The weekly messenger | Edition 15.20

Accounting News

FASB issues Staff Q&A Document on Hedge Accounting during COVID-19 Pandemic- 28 April 2020

The Financial Accounting Standards Board (FASB) has issued a question and answer (Q&A) document, providing responses to frequently asked questions (FAQs) about the disruptive effects of COVID-19 on cash flow hedge accounting.  
 
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ICAI issues Concept Paper on All About Fair Value – 1 May 2020

Considering the importance of the concept of Fair Value and its various aspects, the Institute of Chartered Accountants of India (ICAI) has brought a Concept Paper on ‘All about Fair Value’ which highlights the various key aspects of Fair Value as per Ind AS 113; Consideration for determination of value based on highest and best use, where the highest and best use is different from the existing use; factors influencing Fair Value and Relevance of Exit Price in Fair Value.
 
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Auditing News

Communication with the Retiring Auditor through E-mail - 1 May 2020

Due to the ongoing lockdown, members have raised concerns that it is not possible for the Incoming Auditor to communicate with the Retiring Auditor through the mode(s) of communication permissible in terms of provisions of Code of Ethics (i.e. communication by a letter sent “Registered Acknowledgement due” or by hand against a written acknowledgement).
 
Therefore, the ICAI has decided that members may communicate with the Retiring Auditor vide E-mail, provided an acknowledgement of such communication is received from the Retiring Auditor’s E-mail address registered with the Institute or his last known official E-mail address.
 
For more information, click here. 

Regulatory News

Companies (Appointment and Qualification of Directors) Second Amendment Rules 2020 – 29 April 2020

The Ministry of Corporate Affairs (MCA) has amended the Companies (Appointment and Qualification of Directors) Rules, 2014 with the Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2020, wherein it has made certain changes in clause (a) of sub-rule (1) of Rule 6 ‘Compliances required by a person eligible and willing to be appointed as an independent director’ of the aforesaid Rules.
 
As per the Amendment Rules, the time lines within which the independent director in a company has to apply online to the institute for inclusion of his name in the data bank, has been revised from ‘five months’ to ‘seven months’ from the commencement of Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 i.e. 1 December 2019.
 
These Rules shall come into force w.e.f. 29 April 2020.
 
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Extension of last date of filing of Form NFRA-2 – 30 April 2020

The MCA has decided to extend the timelines for filing of Form NFRA 2 for the reporting period Financial Year 2018-19 by further 2 months, which is now 210 days (earlier 150 days) from the date of deployment of the said form on the website of National Financial Reporting Authority (NFRA) i.e. 9 December 2019.
 
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SEBI Notification on COVID-19 - 3 May 2020

The Securities and Exchange Board of India (SEBI), vide its notification dated 24 March 2020 and 15 April 2020, had informed about the Ministry of Home Affairs Order dated 24 March 2020 and 15 April 2020, which stated that for the purpose of containment of COVID-19 Epidemic in the country, all the commercial and private establishment shall be closed down during the lockdown but that the capital and debt market service as notified by the SEBI shall be exempted from such closures.
 
Accordingly, SEBI had provided the list of the various exempted entities such as Recognised Stock Exchanges; Recognised Clearing Corporations; Mutual Funds; Asset Management Companies etc.
 
Now, due to the further extension of the lock down for two more weeks, the SEBI has again issued a Notification, which states that the erstwhile notification dated 15 April 2020, will continue to remain in force for two more weeks w.e.f. 4 May 2020.
 
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RBI extends the timelines for submission of Regulatory Returns by banks – 30 April 2020

Considering the disruptions on account of COVID-19 pandemic, the Reserve Bank of India (RBI) has decided to extend the timelines for submission of regulatory returns to be submitted by Scheduled Commercial Banks, Payment Banks and Local Area Banks, All India Financial Institutions, All Co-operative Banks, by 30 days from the due date.
 
However, it may be noted that there is no relaxation with respect to the timelines for submission of statutory returns i.e. returns prescribed under the Banking Regulation Act, 1949, RBI Act, 1934 or any other Act (for instance, returns related to CRR/SLR).
 
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Regulatory Measures introduced by SEBI to continue in view of ongoing uncertainty – 20 April 2020

In view of the uncertainty observed in the recent past due to concerns relating to COVID-19 pandemic and the resultant fear of economic slowdown, SEBI vide its Press Release dated 20 March 2020 had introduced various regulatory measures for a period of one month w.e.f. 23 March 2020. The objective of issuing those measures was to ensure orderly trading and settlement, effective risk management, price discovery and maintenance of market integrity.
 
Now, the SEBI has decided that the aforesaid regulatory measures, which were implemented w.e.f. 23 March 2020 will continue to remain in force till 28 May 2020.
 
For more information, click here. 

CBDT further defers the applicability of clause 30C and 44 of Revised Form 3CD – 24 April 2020

The Central Board of Direct Taxes (CBDT) has further deferred the applicability of the clause 30C (pertaining to General Anti – Avoidance Rules (GAAR) {Impermissible Avoidance Arrangements- As mentioned in Form 3CD}) and clause 44 (pertaining to Goods and Services Tax (GST)) of the Revised Form 3CD by one year, thereby keeping them both in abeyance till 31 March 2021.
 
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EPFO makes filing of ECR easier for business – 30 April 2020

Considering the current scenario due to COVID-19, wherein the businesses and enterprises are not able to pay their statutory dues due to liquidity/cash crunch, the Employee Provident Fund Organisation (EPFO) has decided to ease the compliance procedure under EPF & MP Act, 1952, wherein the filing of monthly Electronic-Challan cum Return (ECR) has been separated from Payment of the statutory contributions reported in the ECR.
This means that ECR can now onwards be filed by an employer without the need of simultaneous payment of contributions and contributions may be paid later by the employer after filing the ECR.
For more information, click here.