The weekly messenger | Edition 12.23

Accounting News

Technical Guide on Accounting for NPOs - 31 May 2023

In light of the SEBI’s Framework for Social Stock Exchange, it has become essential to prescribe detailed guidance on the accounting by Not-for-Profit Organisations (NPOs), including applicability of Accounting Standards for NPOs. Therefore, to recommend such guidance and to update the formats of financial statements to achieve comparability of financial statements being prepared by NPOs together with the amendments being prescribed in Income Tax, the Accounting Standards Board (ASB) of the ICAI has issued the revised edition of the Technical Guide on Accounting for NPOs.

Further, for the ease of preparers, the ICAI has also issued the excel files of Illustrative formats for Financial Statements of NPOs.

For more information, click here.

For Excel Files of Illustrative Formats for Financial Statements of NPOs, click here.

IASB amends tax accounting requirements to help companies respond to international tax reforms – 23 May 2023

The International Accounting Standards Board (IASB) has issued certain amendments to IAS 12, Income Taxes, which provide companies temporary relief from accounting for deferred taxes arising from the Organization for Economic Co-operation and Development's (OECD's) 

These Amendments shall come into force immediately; however, companies are required to provide the disclosures to investors for annual reporting periods beginning on or after 1 January 2023.

For more information, click here.

FASB issues new chapter of its Conceptual Framework: The Reporting Entity – 8 June 2023

The Financial Accounting Standards Board (FASB) has issued a new chapter of its Conceptual Framework that describes a reporting entity. The new chapter describes a reporting entity as “a circumscribed area of economic activities that can be represented by general purpose financial reports that are useful to existing and potential investors, lenders, and other resource providers in making decisions about providing resources to the entity.” A reporting entity has three features:

• Economic activities have been conducted.

• Those economic activities can be distinguished from those of other entities.

• The financial information in general purpose financial reporting faithfully represents the economic activities conducted within the circumscribed area and is useful in making decisions about providing resources to the reporting entity.

For more information, click here.

Regulatory News

Companies (Accounts) Second Amendment Rules, 2023 - 02 June 2023

The Ministry of Corporate Affairs (MCA) has issued the Companies (Accounts) Second Amendment Rules, 2023, wherein it has notified that for the financial year 2022-2023, Form CSR-2 (i.e., the Report on Corporate Social Responsibility) shall be filed separately on or before 31 March 2024, after filing Form No. AOC-4 or Form No. AOC-4-NBFC (Ind AS) or Form No. AOC-4 XBRL, as the case may be.

These amendments shall come into force w.e.f. 2 June 2023.

For more information, click here.

LLP (Amendment) Rules, 2023 - 02 June 2023

The MCA has issued the Limited Liability Partnership (LLP) (Amendment) Rules, 2023, wherein the ‘LLP Form No.3, Information with regard to Limited Liability Partnership Agreement and changes, if any, made therein’ has been substituted with a new form.

These amendments shall come into force w.e.f. 3 June 2023.

For more information, click here.

With mandatory climate disclosure on the horizon, new guide shows accountants how to get greenhouse gas reporting in order- 30 May 2023

The International Federation of Accountants (IFAC) and We Mean Business Coalition (WMBC), in partnership with Accounting for Sustainability (A4S), Global Accounting Alliance (GAA) and World Business Council for Sustainable Development (WBCSD), has released a new guidance to help the professional accountants and finance professionals deliver robust greenhouse gas (GHG) reporting.

This guidance has been issued in response to rapidly escalating impacts of climate change and emerging mandatory requirements that companies disclose robust information about their GHG emissions and climate risks and opportunities to help investors allocate capital to the ‘greenest’ companies.

The Guidance is divided into two parts, wherein the first part provides finance and accounting professionals with a roadmap to engage with others across their business to prepare for GHG emissions reporting requirements aligned to financial reporting processes and second part provides technical guidance necessary to collect and enhance the quality of data related to all scopes of GHG emissions at individual entity and group levels.

For more information, click here.