The weekly messenger | Edition 07.22

Accounting news

Compendium of Opinions - Volume XL (Part-I) – 8 February 2022

The Expert Advisory Committee (EAC) of the ICAI has issued 40^th  Volume of ‘Compendium of EAC Opinions (Part-I)’, comprising of opinions finalised by it during the period 12 February 2020 to July 2020. Some of the important matters on which the opinions have been provided includes:

• Recognition of non-convertible cumulative redeemable preference shares as borrowing and its measurement and disclosure requirements.

• Presentation and classification of dues recoverable from banks on account of bank guarantee.

• “Principal vs. Agent” classification under Ind AS 115.

• Non-recognition of deferred tax assets on provision for warranty, replacement, inventory and doubtful debts & claims.

For more information, click here.

IASB issues IFRS Accounting Taxonomy Update for Disclosure of Accounting Policies and Definition of Accounting Estimates − 15 February 2022

The International Accounting Standards Board (IASB) has issued an update to the IFRS Accounting Taxonomy to reflect the following amendments:

• Disclosure of Accounting Policies, issued in February 2021, which amended IAS 1 ‘Presentation of Financial Statements’ and IFRS Practice Statement 2 ‘Making Materiality Judgements’; and

• Definition of Accounting Estimates, issued in February 2021, which amended IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’.

For more information, click here.

Regulatory news

Relaxation on levy of additional fees in 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 − 14 February 2022

Considering the various requests received from the stakeholders, the Ministry of Corporate Affairs has further decided not to levy any additional fees on filing of following e-forms for the FY ended on 31 March 2021:

• AOC-4, AOC-4 (CFS), AOC-4 XBRL, AOC-4 non-XBRL, if the same are filed up to 15 March 2022 (Earlier it was 15 February 2022) and

• MGT -7 / MGT -7A, provided the same are filed up to 31 March 2022 (Earlier it was 28 February 2022).

For more information, click here.

Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances ‒ Clarification – 15 February 2022

The Reserve Bank of India (RBI) has issued certain clarifications w.r.t. ‘Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances’ issued vide its Circular dated 12 November 2021, which inter-alia includes:

• The definition of ‘out of order’, as clarified in the Circular, shall be applicable to all loan products being offered as an overdraft facility, including those not meant for business purposes and/or which entail interest repayments as the only credits.

• The ‘previous 90 days period’ for determination of ‘out of order’ status of a CC/OD account shall be inclusive of the day for which the day-end process is being run.

• In case of borrowers having more than one credit facility from a lending institution, loan accounts shall be upgraded from Non-Performing Asset (NPA) to standard asset category only upon repayment of entire arrears of interest and principal pertaining to all the credit facilities.

• The Circular does not make any changes to the requirements related to reporting of information to CRILC, which will continue to be governed in terms of extant instructions for respective entities.

• The Circular does not, in any way, interfere with the extant guidelines on implementation of Ind AS by Non-Banking Financial Companies (NBFCs).

For more information, click here.

Master Circular – Housing Finance – 18 February 2022

The RBI has issued the Master Circular on ‘Housing Finance’, thereby consolidating framework of rules and regulations and clarification on Housing Finance issued to banks by RBI up to 17 February 2022.

For more information, click here.

New Definition of Micro, Small and Medium Enterprises – Clarification – 18 February 2022

The Ministry of Micro, Small and Medium Enterprises (MSMEs) vide its notification dated 19 January 2022, had extended the validity of Entrepreneurs Memorandum (EM) Part-II and Udyog Aadhaar Memorandum (UAMs) from 31 March 2021 to 31 March 2022.

Now, on the similar grounds, the RBI has also amended its Circular dated 25 June 2021, wherein a change similar to the aforesaid notification has been made in the aforesaid Circular.

Further, it is also clarified that the validity of documents obtained in terms of RBI Circular dated 13 July 2017, for classification of MSMEs up to 30 June 2020, would also be valid up to 31 March 2022.

For more information, click here.