Know Your Rights!!

1.1 Meaning of Consolidated Financial Statements Consolidated Financial Statements (CFS) are the financial statements of a group presented as those of single economic entity. A group is a parent and all its subsidiaries. A parent is an investor that controls another entity called subsidiary. The parent and subsidiary (ies) constitute a Group. A parent company is required to prepare CFS of the Group as a whole. CFS are: 1. Consolidated Balance Sheet 2. Consolidated Comprehensive Income Statement 3. Consolidated Statement of Changes in Equity 4. Consolidated Statement of Cash Flows 5. Notes and other statements 6. Statement of Restatement Analysis 1.2 Meaning of Control Control: is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Criteria in deciding control over another entity are: i. Majority voting power (more than half of t...

Adopting International Financial Reporting Standards (IFRS) present challenges that many people underestimate. The International Accounting Standards Board (IASB) on November 24, 2008 has issued Reconstructed version of IFRS 1: First Time Adoption of International Financial Reporting Standards applicable to the entities on or after January 1, 2009 although earlier application is permitted. The Institute of Chartered Accountants of India (ICAI) has issued Ind- AS 41 talking about the transition requirements on the lines of IFRS 1 (Revised). When a company prepares its first IFRS financial statements for the year ending 31st March 2012 with one year comparatives, the date of transition to IFRS will be 1st April 2010 and the opening IFRS balance sheet will be prepared at that date. A company required to present two full years of comparative information should prepare an opening balance sheet at 1st April 2009. The opening IFRS balance sheet is the starting point for all subsequent account...

International Financial Reporting Standards will be mandatory for financial statements from April 2011 With the commencement of the next financial year, the Indian Accounting Standards are all set to go global by converging with the International Financial Reporting Standards (IFRS). While it will enable Indian firms to access and understand the balance sheets of firms in the international markets, many chartered accountants (CA) in Pune feel that the country may not be ready for the transition. According to the CAs, for an economy to make the transition, an enormous amount of training is required, not just for the CAs but for a vast group of people likely to be affected by the new accounting norms. Dolphy D’Souza, national leader, IFRS, is of the view that only big accounting firms like KPMC and a few others have the expertise in IFRS as of now. “While Indian Institute of Chartered Accountants (ICAI) is training CAs, we need to train audit committee members, regulators, financial anal...

The International Accounting Standards Board (IASB) today published for public comment an exposure draft of improvements to the accounting for insurance contracts. The exposure draft proposes a single International Financial Reporting Standard (IFRS) that all insurers, in all jurisdictions, could apply to all contract types on a consistent basis. When the IASB was established in 2001 there were no international financial reporting requirements for insurance contracts. In 2004 the IASB introduced IFRS 4 Insurance Contracts as an interim standard that permitted many existing international accounting practices to be retained, whilst beginning a more comprehensive review of insurance accounting as a second phase of the project. The proposals published today are the result of that review. The IASB launched its public consultation when it published a discussion paper, Preliminary Views on Insurance Contracts , in 2007. In developing the proposals released today, the IASB considered more tha...