This document provides guidance on preparing combined and carve-out financial statements in India. It defines key terms like combined financial statements, carve-out business, and carve-out financial statements. It outlines situations where combined/carve-out statements may be required, such as spin-offs, demergers, and initial public offerings. The guidance discusses preparing combined statements by aggregating financials of related entities and preparing carve-out statements for a portion of an entity. It also covers common aspects and required disclosures for combined/carve-out financial statements.
The document discusses accounting standards and their formulation in India. It provides context on the need for harmonization of accounting policies and practices within a country and internationally. It describes the role of various standard setting bodies in India like the Accounting Standards Board and their objectives in formulating accounting standards. The document also explains the accounting standard setting process and lists the various accounting standards issued by the ASB.
Introduction To Financial Statements And Auditimranbg1
The document provides an introduction to financial statements and the audit process. It defines financial statements as a structured representation of a company's financial position and performance that provides useful information to decision makers. The key components of financial statements are identified as the balance sheet, income statement, statement of cash flows, and notes. Regulatory requirements for preparing and auditing financial statements in Pakistan are outlined for different types of companies. The objectives and need for auditing financial statements are discussed. Important areas of the balance sheet like property, investments, loans, stock, and liabilities are also briefly covered.
Introduction to Accounting Standards_7iWCuHN.pdfPriyaGhosh47
The document discusses accounting standards, including:
1. The objectives and benefits of accounting standards such as standardizing accounting treatments and improving comparability.
2. The standards setting process in India, which involves identification of areas for standards, drafting standards, public comments, and finalization.
3. The status of accounting standards in India, which are developed by ICAI's Accounting Standards Board and notified by the Ministry of Corporate Affairs.
4. The need for convergence with global standards like IFRS to facilitate cross-border investment and improve confidence in financial reporting.
Conversion Ind AS (the converged IFRS standards) in India Dr Biswadev Dash
02/01/2015 when the Press Information Bureau, Government of India, Ministry of Corporate Affairs (MCA) issued a note outlining the various phases in which Indian Accounting Standards converged with IFRS (Ind AS) is proposed to be implemented in India it was a landmark reforms in accounting & reporting sector. With this the Companies other than Banking Companies, Insurance Companies and NBFCs will be covered. Indian Accounting standard is highly precise. Thus Conversion Ind AS (the converged IFRS standards) in India may significantly affect a company’s day-to-day operations and may even impact the reported profitability of the business itself. Of course Conversion brings a one-time opportunity to comprehensively streamline the financial reporting.
Financial and managerial accounting the basis for business decisions 18th edi...KrisWu123
This document provides an overview of Chapter 2 from the textbook "Financial and Managerial Accounting The Basis for Business Decisions 18th Edition Williams".
The chapter introduces the key financial statements - the balance sheet, income statement, and statement of cash flows. It discusses the accounting equation and how business transactions impact the elements of assets, liabilities, and owners' equity. The chapter also covers accounting principles related to asset valuation and different forms of business organization. Learning objectives are provided to explain the nature and purpose of the financial statements and how they are used.
Introduction To Financial Statements And AuditMobasher Ali
The document provides an introduction to financial statements and auditing. It discusses the purpose of financial statements which is to provide useful information to users for decision making. A complete set of financial statements includes a balance sheet, income statement, statement of changes in equity, cash flow statement, and notes. The document also outlines the regulatory requirements for auditing financial statements in Pakistan for various types of entities. The objective of an audit is to express an opinion on whether the financial statements present fairly in accordance with accounting standards.
This document provides an overview of accounting standards and guidance notes. It defines accounting standards as written policy documents covering aspects of financial reporting like recognition, measurement, presentation and disclosure of accounting transactions. The objectives of accounting standards are to ensure transparency, comparability and reliability of financial reporting. They standardize accounting policies and principles. In India, the Accounting Standards Board of ICAI issues accounting standards. Certain exemptions and relaxations apply to small and medium sized entities in complying with accounting standards.
The document discusses accounting standards and their formulation in India. It provides context on the need for harmonization of accounting policies and practices within a country and internationally. It describes the role of various standard setting bodies in India like the Accounting Standards Board and their objectives in formulating accounting standards. The document also explains the accounting standard setting process and lists the various accounting standards issued by the ASB.
Introduction To Financial Statements And Auditimranbg1
The document provides an introduction to financial statements and the audit process. It defines financial statements as a structured representation of a company's financial position and performance that provides useful information to decision makers. The key components of financial statements are identified as the balance sheet, income statement, statement of cash flows, and notes. Regulatory requirements for preparing and auditing financial statements in Pakistan are outlined for different types of companies. The objectives and need for auditing financial statements are discussed. Important areas of the balance sheet like property, investments, loans, stock, and liabilities are also briefly covered.
Introduction to Accounting Standards_7iWCuHN.pdfPriyaGhosh47
The document discusses accounting standards, including:
1. The objectives and benefits of accounting standards such as standardizing accounting treatments and improving comparability.
2. The standards setting process in India, which involves identification of areas for standards, drafting standards, public comments, and finalization.
3. The status of accounting standards in India, which are developed by ICAI's Accounting Standards Board and notified by the Ministry of Corporate Affairs.
4. The need for convergence with global standards like IFRS to facilitate cross-border investment and improve confidence in financial reporting.
Conversion Ind AS (the converged IFRS standards) in India Dr Biswadev Dash
02/01/2015 when the Press Information Bureau, Government of India, Ministry of Corporate Affairs (MCA) issued a note outlining the various phases in which Indian Accounting Standards converged with IFRS (Ind AS) is proposed to be implemented in India it was a landmark reforms in accounting & reporting sector. With this the Companies other than Banking Companies, Insurance Companies and NBFCs will be covered. Indian Accounting standard is highly precise. Thus Conversion Ind AS (the converged IFRS standards) in India may significantly affect a company’s day-to-day operations and may even impact the reported profitability of the business itself. Of course Conversion brings a one-time opportunity to comprehensively streamline the financial reporting.
Financial and managerial accounting the basis for business decisions 18th edi...KrisWu123
This document provides an overview of Chapter 2 from the textbook "Financial and Managerial Accounting The Basis for Business Decisions 18th Edition Williams".
