Accounting and Auditing Update June 2015

Accounting and Auditing Update June 2015

The June 2015 edition of the Accounting and Auditing Update provides an overview of the key amendments to the Companies Act, 2013 and corresponding amendments made in the Rules thereon.

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Accounting and Auditing Update June 2015

This month we examined in detail key principles governing derecognition of a financial asset as envisaged in the IAS 39, Financial Instruments: Recognition and Measurement. These principles are in line with Ind AS 109, Financial
Instruments.

We also discussed two important opinions of the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI). One on the requirements of AS 25, Interim Financial Reporting. Additionally, we highlighted the practical challenges that the companies may face in estimating the income tax expense for the interim periods in light of the EAC opinion on the principles of AS 25 and its application on interim financial statements. Second EAC opinion on the topic of accounting treatment of liquidated damages under a contract. We examined the corresponding guidance under Ind AS 115, Revenue from Contracts with Customers on liquidated damages.

Recently, the ICAI also issued two guidance notes – ‘Accounting for Derivative Contracts’ and ‘Accounting for Expenditure on Corporate Social Responsibility (CSR) activities’. In this issue, we provided an overview of these guidance notes.In addition, we cast our lens on the key impact areas on implementation of Ind AS 17, Leases and status of the IASB-FASB convergence project on lease accounting.

Finally, in addition to our regular round up of regulatory updates, we also provided an update on the International Accounting Standards Board’s (IASB) proposed decision to defer the effective date of IFRS 15, Revenue from Contracts with Customers, and has published an Exposure Draft of proposed change in the effective date of IFRS 15 and a summary of recent amendment to U.S. GAAP standard on consolidation.

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