ICDS VIII deals with the accounting treatment for securities held as stock-in-trade and by scheduled banks and public financial institutions. For securities held as stock-in-trade, the actual cost or net realizable value, whichever is lower, is used for valuation at the end of the previous year. Premium or discount on acquisition of securities is adjusted with the actual cost. Unlisted or non-regularly quoted securities are valued at actual cost. Part B provides valuation guidance for securities held by scheduled banks and public financial institutions.
Objectives & Agenda :
To understand the concept of ICDS and the rationale for introducing ICDS, its applicability and its commencement year. To analyse each and every ICDS and draw up a comparative analysis of ICDS and Accounting Standards (AS). Finally, to know the relevant disclosure of ICDS in tax audit report.
The document discusses TDS under GST in India. It outlines who is liable to deduct TDS, when the liability is triggered (over Rs. 250,000 contract value), the TDS rates of 1-2%, how to calculate the TDS amount, registration requirements, payment due dates within 10 days of the month, providing a TDS certificate within 5 days, and how deductees can claim a refund of the TDS amount.
- Ind AS 115 replaces existing revenue standards and provides a single comprehensive model for revenue recognition. It is effective for annual periods beginning on or after April 1, 2018.
- The key change under Ind AS 115 is the requirement to recognize revenue when a customer obtains control of promised goods or services rather than when risks and rewards are transferred. Control is defined as the ability to direct the use and obtain the benefits from the goods or services.
- Ind AS 115 introduces a five-step model for revenue recognition: 1) identify the contract with the customer, 2) identify separate performance obligations, 3) determine transaction price, 4) allocate transaction price to performance obligations, and 5) recognize revenue when performance obligations are
Find out the detailed explanation of the provisions relating to Input Tax Credit under the dual GST Law from the presentation . Give it a read and we would love to know your feedback!
Your guide on the most crucial pillar of GST - Input Tax Credit.
We hope this guide can help you understand the contours of Input Tax credit with regard what you are eligible for and what is explicitly denied in the law.
Analysis of "Fees for Technical Services" and its TaxabilityDVSResearchFoundatio
Key Takeaways
Analysis of the definition under the Income tax act and taxability
Implications under DTAA
Understanding of make available clause and most favoured nation clause
Taxability when no FTS clause in DTAA
Relevant illustrations and judicial precedents
Objectives & Agenda :
To understand the concept of ICDS and the rationale for introducing ICDS, its applicability and its commencement year. To analyse each and every ICDS and draw up a comparative analysis of ICDS and Accounting Standards (AS). Finally, to know the relevant disclosure of ICDS in tax audit report.
The document discusses TDS under GST in India. It outlines who is liable to deduct TDS, when the liability is triggered (over Rs. 250,000 contract value), the TDS rates of 1-2%, how to calculate the TDS amount, registration requirements, payment due dates within 10 days of the month, providing a TDS certificate within 5 days, and how deductees can claim a refund of the TDS amount.
- Ind AS 115 replaces existing revenue standards and provides a single comprehensive model for revenue recognition. It is effective for annual periods beginning on or after April 1, 2018.
- The key change under Ind AS 115 is the requirement to recognize revenue when a customer obtains control of promised goods or services rather than when risks and rewards are transferred. Control is defined as the ability to direct the use and obtain the benefits from the goods or services.
- Ind AS 115 introduces a five-step model for revenue recognition: 1) identify the contract with the customer, 2) identify separate performance obligations, 3) determine transaction price, 4) allocate transaction price to performance obligations, and 5) recognize revenue when performance obligations are
Find out the detailed explanation of the provisions relating to Input Tax Credit under the dual GST Law from the presentation . Give it a read and we would love to know your feedback!
Your guide on the most crucial pillar of GST - Input Tax Credit.
We hope this guide can help you understand the contours of Input Tax credit with regard what you are eligible for and what is explicitly denied in the law.
