Know Your Rights!!

Abstract of the Ministry of Corporate Affairs (MCA) Notification - Companies (Indian Accounting Standards) Rules, 2015  G.S.R dated 16 Feb 2015 Effective from: 1-April-2015 Obligation to comply with Indian Accounting Standards (Ind AS) The Companies and their auditors shall comply with the Indian Accounting Standards (Ind AS) specified in Annexure (39 standards in total) to these rules in preparation of their financial statements and audit respectively, in the following manner, namely:-  any company may comply with the Indian Accounting Standards (Ind AS) for financial statements for accounting periods beginning on or after 1st April, 2015, with the comparatives for the periods ending on 31st March, 2015, or thereafter;  the following companies shall comply with the Indian Accounting Standards (Ind AS) for the accounting periods beginning on or after 1st April, 2016, with the comparatives for the periods ending on 31st March, 2016, or the...

Have you come across a situation when you find that the block of assets are fully depreciated in the books but the company is still using them in its operation to generate revenue?  In this case, the original estimate of assets useful life proved to be incorrect. These assets are used beyond their useful life, they are fully depreciated and their carrying amount in the books is zero. What depreciation expense can you recognize in the profit or loss? None, of course – because the carrying amount of the assets cannot be sub zero. As a result, the matching principle does not work here. The expenses simply do not match the benefits gained from these assets. The standard IAS 16 Property, Plant and Equipment defines the useful life as either: · The period over which an asset is expected to be available for use by an entity, or · The number of production or similar units expected to be obtained from the asset by an entity. Now this is e...

On perusal of the Companies Act 2013, many provisions applicable to the private companies were onerous for the smooth functioning of a company. The Draft Notification by the Ministry of Corporate Affairs dated 24-06-2014 is in the welcome direction of conducting business rather than getting entangled in compliance. Let’s have a look at the proposed changes in the notification applicable for private limited companies in India: SN Chapter/ Section number/ Sub-section(s) in the Companies Act, 2013 Exceptions/ Modifications / Adaptations 1. Section 43 – Kinds of Share capital & Section 47 – Voting Rights Both whole sections shall not apply 2. Section 62 (1) (a) – Rights offer to the existing shareholders shall be made by notice specifying the no. of shares offered and limiting the time not being less than 15 days and not exceeding 30 days from the date of offer within which the offer, if not acce...

Classification of Financial Instruments into 4 categories of Financial Assets and 2 categories of Financial Liabilities are important for subsequent measurement. Only the categories decide how a financial asset or liability will be subsequently measured.  

Prior to IFRS 13: Fair Value Measurement standard, fair value was defined as “an amount exchanged between knowledgeable willing parties at an arm’s length transaction”. As per this definition fair value is the price at which parties are ready to "enter" into the transaction. The notion was therefore "entry price" The change in IFRS 13 of the definition of fair value concentrates on exit price. The new definition "Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." It means that an entity shall look at how the market participants will price the asset or liability at a measurement date. The notion here is now the "exit price". The objective of IFRS 13 was to define fair value in a single IFRS and to set out disclosures about fair value measurements. What must an entity do to calculate Fair Value? determ...

The Companies Act 2013 comes into force from 1-April-2014 for the Indian corporate. There are sea changes brought in this Act from the earlier one. Let's have a quick browse on the checklist: WHAT COMPANIES WILL HAVE TO DO? IMMEDIATELY Devise and implement policies on corporate social responsibility and vigil mechanism (if any one of the criteria satisfied ~ networth of Rs.500 crore or more, turnover of Rs. 1,000 crore or more, a net profit of Rs. 5 crore or more during any financial year) Finalise a new code for independent directors and identify and notify the related parties to their respective accounts departments Print new stationery, bills, etc, with name, address of the registered office, Company Identification No. (CIN) , telephone, fax, email and website File returns with the Registrar of Companies on changes in top 10 shareholders Get certificate of independence from directors Maintain register of key management personnel (KMP) WITHIN THREE MONTHS Fil...

  Prior to the introduction of IFRS 9, OCI had 5 components and the easier way to remember was the acronym CAART – which is: C – The effective portion of gains/losses on hedging instruments in a C ash flow hedge A - A ctuarial gains and losses on defined benefit pension plans  A - Gains and losses on A vailable-for-sale financial assets R - R evaluation surplus related to property, plant and equipment T - Gains and losses arising from T ranslating the financial statements of a foreign operation Now with IFRS 9 earlier adoption, the acronym has changed from CAART to CRAAFT C – The effective portion of gains and losses on hedging instruments in a C ash flow hedge R - R evaluation surplus related to property, plant and equipment A - A ctuarial gains and losses on defined benefit pension plans  A - Gains and losses on A vailable-for-sale financial assets F - F inancial liabilities designated as at fair value through profit or loss: fair value changes attr...