The chapter introduces the key financial statements - the balance sheet, income statement, and statement of cash flows. It discusses the accounting equation and how business transactions impact the elements of assets, liabilities, and owners' equity. The chapter also covers accounting principles related to asset valuation and different forms of business organization. Learning objectives are provided to explain the nature and purpose of the financial statements and how they are used.
Introduction To Financial Statements And AuditMobasher Ali
The document provides an introduction to financial statements and auditing. It discusses the purpose of financial statements which is to provide useful information to users for decision making. A complete set of financial statements includes a balance sheet, income statement, statement of changes in equity, cash flow statement, and notes. The document also outlines the regulatory requirements for auditing financial statements in Pakistan for various types of entities. The objective of an audit is to express an opinion on whether the financial statements present fairly in accordance with accounting standards.
This document provides an overview of accounting standards and guidance notes. It defines accounting standards as written policy documents covering aspects of financial reporting like recognition, measurement, presentation and disclosure of accounting transactions. The objectives of accounting standards are to ensure transparency, comparability and reliability of financial reporting. They standardize accounting policies and principles. In India, the Accounting Standards Board of ICAI issues accounting standards. Certain exemptions and relaxations apply to small and medium sized entities in complying with accounting standards.
accounting report on Mutual Trust Bank muna_tasneem
The document provides an overview of the consolidated financial statements of Mutual Trust Bank for the year ended 2011. It discusses the accounting standards and rules that were applied in preparing the financial statements, including BAS, BFRS, and standards around inventories, cash flows, policies, taxes, and more. It also provides background information on Mutual Trust Bank, including its subsidiaries, mission, vision, financial highlights for 2014, and components of financial statements like the balance sheet, income statement, and statement of cash flows.
This document provides an overview of the framework of accounting. It defines accounting and discusses its objectives and functions. It explains key concepts in accounting like fundamental assumptions, qualitative characteristics, accounting principles, and conventions. It also describes the components of financial statements and their objective of providing useful information to users. The key points are:
1. Accounting is defined as the process of identifying, recording, classifying, summarizing and interpreting financial transactions and events.
2. The objectives of accounting are to systematically record transactions, ascertain financial results and position, and provide information to users for decision making.
3. Fundamental assumptions in accounting include going concern, consistency, and accrual.
4. Financial statements comprise
Lecture 1 Intro to financial Analysis.pptAliHadi319773
This document provides an introduction to financial statements and auditing. It covers the purpose and components of financial statements, including the balance sheet, income statement, statement of changes in equity, and cash flow statement. It discusses the objectives of an audit and regulatory requirements for auditing financial statements in Pakistan. It also outlines basic accounting principles like fair presentation, going concern, and accrual basis. Finally, it reviews key areas of the balance sheet like property and equipment, investments, loans and advances, and contingencies. The overall document provides a high-level overview of financial statements, auditing, and balance sheet accounts.
The document provides an introduction to financial statements, why they are audited, and basic accounting principles. It discusses that financial statements are a structured representation of a company's financial position and performance that provide useful information to decision makers. It also notes that audits are required by regulations to independently evaluate the fairness of financial statements. Finally, it outlines some key accounting principles like fair presentation, going concern assumption, and accrual basis of accounting.
This document contains information about an MBA program session from July/August 2021, including course details and student responses to assignments. The assignments include discussing 5 accounting concepts with examples, preparing a trading account, and distinguishing between management accounting and financial accounting. It also includes the balance sheet of a company and calculations of debt-equity and proprietary ratios based on the information provided. The purpose of a cash flow statement is to analyze changes in a company's cash position and the sources and uses of cash. Examples of cash flows include receipts from customers and payments to suppliers for operating activities.
Role of Financial Statements
Auditors Report
Management Discussion and Analysis
Balance Sheet
Statement of Profit and Loss
Cash Flow statement
Accounting Polices
How to define Assets , Liabilities , Investments , Revenues , Expenses , Taxes, Cash Flow statements
Generally accepted accounting principlessanjoygiri
Introduction of Generally Accepted Accounting Principles: These widely accepted accounting principles that are generally recognized by almost all the persons associated with accounting along with representation of accepted accounting practices are known as ” Generally Accepted Accounting Principles”.
It is the summation of all theories, doctrine, conventions, or principles closely related to the accounting which got global recognition.
United States Surgical Corporation was accused of improper revenue recognition practices by recognizing sales before products were delivered to customers; an SEC investigation found the company had prematurely recognized $75 million in sales over 2 years to meet earnings targets, resulting in restatement of financial statements and a $10 million civil penalty for the company. The case highlighted the importance of following GAAP for revenue recognition and the dangers of succumbing to pressure to meet earnings expectations through improper accounting practices.
What are the basic components of the conceptual framework What are .pdfanaxeetech
What are the basic components of the conceptual framework? What are your opinion about the
success of the conceptual framework
Solution
Conceptual Framework Underlying Financial Accounting
The development of accounting standards or any other accounting guidelines need a foundation
of underlying principles. In July 1989, The International Accounting Standards Committee
(IASC) issued a \"Conceptual Framework\" to serve as a basis for accounting standards. The
Accounting Standards Board of the ICAI has issued a similar framework for same purpose in
July 2000. This framework serves as a constitution and provides the fundamental basis for
development of new accounting standards as also for review of existing standards. The principle
areas covered by the framework are as follows:
Components of financial statements
>Balance sheet
>Profit & Loss A/c
>Cash Flow Statement
>Notes & Schedules to Accounts
Objectives of Financial Statements:
Objectives require financial statements to show the results of business operations and
stewardship or accountability of the management in respect of resources entrusted to it, to the
diversified stakeholders of the business.
Assumptions Underlying Financial statements:
Three fundamental accounting assumptions are as follows:
>Going Concern
>Consistency
>Accrual
Qualitative Characteristics of Financial Statements:
>Understandability
>Relevance
>Reliability
>Comparability
>True & Fair View
Elements of Financial Statements:
The five financial elements are assets, Liabilities, Equity, Income/Gains, and Expenses/losses.
