The weekly messenger | Edition 18.16

Accounting News

IASB decides on IFRS 17 effective date – 16 November 2016

International Accounting Standards Board (IASB) has voted the effective date of IFRS 17 “Insurance Contracts” to be 1 January 2021.However, an entity may apply IFRS 17 before 1 January 2021; however, it cannot be applied until it applies IFRS 9 “Financial Instruments” and IFRS 15 “Revenue from Contracts with Customers”.

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FASB seeks uniformity in reporting on restricted cash – 17 November 2016

Financial Accounting Standards Board (FASB) has recently issued an update on Reporting of restricted cash under Cash Flow Statement. Currently no specific guidance exist in generally accepted accounting principles (GAAP) for cash flow classification and presentation of changes in restricted cash and cash equivalents as a result of which diverse practices are being followed by various entities . This update has been issued in order to provide clarification on those areas where GAAP is either unclear or lacking in specific guidance.

This amendment will become applicable for public business entities for fiscal years beginning after 15 December 2017 and interim periods within those fiscal years and for all other entities for fiscal years beginning after 15 December 2018 and interim periods within fiscal years beginning after 15 December 2019.

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FASB aims for consistency in modification accounting for share based payment – 18 November 2016

FASB has issued a proposed update in which it has provided specific guidance on when to apply modification accounting. The purpose of issuing this update is to provide clarity and reduce diversity in practice, as well as to reduce cost and complexity, when applying the guidance in Topic 718, Compensation—Stock Compensation, about a change to the terms or conditions of a share-based payment award. The amendments in this proposed update would be applied prospectively on the awards modified on or after the effective date which is yet to be determined by the Board.

Comments to be received by 6 January 2017.

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Regulatory News

Amendment of Schedule II to the Companies Act, 2013 – 17 November 2016

Currently, Schedule II suggests that with respect to intangible assets, the companies are required to apply the provisions of applicable accounting standards. This guidance has been now amended to state that the Ind AS or existing  accounting standards would be apply to the entity, whichever is applicable.

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