The weekly messenger | Edition 26.19

Accounting News

IASB issues proposed amendments to IFRS 17 – 26 June 2019

The International Accounting Standards Board (IASB) has issued an Exposure Draft (ED) on ‘Amendments to IFRS 17’ in order to address the concerns and implementation challenges that were identified after IFRS 17 ‘Insurance Contracts’ was published in 2017. Some of the major suggested changes are as follows:

• Deferment of date of initial application of IFRS 17 by one year which means it would now be applicable on annual periods beginning on or after 1 January 2022;
• Additional optional scope exclusion for loan contracts that transfer significant insurance risk and related transition requirements to enable entities issuing such contracts to account for those contracts applying either IFRS 17 or IFRS 9;
• Amendments regarding allocation, recognition, assessment of the recoverability, and disclosure regarding insurance acquisition cash flows relating to expected contract renewals;
• Simplified presentation of insurance contracts in the statement of financial position so that entities would present insurance contract assets and liabilities in the statement of financial position determined using portfolios of insurance contracts rather than groups of insurance contracts etc.

Comments are to be provided by 25 September 2019.
 
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FASB Proposes Narrow – Scope Improvements to Credit Losses Standard – 27 June 2019

The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU) that would address issues raised by stakeholders during the implementation of ASU No. 2016-13, ‘Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments’. The amendments in this proposed ASU would affect various topics in the codification such as:

• Negative Allowance for Purchased Financial Assets with Credit Deterioration;
• Transition Relief for Troubled Debt Restructurings;
• Disclosures Related to Accrued Interest Receivables;
• Financial Assets Secured by Collateral Maintenance Provisions;
• Conforming Amendment to Subtopic 805-20.

Comments are to be provided by 29 July 2019.
 
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ITFG Clarification Bulletin 20 – 27 June 2019

 
The Indian Accounting Standards (Ind AS) Technical 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 twentieth set of clarifications. This bulletin contains clarifications on following significant matters:

• Presentation of foreign exchange difference w.r.t. Financial Instruments measured at Fair Value through Profit or Loss (FVTPL);
• Clarification on consolidation of subsidiaries in case of investment entities;
• Accounting Treatment of accumulated arrears of cumulative preference dividend as on the transition date;
• Accounting treatment to be followed by investor w.r.t. demerger transaction;
• How should an investor deal with a situation when its associate (an overseas entity) follows specific accounting policies /estimates prescribed by their local regulators while applying equity method.

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Clarification on Auditor’s Certificate on Return of Deposits pursuant to Rule 16 of the Companies (Acceptance of Deposits) Rules, 2014 – 25 June 2019

The Institute of Chartered Accountants of India (ICAI) has issued a clarification, wherein it has provided that the Ministry of Corporate Affairs in its letter dated 24 June 2019 has provided a clarification with respect to the following matters in respect of Form DPT-3:

• Auditor’s Certificate is mandatory only in case of return of deposits;
• For filing particulars of transactions not considered as deposits information contained therein as on 31st March of that year need not be from the duly audited Financial Statement;
• Only in case of Return of Deposit information contained therein as on 31st March of that year should be from duly audited financial statement of the company. 

Regulatory News

SEBI Board Meeting – 27 June 2019

The Securities and Exchange Board of India (SEBI) has took various decisions in its meeting held on 27 June 2019 with respect to the following:

• Framework for Issuance of Differential Voting Rights (DVR) Shares;
• Amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 w.r.t. payment relating to royalty and brand usage;
• Disclosure of Encumbrances;
• Review of Risk Management Framework of Liquid Funds, Investment Norms and Valuation of Money Market and Debt Securities by Mutual Fund;
• Amendments to SEBI (Prohibition of Insider Trading) Regulations;
• SEBI Annual Report: 2018-19.

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Annual Return on Foreign Liabilities and Assets Reporting by Indian Companies – 28 June 2019

The Reserve Bank of India (RBI) has made certain changes with respect to the filing process of Annual Return on Foreign Liabilities and Assets which is to be filed by all Indian companies which have received Foreign Direct Investment (FDI) and/or made FDI abroad, wherein the RBI has now provided a web – portal interface for the purpose of filing the aforesaid return as against the earlier requirement, wherein the return was filed through offline mode i.e. through e-mail.
 
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