In this month’s call, we covered the salient features of Indian Accounting Standard (Ind AS) 110, ConsolidatedFinancial Statements and Ind AS 27, Separate Financial Statements along with key differences with AS 21, Consolidated Financial Statements.
On 5 June 2015, the Ministry of Corporate Affairs (MCA) issued a notification which provides exceptions / modifications / adaptations to some of the provisions of the Companies Act, 2013 (2013 Act) for private companies. In this call, we provided an overview of the key exceptions/ modifications/ adaptations made to the 2013 Act for private companies.
Ind AS 110 establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. Under Indian GAAP, control is assessed based on ownership of more than one-half of the voting power or control of the composition of the Board of Directors. However, Ind AS 110 introduces a new definition of control and a single control model. The standard identifies a number of indicators and an in-depth analysis to assess whether an investor controls an investee. Due to the fundamental difference in the definition of control, the universe of entities that get consolidated could potentially be different under the two frameworks.
Ind AS 27 prescribes the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements.
In this call, we examined the key requirements of the Ind AS 110 and Ind AS 27 along with the first-time adoption requirements relating to consolidated financial statements. We also highlighted key differences from current Indian GAAP.
On 24 June 2014, the MCA vide Section 462(1) of the 2013 Act issued a draft notification proposing a number of modifications with respect to certain Sections of the 2013 Act that would be applicable to a private company. The comment period ended on 1 July 2014.
After nearly one year, on 5 June 2015 the MCA issued a final notification which provides exceptions / modifications / adaptations to some of the provisions of the 2013 Act for private companies. This notification has come into force from 5 June 2015.
In this call, we provided an overview of the key exceptions/ modifications/ adaptations made to the 2013 Act for private companies.
© 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.