The weekly messenger | Edition 15.16

Accounting News

FASB simplifies financial reporting for income taxes – 24 October 2016

The Financial Accounting Standards Board (FASB) has issued this update to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Currently, Generally Accepted Accounting Principles (GAAP) prohibits entities from recognizing current and deferred income tax for an intra-entity transfer of an asset until the asset has been sold to an outside party. Now the board has decided that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs which will consequently eliminate the exception for an intra entity transfer of an asset other than inventory and will also align the recognition of income tax consequences for intra-entity transfers of assets other than inventory with International Financial Reporting Standards (IFRS).
 
For public business entities, the new guidance is applicable for annual reporting periods beginning after 15 December 2017 including interim periods within those annual reporting periods. For all other entities, it is applicable for annual reporting periods beginning after 15 December 2018 and interim reporting periods beginning after 15 December 2019. Early adoption is also permitted but with certain exceptions.
 
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FASB amends guidance for consolidating VIEs – 26 October 2016

The purpose of issuing this update is to amend the consolidation guidance on how a reporting entity that is the single decision maker of a variable interest entity (VIE) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE. A reporting entity has an indirect interest in a VIE if it has a direct interest in a related party that, in turn, has a direct interest in the VIE.
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FASB proposes technical correction to not-for-profit standard - 27 October 2016

FASB has proposed technical correction to not-for-profit (NFP) standard. The proposal would clarify the minimum requirements for the reconciliation that an NFP is required to disclose if it has endowment funds.
Comments are to be received by 11 November 2016
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Regulatory News

Formats for publishing Financial Results as required by SEBI (LODR Requirements) Regulations, 2015-25 October 2015

The Securities Exchange board of India (SEBI) through its circular no. CIR/CFD/CMD/15/2015 dated 30 November 2015 had provided formats for publishing financial results by listed companies. However, in July 2016 it had again issued a circular which specified that all the listed entities shall use the existing formats as prescribed in SEBI circular dated 30 November 2015 till the period ending 31 December 2016 and for the period ending on or after 31 March 2017 in the format as prescribed in Schedule III to the Companies Act, 2013 shall be used. However, it was mentioned that the banking and insurance companies are required to follow the formats as prescribed under the respective acts/regulations as specified by their regulators.

In view of above and the recent listing by insurance companies, IRDAI in consultation with SEBI has prescribed the following formats:

• Format for quarterly financial results
• Format for Reporting of Segment wise Revenue, Results and Capital Employed along with the quarterly results.
• Format for limited review reports to be given by the auditor
• Format for audit report to be given by the auditor in case of audited financial reports
• Format for publishing of financial results in newspaper in terms of regulation 47(1)(b) of LODR Regulations, 2015.

These formats are required to be followed by all the listed insurance companies (life and non life) for the quarters ending 30 September 2016 and 31 December 2016.
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Relaxation of additional fees and extension of last date of in filing AOC-4, AOC-4(XBRL), AOC-4 (CFS) and MGT-7 e-forms under the Companies Act,2013-27 October, 2016

Ministry of Corporate Affairs (MCA) has decided to extend the last date for filing of financial statements and annual returns using e-forms AOC-4, AOC-4(XBRL), AOC-4(CFS),or MGT-7 as the case may be till 29 November 2016 without payment of additional fees.
For more information, click here

Prohibition of Benami Property Transactions Act, 1988-28 October 2016

Benami Property Transactions Act, 1988 has been amended by the Benami Transactions (Prohibition) Amendment Act, 2016 (BTP Amendment Act). It shall come into force on 1 November 2016. The existing Act shall now be renamed as Prohibition of Benami Property Transactions Act, 1988 (PBPT Act) and it, inter-alia, includes:

• Definition and prohibition of  benami transactions
• Prohibition on recovery of the property held benami from benamidar by the real owner.
• Confiscation of properties held benami by the Government without payment of compensation.
• Management and disposal of confiscated property
• Appeals to appellate tribunal

For the press release, click here
For the notification, click here

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