The weekly messenger | Edition 31.22

Accounting News

IASB amends accounting standard to improve information about long-term debt with covenants – 31 October 2022

The International Accounting Standards Board (IASB) has issued amendments to IAS 1 ‘Presentation of Financial Statements’ that aims to improve the information companies provide about long-term debt with covenants.

The amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, the amendments require a company to disclose information about these covenants in the notes to the financial statements.

The amendments are effective for reporting periods beginning on or after 1 January 2024, however early adoption is permitted.

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Auditing News

QRB report on audit quality review – 2021-22 – 2 November 2022

The Quality Review Board (QRB) of the Institute of Chartered Accountants of India (ICAI) has issued the ‘Report on Audit Quality Review’ for the audit assignments conducted between the periods 2015 to 2019. 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

GN on Report under Section 92E of the Income-Tax Act, 1961 (Transfer Pricing) (Revised 2022) – 25 October 2022

The ICAI has issued the revised version of its Guidance Note (GN) on Report under Section 92E of the Income-tax Act, 1961 (Transfer Pricing), based on the changes brought in by the Finance Act, 2022.

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Compilation of Informal Guidance relating to SEBI (PIT) Regulations, 2015 for the period October 2015 - September 2022 – 25 October 2022

The Securities Exchange Board of India (SEBI) has released the Compilation of Informal Guidance w.r.t. the SEBI (Prohibition of Insider Training) (PIT) Regulations, 2015, which includes the informal guidance issued relating to the aforesaid Regulations during the period 14 October 2015 to 30 September 2022.

For more information, click here.

Reduction in denomination for debt securities and non-convertible redeemable preference shares – 28 October 2022

The SEBI has made certain revisions in Chapter V of its ‘Operational Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper’ issued in August 2021, wherein the SEBI has reduced the face value of debt security or non-convertible redeemable preference share issued on private placement basis to Rs 1 lakh as against the existing requirement of Rs 10 lakh.

The new provisions would be applicable to all issues of debt securities and non-convertible redeemable preference  shares, on  private  placement  basis, through  new ISINs, on or after 1 January 2023.

However, with respect to a shelf placement memorandum which is valid as on 1 January 2023, the issuer thereof will have the option while raising funds through tranche placement memorandum, to keep the face value at Rs.10 lakh or Rs.1 Lakh. Necessary addendum shall be issued by such issuer to the shelf placement memorandum.

For more information, click here.