Analysis of "Fees for Technical Services" and its TaxabilityDVSResearchFoundatio
Key Takeaways
Analysis of the definition under the Income tax act and taxability
Implications under DTAA
Understanding of make available clause and most favoured nation clause
Taxability when no FTS clause in DTAA
Relevant illustrations and judicial precedents
The document is a presentation on the Companies (Auditor's Report) Order, 2020 (CARO 2020) by Rajvanshi & Associates. It provides an overview of CARO 2020, including its background, applicability, and the various matters that must be addressed in auditor's reports under CARO 2020. Specifically, it outlines the 21 paragraphs of CARO 2020 that auditors must comment on, such as fixed assets, loans & advances, statutory dues, fraud, related party transactions, and internal audit. It also lists companies that are exempt from CARO 2020, such as banking, insurance and small companies.
Summary of changes in vat deduction at source sandra & associatesKhalid Iftekhar
Every year Bangladesh Government brings changes in the VAT law. In 2019, Bangladesh Government brought a new law called Value Added Tax and Supplementary Duty 2012.
This snapshot reflects the differences between the two laws in respect to withholding VAT regime. I hope the users will find this helpful
The document discusses the process of income tax assessment under section 143 of the Income Tax Act. It explains that there are two types of assessments - summary assessment without the assessee's presence under section 143(1) and scrutiny assessment under section 143(3) where the assessing officer verifies claims and deductions in detail. The key steps of both assessment processes are outlined along with relevant time limits. Section 143(4) deals with tax paid or refund received after the assessment is completed.
The following Presentation enumerates the various provisions w.r.t. ITC, how it can be used,eligibilty and conditions for claiming ITC along with various case studies and illustrations. further, it elaborates the concept of input service distributor.
CA NOTES ON INCOME COMPUTATION AND DISCLOSURE STANDARDS
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An overview on "Value of Supply" in GST. The presentation covers the provisions related to valuation of supply of goods or services or both made in different circumstances and to different persons.
Registered person is liable to penalty under Section 122(2) of the CGST Act for short levy or non-levy of tax or erroneous refund or input tax credit wrongly availed or utilized. Any person for certain offences is liable to penalty under Section 122(3) which may extend to Rs.25,000/-. General or Residual penalty (for which no penalty is separately provided for in this Act,) which may extend to twenty-five thousand rupees under Section 125. No Penalty for minor breaches or omissions or mistakes as per Section 126.
1. The document discusses the registration provisions under the Central Goods and Services Tax Act, including who is liable for registration, the registration procedure, and provisions around amendment, cancellation, and revocation of registration.
2. Key sections covered include sections 22-29 which deal with liability, exemptions, compulsory registration, registration procedure, deemed and special registrations, amendment of registration, cancellation of registration, and revocation of cancellation.
3. The registration process involves applying for registration, verification and approval, issuance of certificate, amendments, cancellations, and includes 30 registration forms prescribed.
Objectives & Agenda :
This webinar shall throw some with regards to the revision and rectification of orders passed by the income tax authorities. It shall look upon the orders which cannot be revised. This webinar shall also explain the procedure involved in the revision of an order.
This document provides an introduction and overview of India's GST composition scheme. Key points include:
- The composition scheme is a simple alternative for small taxpayers with turnover less than Rs. 1.5 crore to pay GST at a fixed rate instead of going through regular GST procedures.
- As of 2019, service providers can now opt for the composition scheme if their turnover is below Rs. 50 lakhs.
- To be eligible, total turnover from all businesses with the same PAN must be below Rs. 1.5 crore, and some business types like manufacturers of specific goods are excluded.
- Opting for the composition scheme means no input tax credit can be claimed but
The document discusses the valuation of supply under the Goods and Services Tax (GST) in India. It explains that as per Section 15(1), the value of supply between unrelated persons where price is the sole consideration is the transaction value. It also discusses various inclusions and exclusions in determining the value of supply such as taxes, interest, subsidies, discounts etc. The valuation methods explained are transaction value for unrelated persons, open market value for related persons, and cost plus 10% or reasonable value determined consistently with Section 15 for other cases. The document provides examples to illustrate these valuation principles.
Optitax's presentation on annual return & reco. statementNilesh Mahajan
The annual return GSTR-9 requires certain information to be provided in specified formats. It requires:
1) Details of outward and inward supplies declared in GSTR-1 and GSTR-3B returns filed during the previous financial year.
2) Details of input tax credit claimed in GSTR-3B returns filed during the previous financial year.
3) Details of tax paid as declared in returns filed during the previous financial year.
