The weekly messenger | Edition 27.18

Accounting News

Ind AS: An Overview (Revised 2018) – 3 July 2018

The Institute of Chartered Accountants of India (ICAI) in order to ensure smooth implementation of Indian Accounting standard (Ind AS) and to enable the members and stakeholders to get an overall understanding of the Ind AS has issued a revised publication on ‘Ind AS: Overview (Revised 2018)’, containing all the recent amendments made in Ind AS. This publication inter-alia includes:

• Approach to International Financial reporting Standards (IFRS) - converged Ind AS;
• Roadmaps for implementation of Ind AS;
• Summary of Ind AS;
• Major Differences between Ind AS and IFRS;
• Major Differences between Ind AS and AS; and
• Ind AS Implementation Initiatives

For more information, click here.

Ind AS: Disclosure Checklist – 5 July 2018

The Accounting Standard Board (ASB) of the ICAI considering the fact that disclosure component of the Ind AS’s plays an equally important role as compared to other components of Ind AS and Ind AS requires enhanced disclosures in comparison to Accounting Standards (AS) notified by the Ministry of Corporate Affairs has recently issued a publication on ‘Ind AS: Disclosure Checklist’ in order to provide a compilation of all the disclosures at one place. The disclosure checklist as prescribed by this publication is applicable to all the entities which are preparing its financial statements voluntarily and mandatorily w.e.f. or after 1 April 2016, as per Ind AS and also includes the disclosures required by the recently issued Ind AS 115 ‘Revenue from Contracts with Customers’.    

For more information, click here.

Ind AS: Impact Analysis and Industry experience  – 5 July 2018

The ICAI has issued a publication on impact analysis of successful Ind AS implementation and experience of the industries w.r.t. the same wherein it has undertaken a study with the objective of assessing the quantitative/qualitative impact of Ind AS on the financial statements of Indian companies’ financial statements due to Ind As transition and to seek feedback of key stakeholders, i.e., prepares/providers of financial information on the basis of review of publicly available consolidated financial statements of randomly selected 170 listed companies, covered in first phase of Ind AS implementation roadmap.

For more information, click here.

Educational Material on Ind AS 27, Separate Financial Statements and Ind AS 28, Investments in Associates and Joint Ventures –3 July 2018

The Ind AS Implementation Group of the ICAI has issued the Educational Material on Ind AS 27 ‘Separate Financial Statements’ and Ind AS 28 ‘Investments in Associates and Joint Ventures’ in order to provide guidance by way of Frequently Asked Questions (FAQs) explaining the principles enunciated in the Standards and guidance on how an entity shall account for the investments in the subsidiaries, associates and joint ventures. The Education material inter-alia includes:

• Summary of Ind AS 27 and Ind AS 28;
• FAQs on Ind AS 27 and Ind AS 28;
• Differences between Ind AS 27 and IAS 27;
• Differences between Ind AS 28 and IAS 28;
• Differences between Ind AS 28 and IAS 23.

For more information, click here.

ED of AS 19, Employee Benefits – 10 July 2017

The ASB of ICAI has issued an Exposure Draft (ED) on AS 19, ‘Employee Benefits’. The purpose of issuing this ED is to upgrade the existing standard in order to bring that nearer to Indian AS.
Comments are to be received by 10 August 2018.

For more information, click here.

Auditing News

Announcement: Unique Document Identification Number – 10 July 2018

The Professional Development Committee of ICAI after considering the instances wherein the financial statements and documents are being certified/attested by third persons in lieu of the CA members has introduced the concept of Unique Document Identification Number (UDIN) which would be generated for every document certified/attested by practicing Chartered Accountants and registered with the UDIN portal. The aforesaid practice has been made recommendatory w.e.f. 1 July 2018, which would be later on made mandatory .

For more information, click here.

ED of SA 800 (Revised), SA805 (Revised) and SA 810 (Revised) – 10 July 2018

The ICAI has issued EDs on the following Standards on Auditing (SA):

• SA 800 (Revised), Special Considerations – Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks;
• SA 805(Revised) Special Considerations – Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement;
• SA 810 (Revised), Engagement to Report on Summary Financial Statements.

Comments are to be received by 25 August 2018.

For more information, click here.

