The weekly messenger | Edition 46.18

Accounting News

IASB to propose one-year deferral of Insurance Contract Standard - 14 November 2018

 
The International Accounting Standards Board (IASB) has decided to propose the deferment of the effective date of International Financial Reporting Standard (IFRS) 17, ‘Insurance Contracts’ as well as temporary exemption for insurers to apply the financial instruments Standard IFRS 9 ‘Financial Instruments’ from 2021 to 2022, so that both IFRS 9 and IFRS 17 can be applied at the same time. However, the proposed deferral is subject to public consultation, which is expected next year. 
 
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The Financial Accounting Standard Board (FASB) has issued an Accounting Standard Update (ASU), thereby amending the transition requirements and scope of the credit losses standard issued in 2016 which are as follows:

• ASU has mitigated the transition complexity by requiring entities other than public business entities - including not-for-profit organizations and certain employee benefit plans - to implement it for fiscal years beginning after 15 December 2021, including interim periods within those fiscal years which aligns the implementation date for their annual financial statements with the implementation date for their interim financial statements.
• It also clarifies that receivables arising from operating leases are not within the scope of the credit losses standard, but rather, should be accounted for in accordance with the leases standard.

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Auditing News

IAASB seeks public comments on ED on Agreed-Upon Procedures - 15 November 2018

 
The International Auditing and Assurance Standards Board (IAASB) has issued an Exposure Draft (ED) on ISRS 4400 (Revised) ‘Agreed-Upon Procedures Engagements’, wherein it has proposed to enhance key concepts in the standard, including:

• The role of professional judgment in an AUP engagement;
• Disclosures relating to the practitioner’s independence or lack thereof;
• Guidance on appropriate or inappropriate terminology to describe procedures and findings in AUP reports;
• The use of a practitioner’s expert in an AUP engagement;
• Restrictions on the distribution and use of the AUP report.

 
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Regulatory News

Companies (Registered Valuers and Valuation) Fourth Amendments Rules, 2018 - 13 November 2018

The Central Government (CG) has amended the Companies (Registered Valuers and Valuation) Rules, 2017 with the Companies (Registered Valuers and Valuation) Fourth Amendment Rules, 2018 wherein it has made the following modifications:

• In Rule 1, the heading ‘Short title and commencement’ has been replaced with the heading ‘Short title, commencement and applicability’.
• Furthermore, a new sub rule i.e. sub-Rule (3) has been inserted in the aforesaid Rule 1 which provides that these rules shall be applicable for valuation in respect of any property, stocks, shares, debentures, securities or goodwill or any assets or net worth of a company or its liabilities under the provision of the Act or these rules;
• Annexure IV, ‘Indicative Matrix on requisite qualifications/experience in specified discipline’ has also  been substituted by a new Annexure IV, ‘Eligibility Qualification and Experience for Registration as Valuer’;
• Apart from the aforesaid changes, certain other cosmetic changes have been made in the below mentioned Rules:       

1. Rule 3 ‘Eligibility for registered valuers’
2. Rule 4 ‘Qualifications and experience’
3. Rule 10 ‘Functions of a Valuer’
4. Rule 11 ‘Transitional Arrangement’
5. Rule 12 ‘Eligibility for registered valuers organisations’ 

 
These rules shall come into force on the date of their publication in the official gazette i.e. 13 November 2018.
 
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National Financial Reporting Authority Rules, 2018 - 13 November 2018

 
The CG has issued the National Financial Reporting Authority (NFRA) Rules, 2018 which inter-alia includes:
 

• Classes of companies and bodies corporate which would be governed by the NFRA;
• Functions and duties of the NFRA;
• Annual Return;
• Recommendation of accounting and auditing standards;
• Monitoring and enforcing of compliance with accounting and auditing standards;
• Overseeing the quality of service and suggesting measures for improvement;
• Power to investigate;
• Disciplinary proceedings etc.

 
These rules shall come into force on the date of their publication in the official gazette i.e.  13 November 2018.
 
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The Secretary of the Ministry of Corporate Affairs has constituted a committee for finalizing the Business Responsibility Reporting (BRR) format for listed as well as unlisted companies based on BRR Framework of the updated National Voluntary Guidelines on the Social, Environmental and Economic Responsibilities of Business (NVGs).
 
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The Securities and Exchange Board of India (SEBI) has issued a circular w.r.t. ‘the disclosures regarding commodity risks by listed entities’ wherein the SEBI has mandated that the all the listed entities shall make disclosures regarding commodity price risk and hedging activities in the 'Corporate Governance Report' section of the annual report of a listed entity . 

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