Principles of Measurement of Financial Statements:
Measurement is the process of determining money value at which an element can be recognised
in the balance Sheet or statement of profit or loss. The framework recognises four alternative
bases for the purpose. These bases relate explicitly to the valuation of assets and liabilities. In
preparation of financial statements, all or any of the below can be used in varying combinations
to assign money values to financial items:
(a) Historical Values
(b) Current Cost
(c) Realisable(Settlement) Value and
(d) Present Value
PURPOSE OF THE FRAMEWORK
The framework sets out the concepts underlying the preparation and presentation of general
purpose financial statements prepared by enterprises for external users.
The main purpose of the framework is:
(a). To assists enterprises in preparation of their financial statements in compliance with the
accounting standard and in dealing with the topics not yet covered by any accounting standard.
(b). To assists ASB in its task of development and review of accounting standards.
(c). To assists ASB in promoting harmonisation of regulations, accounting standards and
procedures relating to the preparation and presentation of financial statement by providing a
basis for reducing the number of alternative accounting treatments permitted by accounting
standards.
(d). To assists auditors in forming an opinion as to whether financial sta.
This document discusses cash flow statements, creative accounting, and historical cost accounting. It analyzes the cash flow statement of British Assets Trust PLC using the indirect method. It finds the company's liquidity position is acceptable despite some negative working capital ratios. The document also defines creative accounting as manipulating figures within accounting principles and notes it can be used to manage earnings pressure. Finally, it compares historical cost accounting to current cost and real terms accounting methods that adjust for inflation.
Financial accounting 17th edition williams solutions manualKrisWu123
Download at: https://goo.gl/VEVubs
financial and managerial accounting 17th edition solutions pdf
financial and managerial accounting 16th edition answers
financial and managerial accounting 17th edition solutions free
financial and managerial accounting solutions pdf
financial and managerial accounting the basis for business decisions 17th edition solutions
financial and managerial accounting 16th edition solutions pdf
financial accounting solution manual pdf
financial and managerial accounting 16th edition answers pdf
This document provides information about cash flow statements, including how they are prepared and their importance. It discusses:
- Cash flow statements show cash receipts, payments, and changes in cash balance over a period of time, usually quarterly or annually. They show how a company generates and uses cash.
- The key difference between a cash flow statement and funds flow statement is that cash flow statements only consider cash, while funds flow statements use a broader definition of funds that includes current assets and liabilities.
- Cash flow statements are important for short-term financial planning as they show if a company will have enough cash to pay debts, dividends, and maintain operations. They also allow comparison of a company's
Financial statements of a Company are the introductory and formal periodic reports through which the commercial operation communicates fiscal information to its possessors and colourful other external parties which include investors, duty authorities, government, workers, etc. These typically relate to (a) the balance distance ( position statement) at the end of the counting period, and (b) the statement of profit and loss of a. company. Nowadays, the cash inflow statement is also taken as an integral element of the financial statements of a company.
This document provides an overview of financial accounting. It defines accounting and outlines its key objectives, features, scope and importance. It discusses accounting concepts and principles, conventions and standards. The document is part of a course on financial accounting for B.Com/BBA students in the II semester at the University of Calicut School of Distance Education. It covers topics such as the meaning and definition of accounting, the objectives and features of accounting, accounting concepts, principles and conventions, and the role of the Accounting Standards Board of India.
This document provides an overview of chapter 1 of an accounting textbook, including a table of topics covered in the chapter and case/question assignments. It also includes sample solutions to codification exercises and answers to questions about the development of accounting standards and standard-setting bodies in the United States.
1) Accounting provides financial information to various users through recording, classifying, and summarizing financial transactions and interpreting results.
2) For accounting information to be meaningful and useful, it must be reliable and comparable. Consistency in accounting policies, principles, and practices allows for inter-firm and inter-period comparisons.
3) A proper theory base of accounting, including principles, concepts, rules, and standards, brings uniformity and consistency to the accounting process. The Generally Accepted Accounting Principles and basic accounting concepts form the foundation of the theory base.
1) Accounting provides financial information to various users through financial statements prepared in accordance with accounting principles and concepts.
2) Key concepts include business entity, money measurement, going concern, accounting period, and cost which guide uniform recording and presentation of transactions and events.
3) Consistency, comparability, and transparency are important to make accounting information useful for decision making. Standards and principles ensure reliability and comparability.
This document provides an overview of the Financial Accounting and Analysis course for the first semester of a BBA program. It covers key topics like the meaning and scope of accounting, objectives of accounting, accounting principles and conventions, branches of accounting, limitations of accounting, and accounting standards in India and internationally (IFRS). The course is taught by Ms. Shivani Arora and covers 19 slides on these fundamental accounting concepts.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
accounting report on Mutual Trust Bank muna_tasneem
The document provides an overview of the consolidated financial statements of Mutual Trust Bank for the year ended 2011. It discusses the accounting standards and rules that were applied in preparing the financial statements, including BAS, BFRS, and standards around inventories, cash flows, policies, taxes, and more. It also provides background information on Mutual Trust Bank, including its subsidiaries, mission, vision, financial highlights for 2014, and components of financial statements like the balance sheet, income statement, and statement of cash flows.
This document provides an overview of the framework of accounting. It defines accounting and discusses its objectives and functions. It explains key concepts in accounting like fundamental assumptions, qualitative characteristics, accounting principles, and conventions. It also describes the components of financial statements and their objective of providing useful information to users. The key points are:
1. Accounting is defined as the process of identifying, recording, classifying, summarizing and interpreting financial transactions and events.
2. The objectives of accounting are to systematically record transactions, ascertain financial results and position, and provide information to users for decision making.
3. Fundamental assumptions in accounting include going concern, consistency, and accrual.
4. Financial statements comprise
Lecture 1 Intro to financial Analysis.pptAliHadi319773
This document provides an introduction to financial statements and auditing. It covers the purpose and components of financial statements, including the balance sheet, income statement, statement of changes in equity, and cash flow statement. It discusses the objectives of an audit and regulatory requirements for auditing financial statements in Pakistan. It also outlines basic accounting principles like fair presentation, going concern, and accrual basis. Finally, it reviews key areas of the balance sheet like property and equipment, investments, loans and advances, and contingencies. The overall document provides a high-level overview of financial statements, auditing, and balance sheet accounts.
The document provides an introduction to financial statements, why they are audited, and basic accounting principles. It discusses that financial statements are a structured representation of a company's financial position and performance that provide useful information to decision makers. It also notes that audits are required by regulations to independently evaluate the fairness of financial statements. Finally, it outlines some key accounting principles like fair presentation, going concern assumption, and accrual basis of accounting.
