The weekly messenger | Edition 45.18

Accounting News

FASB Improves Accounting for Collaborative Arrangements – 5 November 2018

The Financial Accounting Standards Board (FASB) has issued an Accounting Standards Update (ASU) No. 2018 -18, clarifying the interaction between Topic 808, ‘Collaborative Arrangements’ and Topic 606, ‘Revenue form contract with customer’. The ASU has amended Accounting Standards Codification (ASC) 808 to:

• Clarify that in the context of the unit of account, ASC 606 should apply in its entirety to certain transactions between collaborative arrangement participants. 
• Add ‘unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606.’ 
• Clarify that when a transaction is not directly related to sales to third parties, presentation of the transaction as revenue would be precluded if the collaborative participant counterparty is not a customer.

For more information, click here. 

Auditing News

Report of Committee of Experts on regulating Audit firms and the Network – 8 November 2018

 
The Committee of Experts which was constituted on 20 April 2018 pursuant to the directions of the Hon'ble Supreme Court in the matter of S. Sukumar versus The Secretary, Institute of Chartered Accountants of India to look into the regulating audit firms and the networks has submitted its report on ‘Regulating audit firms and the Networks’ to the government. The purpose of issuing this report is to provide the government with the findings and recommendations which aims to address the issues raised by the Supreme Court in its aforesaid judgement. The report inter-alia includes:

• Background comprising of methodology followed and structure of report; 
• Role of auditors and their regulation; 
• Global developments and best practices; 
• Issues, findings and recommendations; etc. 

For more information, click here. 

Regulatory News

The Companies (Amendment) Ordinance, 2018- 2 November 2018

The Ministry of Law and Justice, has amended the Companies Act (CA), 2013 once again, hereby referred to as the Companies (Amendment) Ordinance, 2018, thereby amending 31 sections of the CA 2013. The main objective of bringing out this Ordinance into force is to promote the ease of doing business as well as better corporate compliance. Some of the major sections which have undergone changes pursuant to the aforesaid Ordinance are:

• Section 2(41) - Changes in definition of Financial Year;
• Insertion of new Section 10A - Commencement of business, etc.;
• Section 12 - Registered office of a company; 
• Section 14 - Alteration of Articles;
• Section 77 – Duty to register charges, etc.;
• Section 90 – Register of significant beneficial owners in a company;
• Section 164 - Disqualifications for appointment of directors;
• Section 441 - Compounding of certain offences etc. 

For more information, click here.  
 

Notice inviting comments w.r.t. Amendments to CA, 2013 – 5 November 2018

 
The Ministry of Corporate Affairs (MCA) after examining the recommendations made by the ‘Committee to review the offences under the CA, 2013’ on the basis of which  the Companies (Amendment) Ordinance, 2018 has been promulgated, has noted that there are certain other amendments which are of urgent nature and would be required to strengthen the corporate governance and enforcement framework. Accordingly, the MCA formulated the list of such further amendments and is now seeking for the suggestions/ comments on such proposed amendments which are required to be submitted by 20 November 2018.
 
For more information, click here.

Standardised norms for transfer of securities in physical mode – 6 November 2018

 
The Securities and Exchange Board of India (SEBI), after considering the representations being received from transferees w.r.t. the difficulties being faced by them during the transfer of securities in physical mode, has put in place a standard framework for the transfer of securities in physical mode, wherein the SEBI has modified some of its existing procedures w.r.t. the same.
 
For more information, click here.
 

ECB Policy – Review of Minimum Average Maturity and Hedging Provisions – 6 November 2018   

 
The Reserve Bank of India, in consultation with the Government has decided to liberalise the rules governing the External Commercial Borrowings (ECB) for infrastructure firms both in terms of tenure as well as hedging requirements which are as follows:

• The minimum tenure for borrowing through the ECB route in the infrastructure space raised by the specific eligible borrowers has been reduced to 3 years from 5 years; and
• The minimum average maturity requirement of extant 10 years for availing exemption from mandatory hedging provisions for ECBs raised by the eligible borrowers in the infrastructure space has been reduced to extant 5 years. Accordingly, the ECBs with minimum average maturity period of 3 to 5 years in the infrastructure space will have to meet 100% mandatory hedging requirement. Further, it has been clarified that ECBs falling under the aforesaid revised provision but raised prior to the date of this circular will not be required to mandatorily roll-over their existing hedges.

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 more information w.r.t exemption from applicability of provisions relating to TDS for supply from PSU to PSU, click here;
• For more information w.r.t Circular clarifying collection of tax at source by Tea Board of India, click here; 
• For more information w.r.t scope of principal and agent relationship under Schedule I of Central GST Act, 2017 in the context of del - credre agent, click here; and

For more information w.r.t advisory to UIN entities claiming GST Refunds, click here