The weekly messenger | Edition 31.21
This newsletter is a weekly compilation of accounting, auditing and related regulatory news from different accounting and regulatory bodies in India and overseas
Accounting news
FASB provides practical expedient to Private Companies that issue Equity-classified share-based awards ‒ 25 October 2021
The Financial Accounting Standards Board (FASB) has issued an Accounting Standards Update (ASU) to improve an area of financial reporting for private companies that issue equity-classified share-based awards.
The ASU provides private companies an option to elect a practical expedient to determine the current price input of equity-classified share-based awards issued as compensation using the reasonable application of a reasonable valuation method.
For more information, click here.
Auditing news
ICAI issues Report on Audit Quality Review - 2020-21 ‒ 2 November 2021
The Quality Review Board of the Institute of Chartered Accountants of India (ICAI) has issued the ‘Report on Audit Quality Review’ for the audit assignments conducted between the period 2016 to 2018. Quality review is a review which is directed towards evaluation of audit quality and adherence to various statutory and other regulatory requirements. It involves assessment of the work of auditors while carrying out their audit function so that Board is able to assess:
- the quality of audit and reporting by the Statutory Auditors; and
- the quality control framework adopted by the Statutory Auditors/ audit firms in conducting the audit.
This report includes the key findings, its analysis and summary of the observations made by the reviewers in the various review reports reviewed by them.
For more information, click here.
Regulatory news
Relaxations in paying additional fees in case of delay in filing Form 8 (the Statement of Account and Solvency) by LLPs ‒ 26 October 2021
Due to disruptions caused by COVID – 19 pandemic, the timeline for filing Form 8 (the Statement of Account and Solvency) by the Limited Liability Partnerships (LLPs) for the FY 2020-2021 has been extended till 30 December 2021.
For more information, click here.
Relaxation on levy of additional fees in filing of e-forms AOC-4, AOC-4 (CFS), AOC-4, AOC-4 XBRL AOC-4 Non-XBRL and MGT -7 / MGT -7A ‒ 29 October 2021
Considering the various representations received from the stakeholders, the Ministry of Corporate Affairs (MCA) has decided not to levy any additional fees on filing of e-forms AOC-4, AOC-4 (CFS), AOC-4 XBRL, AOC-4 Non-XBRL and MGT -7 / MGT -7A for the FY ended on 31 March 2021, if the same are filed up to 31 December 2021.
For more information, click here.
Further extension of last date of filing of Cost Audit Report to the Board of Directors ‒ 29 October 2021
The MCA vide its circular dated 27 September 2021 had extended the last date of submission of the Cost Audit Report for the FY 2020-21 by the cost auditor to the Board of Directors till 31 October 2021.
Now the aforesaid date has been further extended till 30 November 2021.
For more information, click here.
SOP on application filed under Regulation 37 of the Listing Regulations w.r.t. Scheme of Arrangements ‒ 1 November 2021
The Bombay Stock Exchange (BSE) has issued a Standard Operating Procedure (SOP) w.r.t. draft scheme of arrangement filed under Regulation 37 of Securities and Exchange Board of India (SEBI) Listing Obligation and Disclosure Requirements (LODR) Regulations, 2015 (Listing Regulations), which is to be followed by the listed entities. The SOP includes the following: -
- The Scheme of Arrangement seeking Stock Exchange’s NOC under regulation 37 of the Listing Regulations shall be submitted to the exchange within 15 working days of the board meeting approving the draft scheme of arrangement.
- In case of non-submission within 15 working days, the company is required to take a fresh approval from its board.
- At the time of submission of the application, the Audited financials of last 3 years (financials not being older than 6 months) of unlisted companies involved in the Scheme of Arrangement has to be submitted and the period under consideration for valuations, other than Income Approach, should not be older than 3 months.
For more information, click here.
SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2021 ‒ 1 November 2021
The SEBI has issued the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2021, wherein the following changes have been made in the Regulation 6 ‘Eligibility requirements for an initial public offer’:
- In sub-regulation (3), clause (ii) and its explanation have been substituted with the following:
- “(ii) the net worth of the SR shareholder, as determined by a Registered Valuer, shall not be more than rupees one thousand crore.
- Explanation: While determining the individual net worth of the SR shareholder, his investment/ shareholding in other listed companies shall be considered but not that of his shareholding in the issuer company.”
- Further, clause (v) of the aforesaid sub-regulation has also been substituted with the following:
- “(v) the SR equity shares have been issued prior to the filing of draft red herring prospectus and held for a period of at least three months prior to the filing of the red herring prospectus;”
These Regulations shall come into force w.e.f. 26 October 2021.
For more information, click here.
Scale Based Regulation: A Revised Regulatory Framework for NBFCs ‒ 22 October 2021
The Reserve Bank of India (RBI) has issued a revised regulatory framework for Non-Banking Financial Companies (NBFCs) i.e. “Scale Based Regulatory framework for NBFCs” which encompasses different facets of regulation of NBFCs covering capital requirements, governance standards, prudential regulation, etc.
These guidelines shall be effective w.e.f 1 October 2022; however, the instructions relating to ceiling on IPO funding shall be effective w.e.f 1 April 2022.
For more information, click here.
CG notifies commencement date of provisions of Section 1 of the Employees’ State Insurance Act, 1948 ‒ 27 October 2021
The Central Government (CG) has appointed 1 November 2021, as the date from which the provisions of the following sections of the Employees’ State Insurance Act, 1948 shall come into force in all areas of Ahmednagar, Jalna and Yavatmal district, in the State of Maharashtra:
- Sections 38, 39, 40, 41, 42, 43 and Sections 45A to 45H of Chapter IV;
- Sections 46 to 73 of Chapter V; and
- Sections 74, 75, sub-sections (2) to (4) of section 76, 80, 82 and 83 of Chapter VI.
For more information, click here.