This document contains information about an MBA program session from July/August 2021, including course details and student responses to assignments. The assignments include discussing 5 accounting concepts with examples, preparing a trading account, and distinguishing between management accounting and financial accounting. It also includes the balance sheet of a company and calculations of debt-equity and proprietary ratios based on the information provided. The purpose of a cash flow statement is to analyze changes in a company's cash position and the sources and uses of cash. Examples of cash flows include receipts from customers and payments to suppliers for operating activities.
Role of Financial Statements
Auditors Report
Management Discussion and Analysis
Balance Sheet
Statement of Profit and Loss
Cash Flow statement
Accounting Polices
How to define Assets , Liabilities , Investments , Revenues , Expenses , Taxes, Cash Flow statements
Generally accepted accounting principlessanjoygiri
Introduction of Generally Accepted Accounting Principles: These widely accepted accounting principles that are generally recognized by almost all the persons associated with accounting along with representation of accepted accounting practices are known as ” Generally Accepted Accounting Principles”.
It is the summation of all theories, doctrine, conventions, or principles closely related to the accounting which got global recognition.
United States Surgical Corporation was accused of improper revenue recognition practices by recognizing sales before products were delivered to customers; an SEC investigation found the company had prematurely recognized $75 million in sales over 2 years to meet earnings targets, resulting in restatement of financial statements and a $10 million civil penalty for the company. The case highlighted the importance of following GAAP for revenue recognition and the dangers of succumbing to pressure to meet earnings expectations through improper accounting practices.
What are the basic components of the conceptual framework What are .pdfanaxeetech
What are the basic components of the conceptual framework? What are your opinion about the
success of the conceptual framework
Solution
Conceptual Framework Underlying Financial Accounting
The development of accounting standards or any other accounting guidelines need a foundation
of underlying principles. In July 1989, The International Accounting Standards Committee
(IASC) issued a \"Conceptual Framework\" to serve as a basis for accounting standards. The
Accounting Standards Board of the ICAI has issued a similar framework for same purpose in
July 2000. This framework serves as a constitution and provides the fundamental basis for
development of new accounting standards as also for review of existing standards. The principle
areas covered by the framework are as follows:
Components of financial statements
>Balance sheet
>Profit & Loss A/c
>Cash Flow Statement
>Notes & Schedules to Accounts
Objectives of Financial Statements:
Objectives require financial statements to show the results of business operations and
stewardship or accountability of the management in respect of resources entrusted to it, to the
diversified stakeholders of the business.
Assumptions Underlying Financial statements:
Three fundamental accounting assumptions are as follows:
>Going Concern
>Consistency
>Accrual
Qualitative Characteristics of Financial Statements:
>Understandability
>Relevance
>Reliability
>Comparability
>True & Fair View
Elements of Financial Statements:
The five financial elements are assets, Liabilities, Equity, Income/Gains, and Expenses/losses.
Principles of Measurement of Financial Statements:
Measurement is the process of determining money value at which an element can be recognised
in the balance Sheet or statement of profit or loss. The framework recognises four alternative
bases for the purpose. These bases relate explicitly to the valuation of assets and liabilities. In
preparation of financial statements, all or any of the below can be used in varying combinations
to assign money values to financial items:
(a) Historical Values
(b) Current Cost
(c) Realisable(Settlement) Value and
(d) Present Value
PURPOSE OF THE FRAMEWORK
The framework sets out the concepts underlying the preparation and presentation of general
purpose financial statements prepared by enterprises for external users.
The main purpose of the framework is:
(a). To assists enterprises in preparation of their financial statements in compliance with the
accounting standard and in dealing with the topics not yet covered by any accounting standard.
(b). To assists ASB in its task of development and review of accounting standards.
(c). To assists ASB in promoting harmonisation of regulations, accounting standards and
procedures relating to the preparation and presentation of financial statement by providing a
basis for reducing the number of alternative accounting treatments permitted by accounting
standards.
(d). To assists auditors in forming an opinion as to whether financial sta.
This document discusses cash flow statements, creative accounting, and historical cost accounting. It analyzes the cash flow statement of British Assets Trust PLC using the indirect method. It finds the company's liquidity position is acceptable despite some negative working capital ratios. The document also defines creative accounting as manipulating figures within accounting principles and notes it can be used to manage earnings pressure. Finally, it compares historical cost accounting to current cost and real terms accounting methods that adjust for inflation.
Financial accounting 17th edition williams solutions manualKrisWu123
Download at: https://goo.gl/VEVubs
financial and managerial accounting 17th edition solutions pdf
financial and managerial accounting 16th edition answers
financial and managerial accounting 17th edition solutions free
financial and managerial accounting solutions pdf
financial and managerial accounting the basis for business decisions 17th edition solutions
financial and managerial accounting 16th edition solutions pdf
financial accounting solution manual pdf
financial and managerial accounting 16th edition answers pdf
This document provides information about cash flow statements, including how they are prepared and their importance. It discusses:
- Cash flow statements show cash receipts, payments, and changes in cash balance over a period of time, usually quarterly or annually. They show how a company generates and uses cash.
- The key difference between a cash flow statement and funds flow statement is that cash flow statements only consider cash, while funds flow statements use a broader definition of funds that includes current assets and liabilities.
- Cash flow statements are important for short-term financial planning as they show if a company will have enough cash to pay debts, dividends, and maintain operations. They also allow comparison of a company's
Financial statements of a Company are the introductory and formal periodic reports through which the commercial operation communicates fiscal information to its possessors and colourful other external parties which include investors, duty authorities, government, workers, etc. These typically relate to (a) the balance distance ( position statement) at the end of the counting period, and (b) the statement of profit and loss of a. company. Nowadays, the cash inflow statement is also taken as an integral element of the financial statements of a company.
This document provides an overview of financial accounting. It defines accounting and outlines its key objectives, features, scope and importance. It discusses accounting concepts and principles, conventions and standards. The document is part of a course on financial accounting for B.Com/BBA students in the II semester at the University of Calicut School of Distance Education. It covers topics such as the meaning and definition of accounting, the objectives and features of accounting, accounting concepts, principles and conventions, and the role of the Accounting Standards Board of India.
