The weekly messenger | Edition 10.16

Accounting News

Proposed ASU for technical corrections and improvements to new revenue standard- 19 September 2016

Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standard update (ASU) which inter-alia includes corrections and improvements to its ASU no.2014-09 relating to Revenue from Contracts with Customers issued in May 2014 in the following areas:

• Loan Guarantee Fees
• Contract Asset versus Receivables
• Refund Liability
• Advertising Cost

Comments to be received by 4 October 2016.
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Shortening of amortisation period for certain Debt Securities- 22 September 2016

FASB has issued a proposed ASU to shorten the amortization period for callable debt securities purchased at a premium as per which premium will be amortized to the earliest call date as against the current practice of amortising the premium as an adjustment of yield over the contractual life of the instrument . Further, this proposal would not require an accounting change for securities purchased at discount i.e. those securities would continue to be amortized till maturity.

The purpose of bringing this approach is to align the amortization period of premiums and discounts to expectations incorporated in market pricing on the underlying securities and to align interest income recorded on bonds at a premium or discount with the economics of the underlying instruments which in turn will provide more decision useful information.              
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Regulatory News

Companies (Management and Administration) Amendment Rules- 23 September 2016

Company (Management and Administration) Amendment Rules, 2014 has been amended via Companies (Management and Administration) Amendment Rules, 2016 as per which certain administrative changes have been brought in w.r.t. the following aspects: 

• Maintenance of register of members
• Declaration in respect of beneficial interest in any shares
• Return of changes in shareholding position of promoters and top ten shareholders
• Calling of extraordinary general meeting by requisitionists
• Voting through electronic means
• Procedure to be followed for conducting business through postal ballot
• Minutes of proceedings of general meeting, board meeting and other meetings and resolutions passed by a postal ballot
• Form MGT-6 

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Clarification by SEBI regarding Revenue recognition and Excise Duty Restrictions- 20 September 2016

The Securities Exchange Board of India (SEBI) in order to bring uniformity regarding the disclosure of ‘revenue from operations’ i.e. whether revenue should be disclosed exclusive of excise duty or inclusive of excise duty has issued a clarification as per which now the companies regulated by SEBI may disclose revenue from operations inclusive of excise duty instead of net of excise duty as per the Companies Act, 2013.

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