The weekly messenger | Edition 09.16
This newsletter is a weekly compilation of accounting, auditing and related regulatory news from different accounting and regulatory bodies in India and overseas.
Accounting News
IASB issues amendments to insurance contracts standards – 12 September 2016
The International Accounting Standards Board (IASB) has issued amendments to its existing International Financial Reporting Standard (IFRS) 4 in order to address the concerns that would arise if the new financial instrument standard i.e. IFRS 9 would be implemented before implementation of replacement standard for IFRS 4 that IASB is developing. These amendments have introduced two approaches, namely:
- Overlay approach
- Deferral approach
The amended standard further provides the following options to the companies in case they have applied IFRS 9 before issuance of new insurance contracts standard:
- Companies which issue Insurance Contracts are given an option to recognize in other comprehensive income, rather than profit or loss, the volatility that could arise;
- Companies whose activities are predominantly connected with insurance are given an option of temporary exemption from applying IFRS 9 until 2021. Deferment of application of IFRS 9 results in application of existing IAS 9.
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Regulatory News
Amendment to Schedule V of the Companies Act, 2013 – 12 September 2016
Central Government (CG) has made various amendments to Schedule V of Companies Act, 2013 which contains provisions regarding appointment and payment of remunerations of managerial person in certain cases. These amendments inter-alia includes:
- doubling of the eligible amounts as against the effective capital.
- exempting a managerial personnel functioning in a professional capacity from CG’s approval.
- extending the provisions to include company’s affiliates w.r.t. holding securities thereof.
- the limit provided (2.5% of the current relevant profit) under Section II (B) of Part II of the schedule has been done away with.
- liberalizing the conditions w.r.t. default in repayment of its debt in those cases where prior approval of secured creditors have been obtained.
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