Regulatory News

Companies (Acceptance of Deposits) Amendment Rules, 2018 – 5 July 2018

The Central government (CG) has amended the Companies (Acceptance of Deposits) Rules, 2014 with the Companies (Acceptance of Deposits) Amendment Rules, 2018 wherein the following changes have been made:

• In sub rule (1) of Rule 4 ‘Form and particulars of advertisements or circulars’, a new proviso has been added which states that a certificate of the statutory auditor of the company shall be attached in form DPT- 1, stating that the company has not committed any default in repayment of deposits or in the payment of interest on such deposits accepted either before or after the commencement of the Act. In case, a company had committed a default in either of the cases, then a certificate of the statutory auditor of the company shall be attached in Form DPT -1, stating that the company had made that default good and a period of five years has lapsed since, the date of making of such default as good;
• Rule 5 ‘Manner and acceptance of deposit insurance’ has been omitted;
• In Rule 13 ‘Maintenance of liquid assets and creation of deposit repayment reserve account’, earlier there was a requirement that the amount to be deposited in separate bank account to be called as deposit repayment reserve account shall not at any time fall below fifteen percent of the amount of deposits maturing until the end of the current financial year and the next financial year. Now, this limit has been changed to twenty percent of the amount of deposits maturing during the financial year.  
• Clause (k) of sub-rule (1) of Rule 14 ‘Register of deposits’, which states that the particulars of details of deposit insurance shall be entered in the register of deposits which is to be maintained at the registered office of the company has been omitted; and
• Existing Form DPT-1 ‘Circular or Circular in the form of advertisement inviting deposits’ and Form DPT – 3 ‘Return of Deposits’ have been substituted with the new forms.

These rules shall come into force w.e.f. 15 August 2018

For more information, click here.

Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2018 – 5 July 2018

The CG has amended the Companies (Appointment and Qualification of Directors) Rules, 2014 with the Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2018 by making the following modifications/ additions, namely:

• Existing Rule 11 ‘Cancellation or surrender or Deactivation of DIN’ has been renumbered as sub-rule (1) and after that two new sub-rules i.e. sub-rule (2) and (3) have been added which states that the CG or Regional Director or any other officer authorised by the CG or Regional Director has been given the authority to deactivate the Director Identification Number (DIN) of an individual who does not intimate his particulars in e-form DIR-3 KYC within stipulated time in accordance with rule 12A and  such deactivated DIN would be re-activated only after e-form DIR -3 –KYC is filed along with fee as prescribed under Companies (Registration Offices and Fees) Rules, 2014 ;
• After rule 12, a new rule i.e. Rule 12A ‘Directors KYC’ has been added as per which every individual who has been allotted a DIN as on 31 March of a financial year as per these rules shall submit e-form DIR-3-KYC to the CG on or before 30 April of immediate next financial year. However, an individual who has already been allotted a DIN as at 31 March 2018 shall submit e-form DIR – 3 KYC on or before 31 August 2018 ;
• After form DIR-3, a new form i.e. Form No. DIR – 3 – KYC ‘KYC of directors’ has been inserted.

These rules shall come into force w.e.f. 10 July 2018.

For more information,click here.

Companies (Authorised to Register) Second Amendment rules, 2018 – 5 July 2018

The CG has amended the Companies (Authorised to Register) Rules, 2014 with the Companies (Authorised to Register) Second Amendment Rules, 2018 wherein the following changes have been made:

• In sub - rule (1) of Rule 2 ‘Definitions’, certain new definitions have been added which includes that of society, trust, Registrar of Firms and Registrar of Trusts;
• Rule 3 which provides the manner for the purpose of registration of companies has been substituted by a new rule;
• In sub-rule (1) of Rule 4 ‘Obligation of companies seeking registration to make publication’ which states that ‘every company seeking registration under provisions of Part I of Chapter XXI shall publish an advertisement about such registration in Form No. URC. 2 in a newspaper in English and in ay vernacular language, circulating in the district in which Limited Liability Partnership or the firm as the case may be is situate’, the words ‘Limited Liability Partnership or the firm as the case may be is situate’ have been substituted by the words ‘Limited Liability Partnership, firm, society or trust, as the case may be is, situated’.
• In sub-rule (2) of Rule 4 which states that ‘a copy of the notice, as published and the copy of the notice served on Registrar (LLP) along with proof of service, shall be attached with Form No. URC 1’, after the words, ‘Registrar (LLP)’, the words ‘Registrar of Firms, Registrar of Societies or Registrar of Trust, as the case may be’, have been inserted;
• In clause (i) and (v) of Rule 5 ‘Other obligations of companies seeking registration’, the words Limited Liability Partnership have been substituted by the words ‘firm, society or trust’. Similarly, in clause (iii), after the words ‘Registrar of Firms’, the words ‘Registrar of Societies or Registrar of Trusts’ have been added;
• Further, three new clauses i.e. clause (vi), (vii) and (viii) have been added in Rule 5, which mainly deals with the registration of a society or trust as a company under the Companies Act, 2013;
• Existing Form No. URC-1 and URC-2 have been substituted by the new ones.