This document provides an overview of chapter 1 of an accounting textbook, including a table of topics covered in the chapter and case/question assignments. It also includes sample solutions to codification exercises and answers to questions about the development of accounting standards and standard-setting bodies in the United States.
1) Accounting provides financial information to various users through recording, classifying, and summarizing financial transactions and interpreting results.
2) For accounting information to be meaningful and useful, it must be reliable and comparable. Consistency in accounting policies, principles, and practices allows for inter-firm and inter-period comparisons.
3) A proper theory base of accounting, including principles, concepts, rules, and standards, brings uniformity and consistency to the accounting process. The Generally Accepted Accounting Principles and basic accounting concepts form the foundation of the theory base.
1) Accounting provides financial information to various users through financial statements prepared in accordance with accounting principles and concepts.
2) Key concepts include business entity, money measurement, going concern, accounting period, and cost which guide uniform recording and presentation of transactions and events.
3) Consistency, comparability, and transparency are important to make accounting information useful for decision making. Standards and principles ensure reliability and comparability.
This document provides an overview of the Financial Accounting and Analysis course for the first semester of a BBA program. It covers key topics like the meaning and scope of accounting, objectives of accounting, accounting principles and conventions, branches of accounting, limitations of accounting, and accounting standards in India and internationally (IFRS). The course is taught by Ms. Shivani Arora and covers 19 slides on these fundamental accounting concepts.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
13 Jun 24 ILC Retirement Income Summit - slides.pptxILC- UK
ILC's Retirement Income Summit was hosted by M&G and supported by Canada Life. The event brought together key policymakers, influencers and experts to help identify policy priorities for the next Government and ensure more of us have access to a decent income in retirement.
Contributors included:
Jo Blanden, Professor in Economics, University of Surrey
Clive Bolton, CEO, Life Insurance M&G Plc
Jim Boyd, CEO, Equity Release Council
Molly Broome, Economist, Resolution Foundation
Nida Broughton, Co-Director of Economic Policy, Behavioural Insights Team
Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute for Fiscal Studies
Joanna Elson CBE, Chief Executive Officer, Independent Age
Tom Evans, Managing Director of Retirement, Canada Life
Steve Groves, Chair, Key Retirement Group
Tish Hanifan, Founder and Joint Chair of the Society of Later life Advisers
Sue Lewis, ILC Trustee
Siobhan Lough, Senior Consultant, Hymans Robertson
Mick McAteer, Co-Director, The Financial Inclusion Centre
Stuart McDonald MBE, Head of Longevity and Democratic Insights, LCP
Anusha Mittal, Managing Director, Individual Life and Pensions, M&G Life
Shelley Morris, Senior Project Manager, Living Pension, Living Wage Foundation
Sarah O'Grady, Journalist
Will Sherlock, Head of External Relations, M&G Plc
Daniela Silcock, Head of Policy Research, Pensions Policy Institute
David Sinclair, Chief Executive, ILC
Jordi Skilbeck, Senior Policy Advisor, Pensions and Lifetime Savings Association
Rt Hon Sir Stephen Timms, former Chair, Work & Pensions Committee
Nigel Waterson, ILC Trustee
Jackie Wells, Strategy and Policy Consultant, ILC Strategic Advisory Board
An accounting information system (AIS) refers to tools and systems designed for the collection and display of accounting information so accountants and executives can make informed decisions.
How to Invest in Cryptocurrency for Beginners: A Complete GuideDaniel
Cryptocurrency is digital money that operates independently of a central authority, utilizing cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies are decentralized and typically operate on a technology called blockchain. Each cryptocurrency transaction is recorded on a public ledger, ensuring transparency and security.
Cryptocurrencies can be used for various purposes, including online purchases, investment opportunities, and as a means of transferring value globally without the need for intermediaries like banks.
Discovering Delhi - India's Cultural Capital.pptxcosmo-soil
Delhi, the heartbeat of India, offers a rich blend of history, culture, and modernity. From iconic landmarks like the Red Fort to bustling commercial hubs and vibrant culinary scenes, Delhi's real estate landscape is dynamic and diverse. Discover the essence of India's capital, where tradition meets innovation.
Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
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43441asb33184b.pdf
1. www.icai.org
The Institute of Chartered Accountants of India
(Set up by an Act of the Parliament)
New Delhi
ISBN : 978-81-8441-852-1
Guidance Note on Combined and
Carve-out Financial Statements
January/2017/P0000 (New)
GN (A) 37
2. Guidance Note on Combined and
Carve-out Financial Statements
The Institute of Chartered Accountants of India
(Set up by an Act of Parliament)
New Delhi
4. Foreword
Financial Statements of an entity provides very significant information to various
stakeholders about the entity. Depending on the size of an entity and the
intricacies of its business, the financial statements could be a bit complex,
particularly if the entity has several subsidiaries. An entity with a controlling
interest in a subsidiary consolidates the financial statements of its subsidiary into
its own financial statements. Consolidated financial statements aggregate the
financial position of an entity and its subsidiaries. This allows an investor to
overview the entity in a holistic manner rather than viewing the individual entity’s
financial statements separately. However, there may be events such as take-
overs, demergers, spin-offs of entities and/or divisions/segments/businesses,
initial public offerings, etc. where any specific financial information is required for
part or parts of entities which may or may not be a part of an entity’s group. In
the case where there is absence of control, preparation of consolidated financial
statements will not be appropriate. In such cases, as well as to present specific
financial information, sometimes combined/carve-out financial statements are
prepared for part or parts of one or more entities.
The preparation of combined financial statements is a challenging process that
can require the exercise of considerable judgement. This Guidance Note is an
endeavour to prescribe guidance for accounting in case of combined/carve-out
financial statements and to assist in the preparation of combined/carve-out
financial statements.
I would like to place on record my deep appreciation to CA. S.B. Zaware,
Chairman, CA. M.P.Vijay Kumar, Vice-Chairman and other members of the
Accounting Standards Board for their valuable contribution in the preparation of
this Guidance Note.
I hope the concepts of combined/carve-out financial statements are understood
and Guidance Note proves to be very useful.
New Delhi CA. M. Devaraja Reddy
January 11, 2017 President
5.
