Know Your Rights!!

PURPOSE I propose to start series of articles on How-to in IFRS? Some of it comes from my working experience at foreign banks and the Big 4 and some from my teaching notes at the IFRS certification courses. Hope you will enjoy the read..!! Happy reading :) How-to Know your Related Parties? OVERVIEW Related party transactions (RPT) are a very common in business nowadays. They are often assumed to be not a good thing. Though this may be true is some corporate scams where the board of directors and promoters take shareholders for a ride, in most cases there are valid commercial reasons for dealing with related parties. The Companies Act, 2013 in India comprehensively provides guidance on the related parties which is not a part of this article. I expressly only write about how to know your related party according to IAS 24. WHO IS ENTITY’S RELATED PARTY? A party is related to an entity, if the party: 1.     is controlled by the entity, or control...

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...