The weekly messenger | Edition 30.19

Accounting News

IFRS 9: Financial Instruments - A Study: Transition Impact on Banks Across the Globe – 29 July 2019

The Institute of Chartered Accountants of India (ICAI) has issued a publication on ‘IFRS 9 Transition Impact on Banks across the Globe’, basis the project that the ICAI has undertaken to evaluate the impact of worldwide implementation of IFRS 9. The purpose of issuing this publication is to provide valuable insights of the financial reporting reforms and to provide a guiding factor for banks and jurisdictions that will be transitioning to IFRS 9 or equivalent in the near future.
 
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FASB proposes clarifications to the Interaction between the Recognition and Measurement of Financial Instruments and the Accounting for Equity Method Investments - 30 July 2019

The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU), wherein it proposes to clarify the interaction between two of its accounting standards i.e. the standard on recognition and measurement of financial instruments and the standard on equity method investments.
Comments are to be provided by 29 August 2019.
 
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FASB proposes improvements Related to Distinguishing Liabilities from Equity – 31 July 2019

The FASB has also issued a proposed ASU, wherein it intends to improve guidance for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The proposed ASU would:

• reduce the number of accounting models for convertible debt instruments and convertible preferred stock;
• revise the derivatives scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events;
• improve and amend the related disclosure and earnings-per-share guidance.

Comments are to be provided by 14 October 2019.
 
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IASB proposes amendments to IFRS Standards to improve accounting policy disclosures – 1 August 2019

The International Accounting Standards Board (IASB) has proposed narrow-scope amendments to IAS 1 ‘Presentation of Financial Statements’ and IFRS Practice Statement 2 ‘Making Materiality Judgements’ in order to help companies provide useful accounting policy disclosures to users of financial statements, wherein the IASB is proposing to replace the requirement of disclosing ‘significant accounting policies’ with a requirement to disclose ‘material accounting policies’.
 
Comments are to be provided by 29 November 2019.
 
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Regulatory News

Extension of last date of filing Form BEN-2 under the Companies Act, 2013 – 29 July 2019

The Ministry of Corporate Affairs has extended the last date of filing e-form BEN – 2 ‘Return to the Registrar in respect of declaration under Section 90’ up to 30 September 2019.
 
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The Companies (Amendment) Act, 2019 – 31 July 2019

The Companies (Amendment) Act, 2019 got enacted on 31 July 2019, thereby replacing the Companies (Second) Amendment Ordinance, 2019 which was effective from 2 November 2018. However, apart from the provisions inserted by the aforesaid Ordinance, the Companies (Amendment) Act 2019, has also introduced certain additional amendments in the various sections of the Companies Act 2013, the listing of which is as follows:

• Section 26 ‘Matters to be stated in prospectus’;
• Section 29 ‘Public Offer of securities to be in dematerialized form’;
• Section 35 ‘Civil liability for mis-statements in prospectus’;
• Section 90 ‘Register of Significant Beneficial Owners in a Company’;
• Section 132 ‘Constitution of National Financial Reporting Authority’;
• Section 135 ‘Corporate Social Responsibility Statement’ etc.

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SEBI (ICDR) (Third Amendment) Regulations, 2019 – 29 July 2019

The Securities and Exchange Board of India (SEBI) has amended the SEBI (Issue of Capital and Disclosure Requirements (ICDR)) Regulations, 2018 with the SEBI (ICDR) (Third Amendment) Regulations, 2019, wherein the following changes have been made:

• A new definition of ‘SR Equity Shares’ has been added in Regulation 2 of the aforesaid Regulations, which states that SR equity shares means the equity shares of an issuer having superior voting rights compared to all other equity shares issued by that issuer;
• Consequential changes in other regulations due to introduction of the aforesaid term.

These Regulations shall come into force w.e.f. 29 July 2019.
 
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SEBI (LODR) (Fourth Amendment) Regulations, 2019 – 29 July 2019

The SEBI has also amended the SEBI (Listing Obligations and Disclosure Requirements (LODR)) Regulations, 2015 with the SEBI (LODR) (Fourth Amendment) Regulations, 2019, thereby amending various regulations. The amendments mainly pertain to compliances in relation to corporate governance provisions for listed entities which have issued shares with Superior Rights (SRs). Some of the changes are as follows:

• At least half of the board of directors of the listed entities which have outstanding SR equity shares shall comprise of independent directors;
• The audit committee of listed companies having outstanding SR equity shares shall comprise only of independent directors;
• At least two third of the Nomination and Remuneration Committee, Stakeholder Relationship Committee and Risk Management Committee of listed companies having outstanding SR equity shares shall comprise of independent directors etc.

These Regulations shall come into force w.e.f. 29 July 2019.
 
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RBI relaxes end-use stipulations under ECBs Framework for Corporates and NBFCs – 30 July 2019

The Reserve Bank of India (RBI) in consultation with the Government of India, has decided to relax the end - use restrictions relating to External Commercial Borrowings (ECBs) for working capital requirements, general corporate purposes and repayment of rupee loans. Consequently, eligible borrowers will now be allowed to raise following ECBS from lenders, except foreign branches/overseas subsidiaries of Indian Banks:

• ECBs with a minimum average maturity period of 10 years for working capital purposes and general corporate purposes. Borrowing for on-lending by NBFCs for the above maturity and end-uses is also permitted;
• ECBs with a minimum average maturity period of 7 years for repayment of Rupee loans availed domestically for capital expenditure. The borrowings for on-lending by NBFCs for the repayment of rupee loans would also be permitted.;
• Eligible corporate borrowers will now be allowed to avail ECB for repayment of Rupee loans availed domestically for capital expenditure in manufacturing and infrastructure sector and classified as SMA-2 or NPA, under any one-time settlement arrangement with lenders.

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