Issue 16 | November 2017 | KPMG | IN
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Issue 16 | November 2017


The new revenue standard (Ind AS 115, Revenue from Contracts with Customers) is expected to be applicable to Indian companies following Ind AS road map from 1 April 2018. Internationally, IFRS 15 (equivalent standard to Ind AS 115) would be applicable from 1 January 2018. This standard would replace the current standards on Ind AS 18, Revenue and Ind AS 11, Construction Contracts. Revenue is a key performance metric for many entities and Ind AS 115, introduces a new framework – five step model – for the analysis of revenue transactions. The new revenue model is expected to apply to all industries and all types of revenue generating transactions. The new requirements are expected to affect different entities in different ways. From this edition of Accounting and Auditing Update (AAU), we begin a new series of articles that would describe the expected significant changes in the way entities would recognise, present and disclose revenue. The article in this edition highlights some of the key changes that Indian companies can expect on application of Ind AS 115.

This publication also carries an article on recognition of interest income and impairment allowance on financial assets that are credit impaired. Financial assets are considered to be credit impaired when events that have a detrimental impact on the estimated future cash flows of the asset, take place. Banks and financial institutions in India would need to apply forward looking model for computing impairment allowance on such assets. Therefore, our article aims to describes an approach that may be followed to recognise an impairment allowance and interest income along with the current regulatory requirements for banking/non-banking financial companies in India.

An article on the Companies Act, 2013 (2013 Act) provides an overview of the key provisions of the 2013 Act and the related rules in relation to the restructuring of companies. Additionally, the article highlights the relevant requirements of the Securities and Exchange Board of India’s regulations that are applicable to listed companies in India.

While preparing consolidated financial statements under Ind AS, equity method has for accounting of interests in associates and joint ventures. The article on this topic highlight practical application areas while accounting for investments under equity method.

Our publication also carries a regular synopsis of some recent regulatory updates in India and internationally.