6. Preface
The Institute of Chartered Accountants of India through its Accounting
Standards Board plays a proactive role by providing guidance on the
various accounting issues raised from time to time. In this regard, it may
be noted that SEBI constituted a ‘Committee for Accounting Norms’ for
REITs and InvITs for examining and formulating the accounting and
auditing norms for the listed REITs and InvITs. The Committee constituted
various Sub-groups. One of the Sub-groups on ‘Disclosures in Offer
Document’, submitted its report on disclosure of financial statements and
other financial information in offer document which, inter-alia, requires the
preparation of Combined Financial Statements in certain circumstances.
Since no guidance was available on the combined/carve-out financial
statements in the Indian GAAP, the need for issuing guidance in this
regard was felt. In this context, a general guidance on combined/carve-out
financial statements was decided to be issued by ICAI, which was decided
to be made applicable not only in the context of REITs/ and InvITs but to
other transactions of specific nature also, such as, disposals, distributions,
spin-offs, initial public offerings (IPOs), etc., where a specific type of
financial information may be required. The financial information may be
needed for part(s) of a group where the preparation of consolidated
financial statements would not be appropriate. In such cases
combined/carve-out financial statements are required to be prepared.
The Accounting Standards Board of the ICAI has decided to bring out this
publication to guide the stakeholders regarding various aspects related to
combined and carve-out financial statements. The Guidance Note deals
with the meaning of combined/carve-out financial statements, indicative
situations in which these may be required to be prepared, procedure for
preparation of the same and required disclosures.
I would like to place on record special thanks to our Honourable President
CA. M. Devaraja Reddy and Vice-President CA. Nilesh Vikamsey for
providing an opportunity of bringing out this Guidance Note. I am also
thankful to CA. M. P. Vijaykumar, Vice-Chairman, Accounting Standards
Board for his support and efforts in all the endeavours of the Board. I
would also like to thank members of Study Group for their efforts in
preparing the Guidance Note, viz., CA. Anand Banka, CA. Anand
7. Subramanian, CA. Santosh Maller, CA. Sai Venkateshwaran, Mr. Akshay
Bhandari, CA. K.Sairam and CA. Sudhir Soni Murlidhar. I would also like
to thank members of the Accounting Standards Board for their valuable
inputs in bringing out this Guidance Note.
I am confident that this Guidance Note would be useful to all concerned.
New Delhi CA. S. B. Zaware
January 13, 2017 Chairman
Accounting Standards Board
8. Contents
1. Introduction 1
2. Objective & Scope 2
3. Definitions 2
4. Circumstances in which Combined/Carve-out Financial Statements
may be prepared 3
5. Preparation of Combined Financial Statements 4
6. Procedure for preparation of Carve-out Financial Statements 6
7. Aspects common to Combined/Carve-out Financial Statements 9
8. Disclosures 10
9.
10. Guidance Note on Combined and Carve-out
Financial Statements
Introduction
1. Generally, consolidated financial statements of an entity are required to be
presented under the relevant legal or regulatory requirements. In India,
these requirements are met by presenting consolidated financial
statements prepared under the applicable Accounting Standards.
2. There may be occasions such as take-overs of entities and/or
divisions/segments/businesses, demergers, spin-offs, initial public
offerings, etc. where specific financial information is required for part or
parts of entities which may or may not be part of a group. Similarly, group
financials may be required for group loan arrangements. The term ‘group’,
in such cases, for the purpose of this Guidance Note may include the
entities and/or divisions/segments/businesses which are being combined
as per the terms of the loan arrangement. In the absence of control,
preparation of consolidated financial statements would not be appropriate.
In such cases, as well as to present relevant combined financial
information of part or parts of one or more entities, combined financial
statements may be prepared. In certain circumstances, carve-out financial
statements provide additional financial information for a part of an entity,
such as, in case of demerger, spin-off, etc.
3. The combined/carve-out financial statements can include financial
information pertaining to different entities, divisions, branches and/or an
aggregation of similar assets, associated liabilities and operations in a
specified geographic region or line of business pertaining to different
entities. These financial statements can be prepared by aggregating
financial statements of segments, separate entities or components of
groups which may not necessarily have separate management and
accounting records.
4. Combining businesses for which combined financial statements are
prepared are generally under a common control of an entity, or a person;
or the management; or they might be undertaking some common
business. However, combined financial statements for
11. 2
combining businesses can be prepared in other situations apart from
these circumstances also.
5. Preparing combined/carve-out financial statements involve areas of
judgement, driven by the purpose for which the statements are prepared.
Objective
6. This Guidance Note provides the meaning of combined/carve-out financial
statements, indicative situations in which these may be required to be
prepared and procedure for preparation of the same and required
disclosures.
Scope
7. This Guidance Note applies in the preparation and presentation of
combined/carve-out financial statements.
8. This Guidance Note should not be construed to be applicable to the
general purpose financial statements as the combined/carve-out financial
statements are prepared for specific purposes and, therefore, are ‘special
purpose financial statements’.
Definitions
9. The following terms are used in this Guidance Note with the meanings
specified:
Carve-out business: For the purpose of this Guidance Note and
notwithstanding the definition of ‘business’ as contained in Ind AS 103,
Business Combinations, the term ‘carve-out business’ refers to an
identifiable set of assets and liabilities, pertaining to an economic
activity carved out of the aggregate activities of an entity. A division,
segment, or business activity of an entity may also signify a carve-out
business.
Carve-out Financial Statements: Carve-out financial statements are
the financial statements pertaining to a carve-out business.
Combined Financial Statements: Combined financial statements are
the financial statements that present the combined historical financial
12. 3
information of combining businesses that do not comprise a group for
which the consolidated financial statements can be prepared.
Combining businesses: For the purpose of this Guidance Note and
notwithstanding the definition of ‘business’ as contained in Ind AS 103,
Business Combinations, the term ‘combining businesses’ refers to two
or more entities and/or divisions/segments/businesses of the same or
different entities, historical financial informations in respect of which are
being aggregated for the purpose of preparation of combined financial
statements.
Common Control: Combining businesses are said to be under
common control when all the combining entities are ultimately controlled
by the same party or parties and that control is not transitory.