These rules shall come into force w.e.f. 15 August 2018.

For more information, click here.

Companies (Registration of Charges) Amendment Rules, 2018 – 5 July 2018

The CG has amended the Companies (Registration of Charges) Rules, 2014 with the Companies (Registration of Charges) Amendment Rules, 2018, wherein the following changes have been made:

• In sub - rule (1) of Rule 3 ‘Registration of creation or modification of charge’ which deals with the filing of Form No. CHG-1 or Form No. CHG – 9 w.r.t. registration of charge with the Registrar, the words ‘and filed’ have been substituted with the words ‘shall be filed’;
• In sub - rule (1) of Rule 8 ‘Satisfaction of charge’, earlier a company was required to give intimation to the Registrar in Form No.CHG-4 along with the fee within a period of thirty days from the date of the payment or satisfaction in full of any charge registered under Chapter VI. Now, the aforesaid time period of thirty days has been extended to three hundred days.
• Similarly, in sub - rule (1) of Rule 12 ‘Condonation of delay and rectification of register of charges’, which states that  the Registrar shall not register the satisfaction of the charge if the same is not filed within thirty days from the date on which the payment of satisfaction was made, unless the delay is condoned by the CG. Now, this period of thirty days has been extended to three hundred days.

These rules shall come into force on the date of their publication in the Official Gazette.

For more information, click here.

Companies (Registration Offices and Fees) Third Amendment Rules, 2018 – 5 July 2018

The CG has amended the Companies (Registration Offices and Fees) Rules, 2014 with the Companies (Registration Offices and Fess) Third Amendment Rules, 2018, wherein a new item i.e. item VII ‘FEE FOR FILING e- Form DIR-3 KYC under rule 12A of the Companies (Appointment and Qualification of Directors) Rules, 2014’ has been added in the Annexure to the Companies (Registration Offices and Fees) Rules, 2014 which provides for the fees to be paid  in case there is delay in filing of the Form DIR-3 KYC .

These rules shall come into force w.e.f. 10 July 2018.

For more information, click here.

Notification regarding commencement of certain sections of Companies (Amendment) Act 2017 – 5 July 2018

The CG has appointed 15 August 2018 as the date on which the various other sections of the Companies (Amendment) Act, 2017 shall come into force. These mainly relates to:

• Section 15 i.e. amendment of section 73 ‘Prohibition on acceptance of deposits from public’;
• Section 16 i.e. amendment of section 74 ‘Repayment of deposits, etc., accepted before commencement of this Act’;
• Section 75 i.e. amendment of Section 366 ‘Companies capable of being registered’; and
• Section 76 i.e. amendment of Section 374 ‘Obligations of companies registering under this Part’.

For more information, click here.

Notification regarding commencement of certain sections of Companies (Amendment) Act 2017 – 5 July 2018

The CG has appointed 5 July 2018 as the date from which the provisions of section 20 of the Companies (Amendment) Act, 2017 i.e. amendment of Section 82 ‘Company to report satisfaction of charge’ shall come into force.

For more information, click here.

The IBBI (Insolvency Resolution Process for Corporate Persons) (Third amendment) Regulations, 2018 – 3 July 2018

The Insolvency and Bankruptcy Board of India (IBBI), has amended the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 with the IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2018, wherein it has made certain changes in the existing regulations and has also inserted some new regulations. These regulations inter-alia includes:

• Regulation 2 ‘Definitions’;
• Regulation 3 ‘Eligibility for resolution professional’;
• Regulation 4A ‘Choice of authorised representative’ (newly inserted);
• Regulation 6 ‘Public announcement’;
• Regulation 7; ‘Claims by operational creditors’;
• Regulation 8; ‘Claims by financial creditors’;
• Regulation 8A ‘Claims by creditors in a class’(newly inserted) etc.

These rules shall come into force on the date of their publication in the Official Gazette i.e. 3 July 2018.

For more information, click here.

SEBI (LODR) (Fourth Amendment) Regulations, 2018 – 8 June 2018

The Securities and Exchange Board of India (SEBI) has amended the SEBI (Listing Obligation and Disclosure Requirements) (LODR) Regulations, 2015 with the SEBI (LODR) (Fourth Amendment) Regulations, 2018 wherein the following regulations have been modified:

• Regulation 7(2) ‘Share Transfer Agent’;
• Regulation 40 ‘Transfer or transmission or transposition of securities;
• Schedule VII ‘Transfer of Securities’.

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 information w.r.t. Central GST (Seventh Amendment) Rules, 2018, click here.