The weekly messenger | Edition 31.18

Accounting News

FASB issues targeted improvements to lease standards – 6 August 2018

The Financial Accounting Standard Board (FASB), after receiving the inquiries from its stakeholders with respect to the below mentioned requirements in the new leases standard has issued an accounting standard update (ASU) which provides for certain amendments to the earlier issued Accounting Standards Codification:

• Comparative reporting requirements for initial adoption; and
• Separating the components of a contract in case of lessor.

 For more information, click here.

Auditing News

Report on Audit Quality Review (2017-18) of the Quality Review Board – 31 July 2018 

The Quality Review Board of the Institute of Chartered Accountants of India has issued the Report on Audit Quality Review which comprises of the key audit findings, its analysis and summary of the observations made by the reviewers in respect of the audit quality reviews conducted during the financial year 2017-18 with respect to the financial statements for the year ended on 31 March 2014 and 31 March 2015.

For more information, click here.

Regulatory News

Companies (Incorporation) Third Amendment Rules, 2018 – 27 July 2018

 The Central Government (CG) has amended the Companies (Incorporation) Rules, 2014 with the Companies (Incorporation) Third Amendment Rules, 2018 wherein, it has made the following changes:

• In explanation I to sub rule (1) of Rule 3 ‘One Person Company’ which defines the term ‘resident in India’ w.r.t. a person who is eligible to incorporate a One Person Company, earlier the stay of 182 or more days in India was to be checked in the immediately preceding one calendar year. However, now as per the amendment rules, the same has to be considered w.r.t. the immediately preceding financial year. Further, one more explanation i.e. explanation II has also been added to the aforesaid sub-rule as per which, while counting the number of days of a director, for the financial year 2018-19, the period of stay from 1 Jan 2018 till the notification of this rule shall also be considered for the calculation of the period of 182 days and;
• Rule 15, ‘Affidavit from subscribers and first directors’ of the principle rules has been substituted by a new rule i.e. ‘Declaration from subscribers and first directors’ wherein now the subscribers to the memorandum and the first directors are required to file a declaration in form No. INC-9 as against the earlier requirement, where they were required to file an affidavit in form No. INC-9 with the Registrar at the time of incorporation of the company.
• In Form No. INC-9, the word ‘Affidavit’has been replaced by the word ‘Declaration’;
• In list of attachments to be provided as per item no. 3 of the Form No. INC-32, (SPICe), the words and brackets ‘Affidavit and declaration by the first subscriber(s)’ have been replaced by the words and brackets ‘Declaration by first subscriber(s) and director(s)’.

These rules shall come into force on the date of their publication in the Official Gazette i.e. 27 July 2018.

For more information, click here.

Notification regarding commencement of certain sections of Companies (Amendment) Act, 2017 – 27 July 2018

The CG has appointed 27 July 2018 as the date from which the provisions of the following sections of the Companies (Amendment) Act, 2017 shall come into force:

• Section 5 i.e. Amendment of section 7 ‘Incorporation of company’ of the Companies Act 2013; and
• Section 6 i.e. Amendment of Section 12 ‘Registered Office of company’ of the Companies Act 2013

For more information, click here.

Companies (Accounts) Amendment Rules, 2018 – 31 July 2018

 The CG has amended the Companies (Accounts) Rules, 2014 with the Companies (Accounts) Amendment Rules, 2018, wherein it has made the following changes:

• In sub-rule (5) of Rule 8 ‘Matters to be included in Board’s Report’ which provides for the listing of information to be contained by the Board Report, two new clauses have been added as per which now the companies are also required to provide the following information in its board report:

1. a disclosure as to whether the maintenance of cost records as specified by CG u/s 148(1) of the Companies Act 2013 is required. If yes, whether such accounts and records have been made and maintained
2. a statement that the company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

• Further, a new sub-rule i.e. sub-rule 6 has also been inserted in the aforesaid rule 8 which states that the provisions of the said rule would not be applicable to One Person Company or Small company; and
• A new rule i.e. rule 8A ‘Matters to be included in Board’s Report for One Person Company and Small Company’ has also been added.

 These rules shall come into force on the date of their publication in the Official Gazette i.e. 31 July 2018.

 For more information, click here.

Further GST Updates

The Central Board of Indirect Taxes and Customs has issued certain updates w.r.t. Goods and Services Tax (GST) whose links are as follows: 

• For information w.r.t the extension of time limit for furnishing the return by an Input Service Distributor in form GSTR-6, click here;
• For information w.r.t the Applicability of GST on ambulance services provided to Government by private service providers under the National Health Mission (NHM), click here;
• For information w.r.t withdrawal of Circular No. 28/02/2018-GST dated 08.01.2018 as amended vide Corrigendum dated 18.01.2018 and Order No 02/2018–CT dated 31.03.2018 – reg., click here;
• For information w.r.t. refunds processed under GST during the refund fortnight, click here; and
• For information w.r.t. fraudulent Issuance of Input Tax Credit Invoices, click here.