The weekly messenger | Edition 42.17

Accounting News

ITFG Clarification Bulletin 12 - 23 October 2017

Indian Accounting Standards (Ind AS) Transition 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 twelfth set of clarifications. This bulletin contains clarifications on following significant matters:  

• Use of revaluation method under Ind AS 16 “Property, Plant and Equipment (PP&E)” instead of the cost model for some class of property in the first Ind AS financial statements;
• Adjustment of carrying amount of fixed assets as per previous generally accepted accounting principles (GAAP) to reflect the accounting treatment of the government grant as per Ind AS 20 “Accounting for Government Grants and Disclosures of Government Assistance”;
• Accounting Treatment of comfort letter provided by parent to its subsidiary;
• Accounting Treatment of prepayment premium of old loan and processing fees of new loan ;
• Accounting Treatment of unrealised profits in PP&E sold by parent to its subsidiary before transition to Ind AS at consolidated level;
• Applicability of Ind AS to a branch office of a foreign company established in India;
• Applicability of exemption given under paragraph B-10 of Ind AS 101 “First-time Adoption of Ind AS” in the subsequent period w.r.t below market rate of interest loan and deferment of liability payable to government on agreement basis;
• Impact of appointed date in case of merger on the certificate to be issued by the auditors on compliance of the scheme with Ind AS 103 “Business Combinations”;
• Applicability of Ind AS 109 “Financial Instruments”  to financial instruments acquired as a part of the business combination in case the  transferee company has opted for non-application of Ind AS 103 retrospectively to past business combinations;
• Adjustments arising due to application of other Ind AS to be made to the previous GAAP carrying amount on the date of transition, if exemption under Ind AS 101 has been availed;
• Valuation of the financial guarantee received as against a loan given to its associate in the opening Ind AS Balance sheet.

For more information, click here.

Auditing News

Exposure Draft on proposed revised definition of Internal Audit – 25 October 2017

The Internal Audit Standards Board of the Institute of Chartered Accountants of India has proposed a revised definition of internal audit which is as follows: “Internal audit provides independent assurance on effectiveness of internal controls, risk management processes and contributes to enhancing governance for achieving organizational objectives”. The revised definition also includes explanations of the key words used in the definition in order to provide additional clarity.

Comments are to be received by 25 November 2017.

For more information, click here.

Regulatory News

Notification for delegation of powers under Section 247 of CA 2013 – 23 October 2017

The Central Government (CG) has hereby delegated the powers and functions vested in it under section 247 ‘Valuation by registered valuers’ of the Companies Act (CA) 2013 to the Insolvency and Bankruptcy Board of India, subject to the condition that the CG may revoke such delegation of powers or it may exercise the powers under the said section if in its opinion such a course of action is necessary in the public interest.

This notification shall come into force w.e.f the date of its publication in the Official Gazette i.e. 23 October 2017.

For more information, click here.

Companies (removal of difficulties) 2nd order 2017 – 23 October 2017

The CG has issued the Companies (Removal of Difficulties) Second Order, 2017. The purpose of this order is to remove difficulty w.r.t. sub-section 1 of section 247 of the CA 2013 wherein the specification has been provided that the valuer shall have such qualification and experience and registered as a valuer, however, there is no reference w.r.t. the organisation to which the valuer may belong. Now for this purpose, in the section 247(1), the words, “a person having such qualifications and experience and registered as a valuer in such rnanner, on such terms and conditions as may be prescribed" have been substituted with the words "a person having such qualifications and experience, registered as a valuer and being a member of an organisation recognised in such manner, on such terms and conditions as may be prescribed".

This order shall come into force w.e.f 23 October 2017.

For more information, click here.

Relaxation of additional fees and extension of last date of filing of AOC-4 XBRL E-Forms using Ind AS under the CA, 2013 – 26 October 2017

The companies which are required to prepare or voluntarily preparing their financial statements in accordance with Companies (Ind AS) Rules, 2015 are required to file their financial statements in eXtensible Business Reporting Language (XBRL) Format. Now, the Ministry of Corporate Affairs (MCA) has clarified that since the development of tools necessary for deployment of the taxonomy for XBRL filing is expected to be completed by 28 February 2018.Therefore, it decided to extend the last date for filing AOC -4 XBRL for such companies for the FY 2016-17 without additional fees till 31 March 2018.

For more information, click here.

Relaxation of additional fees and extension of last date of filing AOC – 4 and AOC – 4 (XBRL non-Ind AS) under the CA 2013 – 27 October 2017

Keeping in view the requests received from various stakeholders, the MCA has extended the timelines for filing e-forms AOC – 4 and AOC – 4 (XBRL non-Ind AS) and the corresponding AOC-4 CFS e-forms up to 28 November 2017 without levying additional fees.

For more information, click here.

Further GST Updates

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

• For information on the Central Tax rate of 0.05% on intra-State supply of taxable goods by a registered supplier to a registered recipient for export subject to specified conditions, click here;
• For information on the Integrated Tax rate of 0.1% on inter-State supply of taxable goods by a registered supplier to a registered recipient for export subject to specified conditions, click here;
• For information on the Union Territory Tax Rate of 0.05% on inter-State supply of taxable goods by a registered supplier to a registered recipient for export subject to specified conditions, click here;
• For information on waiver of late fee payable for delayed filing of Form GSTR – 3B for August and September 2017, click here;
• For clarification on taxability of printing contracts, click here;
• For clarification on classification of cut pieces of fabric under GST, click here;
• For Central GST (Eleventh Amendment) Rules, 2017, click here;
• For information on extension of the due date for submission of details in FORM GST-ITC-01, click here;
• For information on extension of the due date for submission of details in FORM GST-ITC-04, click here;
• For information on amendment to Integrated Tax rate so as to exempt IGST on inter- state supply of services to Nepal and Bhutan against payment in INR, click here;
• For information on extension of the time limit  for intimation of details of stock in FORM GST CMP – 03, click here;
• For information on extension of the due date for submission of application in Form GST REG - 26, click here;
• For information on extension of the due date for submission of application in Form GST TRAN – 1 under Rule 117, click here;
• For information on extension of the due date for submission of application in Form GST TRAN – 1 under Rule 120 A, click here.

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