The weekly messenger | Edition 20.20

Accounting News

ED on COVID-19 - Related Rent Concessions (Proposed amendment to Ind AS 116, Leases) – 4 June 2020

The International Accounting Standards Board (IASB) had issued certain amendments to IFRS 16, Leases, in order to make it easier for lessees to account for COVID-19 – related rent concessions such as rent holidays and temporary rent reductions.
 
Pursuant to this, the ICAI has also issued an Exposure Draft (ED) on COVID-19 - Related Rent Concessions, which proposes amendment to Ind AS 116, Leases, and aims to address the issues affecting the application of Ind AS 116 requirements to large volumes of rent concessions granted as a direct consequence of the COVID-19 pandemic during 2020.
 
Comments are to be submitted by 10 June 2020.
 
For more information, click here.

FASB offers limited effective date delays on revenue recognition and leases standards – 3 June 2020

In order to provide the stakeholders with a measure of relief during the unprecedent time, the Financial Accounting Standards Board (FASB) has issued an Accounting Standard Update (ASU), which allows certain companies and organisations, who have not yet applied the revenue recognition and leases guidance to delay their implementation by one year.
 
For more information, click here. 

Regulatory News

ED of GN on Report under Section 92E of Income Tax Act 1961 – 2 June 2020

The ICAI has issued an ED of Guidance Note (GN) on Report under Section 92E of the Income Tax Act, 1961 (Transfer Pricing), considering the changes effected by the Finance Act, 2020.
 
Comments are to be submitted by 30 June 2020.
 
For more information, click here.

Revised criteria for classification of MSME – 1 June 2020

The Central Government has issued the revised criteria for classification of Micro, Small and Medium Enterprises (MSMEs), which is as follows:
 

The new criteria shall come into effect from 1 July 2020.
For more information, click here.

The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 – 5 June 2020

The Ministry of Law and Justice has issued the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020, wherein the government of India has decided to suspend the fresh bankruptcy proceedings against persons impacted due to COVID-19 for at least six months and up to a maximum period of one year.
 
The Ordinance shall come into force w.e.f. 5 June 2020.
 
For more information, click here.

IRDAI extends the time limit applicable to Public Disclosures on websites – 4 June 2020

Due to the imposition of various restrictions to contain the spread of the COVID 19 pandemic, the Insurance Regulatory and Development Authority of India (IRDAI) has decided to extend time limit for the insurers with respect to the compliance of various directions regarding public disclosures on their websites for the period ending 31 March 2020 by 30 days.
 
For more information, click here.

IRDA notifies requirement to obtain LEI – 5 June 2020

The Reserve Bank of India has implemented the requirement of Legal Entity Identifier (LEI) in OTC derivatives markets, banking sector and govt. securities market in a phased manner, which can be obtained from Legal Entity Identifier India Ltd.

 
Now, the IRDAI has examined the requirement to obtain the LEI by its regulated entities and the entities dealing with the regulated entities and accordingly notified the following:

• insurers shall necessarily obtain LEI as per the procedure prescribed in the prescribed circulars on or before 31 July 2020;
• insurers shall advise their existing corporate borrowers having total exposures of ₹ 50 crore and above, and have not obtained LEI till now, shall obtain LEI and provide the LEI information on or before 30 June 2020;
• borrowers who do not obtain LEI, are not to be granted renewal/enhancement of credit facilities by the insurers;
• no new loan proposals shall be sanctioned by the insurers without LEI information; and
• insurers shall capture the LEI code of corporate borrowers in their records and specify the same while reporting the transactions executed with such corporate borrowers.

For more information, click here.