), “Emphasis of Matters Paragraph and Other Matters Paragraphs in the Independent Auditor’s Report”.

Now the said standards would become applicable for audits of financial statements for periods beginning on or after 1 April 2018 (instead of audits of financial statements for periods beginning on or after 1 April 2017).
However, existing SAs 700, 705 and 706 will continue to apply.
For more information, click here

Regulatory News

Exemption to certain enterprises under Competition Act, 2002 – 27 March 2017

The Central Government (CG) has exempted certain enterprises from provisions of section 5 of the Competition Act which relates to Combination for a period of 5 years from the date of this publication i.e. 27 March 2017.
For more information, click here 

CGST Bill, IGST Bill, UTGST Bill, GST Compensation Cess Bill introduced in Lok Sabha – 27 March 2017

The four GST Bills that would operationalise the rolling out of the Goods and Services Tax (GST) have been introduced in Lok Sabha.
For more information, click here

Companies (Meetings of Board and its Powers) Amendment Rules, 2017 – 30 March 2017

CG has amended Companies (Meetings of Board and its Powers) Rules 2014 by Companies (Meetings of Board and its Powers) Amendment Rules, 2017 wherein changes have been made in the limits prescribed for entering into contracts or arrangements with a related party which are subject to special resolutions.
For more information, click here

Amendments in Schedule III to the Companies Act, 2013 – 30 March 2017

CG has amended the Schedule III (Division I and Division II) of the Companies Act, 2013 wherein it has made it mandatory for every company to disclose the details of Specified Bank Notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016 in the manner given below:
 

 
For more information, click here

Companies (Audit and Auditors) Amendment Rules, 2017 – 30 March 2017

CG has amended Companies (Audit and Auditors) Rules, 2014 by Companies (Audit and Auditors) Rules, 2014 wherein clause (d) has been inserted after clause (c) in Rule 11 “Other Matters to be included in Auditor’s Report” as per which the auditors shall also be required to report as to whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in SBNs during the period from 8 November 2016 to 30 December 2016 and if so, whether these are in accordance with the books of accounts maintained by the company.
For more information, click here

Finance Act 2017 – 31 March 2017

The Finance Act received the assent of the President on the 31 March 2017 and is hereby published for general information.
For more information, click here

Information to be submitted as a part of the Annual Actuarial Valuation and Related Reports Submission – 31 March 2017

The Insurance Regulatory and Development Authority of India (IRDAI) has issued a circular stipulating the minimum information required to be submitted in respect of annual statutory valuation. This circular is applicable to all the registered life insurers and non-life insurers carrying on life insurance business in India.
This circular would be effective for all the actuarial statutory valuations starting with valuation conducted as on 31 March 2017.
For more information, please click the following links:
Life Insurers, click here;
Non-life Insurers, click here.

Report on Persistency rate and Renewal rate – 31 March 2017

IRDAI has decided to delink the submission of ‘Report on Persistency rate and Renewal rate’ along with the ‘Appointed Actuary’s Annual Report’.
This circular would become applicable from the immediate effect from the date of the publication i.e. 31 March 2017.
For more information, click here

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