The weekly messenger | Edition 50.18

Accounting News

FASB issues narrow-scope improvements to accounting for lessors – 10 December 2018

The Financial Accounting Standards Board (FASB) has issued an Accounting Standard Update (ASU) No. 2018-20, ‘Lease (Topic 842) - Narrow Scope Improvements to Lessors’, wherein it has issued certain amendments with respect to the following topics:

• Sales taxes and other similar taxes collected from lessees;
• Certain lessor costs;
• Recognition of variable payments for contracts with lease and non-lease components.

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The International Accounting Standard Board (IASB) after discussing the concerns and implementation challenges raised by the stakeholders on International Financial Reporting Standard (IFRS) 17 ‘Insurance Contracts’, has proposed one narrow -  scope amendment to the aforesaid standard which would require the insurance companies to present the insurance contracts on the balance sheet at the portfolio level rather than at the grouping level for the contract measurement purposes.   
 
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The IASB has issued an exposure draft (ED) on ‘Onerous Contracts - Cost of Fulfilling a Contract (Proposed amendments to IAS 37)’ which specifies which costs a company should include, when assessing whether a contract will be loss - making.
 
Comments are to be provided by 15 April 2019.
 
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The IASB has published a summary report on its Post - Implementation Review of IFRS 13, ‘Fair Value Measurement’ which states that the requirements of the aforesaid standard are working as intended and that the information provided by the companies applying the Standard is useful to investors.
 
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The IASB has issued the December 2018 IFRS for Small and Medium Enterprises (SME’s) Update which includes information on:

• IFRS for SMEs Standard—forthcoming review;
• Update on IFRS for SMEs Standard modules;
• IFRS for SMEs Standard translations—status report.

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Regulatory News

ED of Amendments in Ind AS XBRL Taxonomy – 15 December 2018         

The Institute of Chartered Accountants of India after considering the implementation of Ind AS 115 ‘Revenue from contracts with customers’ and withdrawal of Ind AS 11 'Construction Contracts' and Ind AS 18 ‘Revenue’ for the financial year 2018-19, amendments in other Ind ASs, inclusion of few Ministry of Corporate Affair (MCA) specific requirements to meet corporate governance reporting requirements etc.  has proposed certain amendments in Ind AS XBRL taxonomy for financial reporting purposes.
           
Comments are to be provided by 30 December 2018.
 
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The MCA has decided to relax the additional fees payable by companies on CRA – 4 (Cost Audit Report in XBRL format) upto 31 December 2018, wherever additional fee is applicable.
 
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The MCA after considering the various representations being received, regarding the extension of the last date of filing of form NFRA -1 has stated that the time limit for filing of form NFRA -1 will be 30 days from the date of deployment of this form on the website of MCA/NFRA for all bodies corporate governed by the National Financial Reporting Authority (NFRA) Rules, 2018 (excluding companies as defined under Section 2(20) of the Companies Act, 2013, which are not required to file this Form).
 
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The Securities and Exchange Board of India (SEBI) Board met on 12 December 2018 and has made the following decisions:

• Creation of Segregated Portfolio by Mutual Funds;
• Review of framework for Institutional Trading Platform;
• Clubbing of investment limits for Foreign Portfolio Investors (FPIs);
• Amendment to SEBI (Issue of Capital and Disclosure Requirements) Regulations,2018;
• Amendment in Regulation 29(4) of Takeover regulations,2011;
• Review of framework for Offer for Sale (OFS) of shares through Stock Exchange mechanisms;
• Role of Custodians in Commodity Derivatives Market to enable institutional participation;
• Consultation Paper on Uniform Valuation Methodology for pricing of Corporate Bonds.

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The SEBI has issued a clarification on clubbing of investment limits of FPIs, wherein it has provided that clubbing of investment limit for FPIs will be on the basis of common ownership of more than 50% or based on common control.
 
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IRDAI (Re-insurance) Regulations, 2018 - 12 December 2018

The Insurance Regulatory and Development Authority of India (IRDAI) has issued ‘Insurance Regulatory and Development Authority of India (Re-insurance) Regulations, 2018’ which inter-alia includes:

• Definitions;
• Re-insurance Programme;
• Cross Border Re-insurer;
• Procedures for Re-insurance placements;
• Cession limits;
• Alternative Risk Transfer (ART);
• Submission of Information;
• Power of the Authority etc.

The aforesaid regulations shall come into effect from 1 January 2019 and shall be applicable to Insurers as defined under Sec.2 (9) of the Insurance Act, 1938 (‘Act’), International Financial Services Centre (IFSC) Insurance Office (IIO) and Exempted Insurers as defined under Sec.118(c) of the Act.
 
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