Financial Statements: For the purpose of this Guidance Note,
combined/carve-out financial statements are the complete set of
financial statements that are required to be prepared by the applicable
Accounting Standards.
Remaining Group: Entities or part of entities other than the carve-out
business in respect of which carve-out financial statements are
prepared.
10. The terms used in this Guidance Note and not defined in this Guidance
Note have the same meaning as those defined in the relevant Accounting
Standards, and, in absence thereof, those defined in the Guidance Notes
issued by the Institute of Chartered Accountants of India, unless the
context requires otherwise.
Circumstances in which Combined/Carve-out Financial
Statements may be prepared
11. Combined financial statements can be prepared in cases where:
a) two or more entities are combined in their entirety; or
b) two or more carve-out businesses of the same or different entities
are combined; or
c) one or more entities are combined with one or more carve-out
businesses.
13. 4
12. Following are the examples where combined financial statements for
combining businesses may be required to be prepared:
a) transactions such as acquisition or disposition
negotiations/agreement; for instance, a group of entities which do
not form a group from a legal point of view, but are the subject
matter of an acquisition or disposal;
b) filings in accordance with statutory or regulatory requirements,
e.g., initial public offerings by Real Estate Investment Trusts,
Infrastructure Investment Trusts etc.;
c) circumstances in which combined financial statements of
commonly controlled entities are likely to be more meaningful than
their separate financial statements. For example, combined
financial statements would be useful if one or more individuals
control several entities that are related/unrelated in their
operations.
d) where two or more companies under the same group are required
to prepare combined financial statements, for the purpose of
borrowings from banks or other financial institutions, e.g., common
loan arrangements.
13. Carve-out financial statements may be prepared for one or more divisions,
segments, businesses, etc. of the same entity. Examples where carve-out
financial statements may be required to be prepared are demerger, spin-
off, hiving off or any other related restructuring of a
segment/divisions/business of the same entity or acquisition of a
segment/division/business of another entity.
Preparation of Combined Financial Statements
Procedure for preparation of combined financial statements for two
or more entities
14. The guidance given in paragraphs 15 and 16 is applicable for preparation
of combined financial statements for combining businesses of two or more
entities in their entirety.
14. 5
15. The procedure for preparing combined financial statements of the
combining entities is the same as that for consolidated financial
statements as per the applicable Accounting Standards. Accordingly,
when combined financial statements are prepared, intra-group
transactions and profits or losses should be eliminated, and non-
controlling interests, foreign operations, different financial reporting
periods, accounting policies or income taxes should be treated in the
same manner as in consolidated financial statements prepared under the
applicable Accounting Standards.
16. In case the combining entities or any one of the combining entities are
under common control, the carrying amounts pertaining to a subsidiary, as
reflected in the consolidated financial statements of the parent, should be
used for the purpose of preparing combined financial statements.
Example: A Ltd. has three subsidiaries viz. X Ltd, Y Ltd. and Z Ltd. X
Ltd. has better creditworthiness and approaches the bank for loan which
will be used by both X Ltd. and Y Ltd. Bank requires combined financial
statements of X Ltd. and Y Ltd. to be prepared for loan appraisal
purposes. Combined financial statements of X Ltd. and Y Ltd. should be
prepared using the amounts contained in A Ltd.’s consolidated financial
statements pertaining to subsidiaries X Ltd. and Y Ltd.
Procedure for preparation of combined financial statements where
at least one of the combining businesses is a carve-out business
17. Combined financial statements can be prepared reflecting aggregate
historical financial information of two or more carve-out businesses of
same or different entities; or one or more entities with one or more carve-
out businesses.
Examples:
A toll road project of company A Ltd. having various other
projects is sought to be combined with a toll road project of
another Company B; each of the companies has remaining
projects which continue to operate independently.
A toll road project of company A Ltd. having various other
projects is sought to be combined with a wind-mill project of the
15. 6
same company; remaining projects continue to operate
independently.
X. Ltd. which is a subsidiary of A. Ltd. is sought to be combined
with a toll road project of A Ltd; remaining projects of A. Ltd
continue to operate independently.
X. Ltd. which is a subsidiary of A. Ltd. is sought to be combined
with toll road projects of A Ltd. and B Ltd; remaining projects of
A Ltd. and B. Ltd continue to operate independently.
18. Financial statements prepared in such situations are combined financial
statements irrespective of the fact that they involve one or more carve-out
businesses as the combining businesses.
19. The procedure for preparing combined financial statements where at least
one of the combining businesses is a carve-out business is as contained,
hereinafter, in this Guidance Note. Thereafter, two or more combining
businesses including carve-out businesses for which carve-out financial
statements have been prepared are combined using the procedures
similar to those for preparing consolidated financial statements as per the
applicable Accounting Standards as explained in paragraphs 15 and 16
above.
Procedure for preparation of Carve-out Financial
Statements
20. Where the information with regard to carve-out business is required,
carve-out financial statements may have to be prepared. For preparing
carve-out financial statements, difficulties in allocation may arise, for
example, payroll accounting where a group of employees provides
services for a particular carve-out business as well as for the remaining
group, e.g., centralised purchasing, marketing, rent, advertising, legal,
insurance, management expenses, etc.
Basis for allocating transaction amounts and balances
21. Where transactions or balances are not directly identifiable to the carve-
out assets and liabilities and income and expenses pertaining to the
concerned projects (collectively termed as ‘carve-out business’), it will be
desirable to develop methods for allocating the relevant amounts to the
16. 7
carve-out business with a view to providing the fairest approximation to
the amounts actually attributable to the carve-out business. An
appropriate method can be adopted and applied for allocation purposes
along with a disclosure of the basis adopted for allocation.
Example: Allocation of brand cost amongst various segments when only
one segment is being carved-out while other segments also use the
brand. In such case, brand cost may be allocated on an appropriate
basis with disclosure of the basis adopted for allocation.
22. The appropriate basis for allocating common income and expenditure to a
carve-out business will vary according to the circumstances. For instance,
centrally accounted-for salaries and other related costs including
retirement benefits may be allocated on the basis of headcount; however,
relative levels of staff turnover or other factors also need consideration.
Similarly, the costs of a head office accounts department may be allocated
based on the relevant sizes of the carve-out business and remaining
group. However, if other factors suggest that size is not a good basis, for
example, a disproportionate number of the accounting team is engaged in
work for one part of the business and not the other, any other basis might
be considered appropriate for the purpose of allocation.
