The weekly messenger | Edition 26.18

Accounting News

Companies (Accounting Standards) Amendment Rules, 2018 – 19 June 2018

The Ministry of Corporate Affairs in consultation with National Advisory Committee on Accounting Standards (NACAS) has amended the Companies (Accounting Standards) (AS) Rules, 2006 with the Companies (AS) Amendment Rules, 2018 wherein it has amended the paragraph 32 of the AS 11, ‘The Effect of Changes in Foreign Exchange Rates’ which deals with the methods of disposal of non- integral foreign operations. As per the earlier guidance, in case an enterprise wanted to dispose of its interest in a non-integral foreign operation through sale, liquidation, repayment of share capital, or abandonment of all, or part of, that operation, then in that case, the payment of a dividend was allowed to be a part of such disposal only if it constitutes a return of the investment. Now on the similar parameters, one more condition has been added which states that any remittance from a non-integral foreign operation which is by way of repatriation of accumulated profits would not form part of such disposal unless the same constitutes return of the investment.

These rules shall come into force w.e.f. 1 April 2018.

For more information, click here.

FASB issues simplification to accounting for non-employee share based payments – 20 June 2018

The Financial Accounting Standard Board (FASB) has issued an Accounting Standard Update (ASU) in order to simplify several aspects of the accounting for share based payments issued to non-employees for goods or services. The purpose of issuing this update is to widen the scope of FASB ASC Topic 718, ‘Compensation — Stock Compensation’, which currently covers only share-based payments to employees. This change would substantially align the accounting for share-based payments for both employees and nonemployees and further, this ASU would also supersede the Subtopic 505-50, ‘Equity — Equity-Based Payments to Non-Employees’.
These amendments would be effective for public companies for fiscal years beginning after 15 December 2018, whereas for all other companies, these would be applicable for fiscal years beginning after 15 December 2019.

For more information, click here.

Regulatory News

Suggestion invited on draft on cross- border insolvency – 20 June 2018

The Central Government (CG) has issued a draft chapter on Cross Border Insolvency which would be included within the Insolvency and Bankruptcy Code, 2016, in order to provide a comprehensive legal framework considering the fact that corporates transact businesses in more than one jurisdiction and also have assets across many jurisdiction.
Comments and suggestions are to be received by 30 June 2018.

For more information, click here.

SEBI Board Meeting- 22 June 2018

The Securities and Exchange Board of India (SEBI) Board met on 21 June 2018 wherein it took decisions w.r.t. certain important matters, the gist of which is as follows:

• Review of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
• Replacing SEBI ((Buy-back of Securities) Regulations, 1998 with new SEBI (Buy -back of Securities) Regulations, 2018;
• Review of SEBI (Issue of Capital and Disclosure Requirements) (ICDR) Regulations, 2009;
• Decision on review of regulation and relevant circulars pertaining to Stock Exchanges, Clearing Corporations and Depositories (‘Market Infrastructure Institutions’);
• Role of Sub-broker vis-à-vis Authorised Person;
• Consultation Paper for the Amendment of various SEBI Regulations in respect of entities undertaking third party assignment under securities laws;
• Establishment of National Centre for Financial Education (NCFE) as Section 8 Company subscription to its Share Capital; and
• SEBI Annual Report 2017-18

For more information, click here.

Further GST Updates

The Central Board of Indirect Taxes and Customs has issued certain updates w.r.t. Goods and Services Tax (GST) whose links are as follows:

• For Central GST (Sixth Amendment) Rules, 2018, click here;
• For information w.r.t. refunds processed during second refund extended fortnight, click here; and
• For information w.r.t. modifications to the procedure for interception of conveyances for inspection of goods in movement, and detention, release and confiscation of such goods and conveyances, as clarified in Circular No. 41/15/2018-GST dated 13.04.2018 –reg., click here.