23. Assets may be allocated on the basis of control, usage, legal ownership or
any other appropriate basis.
24. The basis of allocation of a group third party debt assumed by the carve-
out business may be by reference to the terms of the separation
agreement. In other cases, the debt may be treated as part of the carve-
out business where the debt can be related to that business.
25. Finance lease liabilities may be allocated in line with the allocation of the
related assets.
26. The allocation of the income and expenses generally move with the
related assets and liabilities.
Example: The allocation of interest income and expenses would follow
the way in which the related instruments have been apportioned.
27. The purpose of the allocation is to attribute an appropriate element to the
carve-out business and not to measure and recognise income and
expenses or assets and liabilities as if the carve-out business had always
17. 8
been a standalone entity. Thus, the resulting financial position may not be
that which might have existed if the carve-out business had been a stand-
alone business.
Relationship with the remaining group
28. In addition to transactions with ‘third parties’, the results of the business
may also include transactions with the remaining group.
Example: Sales which were previously regarded as ‘intra-group’ will
need to be re-examined to determine whether they relate to entities
within the carve-out business or outside it.
29. It is necessary to identify the extent of the relationships between the
carve-out business and the remaining group. Balances with the remaining
group may comprise elements of trading balances and short term or long
term funding balances, which may or may not have been interest bearing.
Balances of a trading nature will normally be presented as an element of
debtors or creditors. Balances which are considered to be funding in
nature (having regard, inter alia, to the use of the funds, the period for
which they remain outstanding and the level of other funds) will normally
be classified according to their general nature. Where the balance is
interest bearing and/or has other characteristics of debt, it will be
presented as debt financing. Where a balance does not have the
characteristics of debt, it will be classified as capital and presented as a
part of equity, aggregated with the owners’ contribution (capital) and
reserves of the carve-out business.
Example: Carve-out business was charged royalty on a periodic basis
for the use of a product pertaining to an entity. From the perspective of
carve-out financial statements, this fee stands payable to the owners
since it is owed to the owners. It will be presented in the manner of debt
financing in the carve-out financial statements since royalty is charged
on a periodic basis and bears the characteristics of debt. However, in
case no royalty is charged for the use of the product, then it will be
treated as owner’s contribution.
30. Balances with the remaining group may also contain elements of third
party debtors or creditors which have been accounted for on behalf of the
carve-out business by the remaining group.
18. 9
Examples: VAT, payroll taxes, certain customers or suppliers common
to the carve-out business and the remaining group, and external funding
balances.
Such elements of the balances with the remaining group should be
allocated appropriately.
Exceptional items
31. Exceptional items should be allocated to the carve-out business and
accounted for in accordance with the applicable Accounting Standards.
Aspects common to Combined/Carve-out Financial
Statements
Taxation
32. The determination of tax expenses in preparing carve-out/combined
financial statements depends on whether the combining/carve-out
businesses have filed separate tax returns or have their tax affairs dealt
with as part of a larger tax entity. Generally, tax expenses should be
determined for a combining/carve-out business as if the combining/carve-
out business is a separate taxable entity.
33. The approach would involve the aggregation of the tax expenses actually
incurred by the combining businesses (reflecting the benefits, reliefs and
charges), after considering the tax effects of any adjustments. Where the
information relating to the tax expenses actually incurred is not available,
the tax expenses should be recomputed on the basis of the results of the
combining business. Thus, if separate tax returns do not exist, a basis for
allocating overall tax expenses must be determined on appropriate basis.
Impairment
34. For each period covered by the combined/carve-out financial statements,
an independent assessment of the presence or absence of impairment
indicators should be made based on the position post combination. Other
provisions relating to measurement, recognition and disclosure of
impairment should be governed by the applicable Accounting Standards.
19. 10
Transaction costs
35. Transaction costs include finder’s fees; advisory, legal, accounting,
valuation and other professional or consulting fees; general administrative
costs, including the costs of maintaining an internal acquisitions
department; and costs of registering and issuing debt and equity
securities. Such costs should be recognised as expenses in the periods in
which the costs are incurred and the services are received.
36. The costs to issue debt or equity securities should be recognised in
accordance with the applicable Accounting Standards.
Capital
37. Where there is a legal capital, the same should be considered in preparing
combined/ carve-out financial statements. However, it may not be possible
to arrive at the amount of share capital pertaining to combining/carve-out
businesses. In such cases, the difference between the assets and
liabilities of the combining/ carve-out businesses, being net asset value,
may be presented as capital. While doing so, to the extent balances (not
having the characteristics of debt) treated as part of equity (see paragraph
29) should be considered as a component of the equity.
Cash flow statements
38. A cash flow statement is prepared in accordance with the applicable
Accounting Standards.
39. Direct or indirect method may be adopted for preparation of cash flow
statement depending upon the information available.
Disclosures
40. Disclosure is required in the notes to the combined/carve-out financial
statements of the fact that the information presented may not be
representative of the position which may prevail after the transaction.
Similarly, the fact that resulting financial position may not be that which
might have existed if the carve-out business/combining businesses had
been a stand-alone business should also be disclosed.
20. 11
41. Comparatives are not necessarily required to be given for the
combined/carve-out financial statements.
42. The following should also be disclosed in the combined/carve-out financial
statements apart from the disclosures specified in the other paragraphs:
a) the purpose of preparation of combined/carve-out financial
statements;
b) a list of combining businesses together with brief description of
activities;
c) statement of compliance with the applicable Accounting Standards;
d) the principal accounting policies followed in preparing the
combined/carve-out financial statements;
e) the basis for allocation, critical assumptions, judgments, and
estimates involved in the preparation of combined/ carve-out
financial statements;
f) other disclosures as per the requirements of applicable Accounting
Standards to the extent relevant;
g) where the accounting policies are not uniform in respect of the
combining businesses, disclosure of that fact along with the
accounting framework followed;
h) extent of balances (not having the characteristics of debt) treated
as part of equity (refer paragraphs 29 & 37);
i) the basis of pricing inter-group transfers and any change therein.
The above disclosures are not exhaustive and specific disclosures that
will assist users’ understanding of combined/carve-out financial
statements should also be made.