4) Particulars of transactions pertaining to the previous financial year declared in returns between April to September of the current financial year.
Objectives & Agenda :
To know the tolerance range in transfer pricing applicable for Assessment Year 2019-20 notified by CBDT on 13th September, 2019. To understand the conditions for applying tolerance range with relevant illustrations. To analyse the tolerance range notified by CBDT for previous years. Finally, the webinar will also cover the tolerance range in transfer pricing in other Countries.
The document discusses India's Goods and Services Tax (GST) policies and regulations related to input tax credit. Key points include:
- Under GST, input tax credit is available for goods, services, and capital goods used in the course of business. This is a significant expansion of credit compared to earlier tax systems.
- Credit can be claimed by registered businesses against central GST, state GST, integrated GST, and Union territory tax paid on business purchases.
- Certain documents like tax invoices and bills of entry must be possessed, and payment must be made to the supplier within 180 days, for credit to be claimed.
- There are also time limits, apportionment and reversal
This document provides information about input tax credit under GST including definitions, eligibility conditions, and procedures. It discusses what constitutes input, input services, capital goods, and the electronic credit ledger. It outlines the primary conditions for claiming ITC including the invoice, payment, and filing of returns. Special scenarios where ITC can be claimed are described. The document also discusses blocked credits, apportionment of credit, and the process for determining and reversing ITC.
Income tax-return-of-income-and-assessment-proceduresAdmin SBS
- Return of Income must be filed by certain persons and entities like companies, firms, individuals with income above exemption limit, residents with foreign assets/accounts, charitable trusts, political parties, and research/educational institutions.
- There are different ITR forms for individuals, HUFs, companies, and other persons to file ROI depending on income sources.
- The due date for filing ROI varies depending on the type of assessee but is typically July 31 or September 30. Late or belated returns can be filed within 1 year with penalties. Revised returns can also be filed to correct omissions or mistakes.
- The income tax department undertakes assessment in two stages - intimation issued after automated
The document discusses various provisions related to tax deducted at source (TDS) in India. It explains the objectives of TDS which include helping report correct incomes, check tax evasion, and widen the tax net. It discusses key sections like 192 on payment of salaries, 193 on interest on securities, 194 on dividends, 194A on interest other than interest on securities, and common provisions around rate of TDS, threshold limits for deduction, and procedures.
This document provides an overview of the tax deducted at source (TDS) provisions under the Goods and Services Tax (GST) law in India. It discusses who is liable to deduct TDS, the registration requirements, rates and thresholds for TDS, payment and return filing procedures, certificates to be issued, refunds, and comparisons with the previous TDS system under state VAT laws. The key aspects covered are registration under GST for TDS, the 1-2% rates for deduction, monthly payment and return filing timelines, and certificates to be provided to deductees.
1) The Income Computation and Disclosure Standards (ICDS) provide rules for computing income that are applicable for all assessees following the mercantile system of accounting.
2) ICDS cover aspects such as valuation of inventory, treatment of capital gains, valuation of foreign exchange fluctuations, accounting for government grants, and treatment of provisions and contingencies.
3) The net effect of applying ICDS on the income needs to be disclosed in the return of income and tax audit report. However, if an assessee is not liable for tax audit, a separate disclosure is not required.
The document discusses Income Computation and Disclosure Standards (ICDS) which were notified by the Central Government to bring uniformity in accounting methods for computing income under the Income Tax Act 1961. It provides details on the 10 ICDS standards covering aspects like accounting policies, valuation of inventory, construction contracts, revenue recognition, fixed assets, foreign exchange rates, government grants, securities, borrowing costs and provisions, contingencies and events occurring after the balance sheet date. The objective is to harmonize computation of income as per books of accounts with provisions of the Income Tax Act.
The document is a presentation on the Companies (Auditor's Report) Order, 2020 (CARO 2020) by Rajvanshi & Associates. It provides an overview of CARO 2020, including its background, applicability, and the various matters that must be addressed in auditor's reports under CARO 2020. Specifically, it outlines the 21 paragraphs of CARO 2020 that auditors must comment on, such as fixed assets, loans & advances, statutory dues, fraud, related party transactions, and internal audit. It also lists companies that are exempt from CARO 2020, such as banking, insurance and small companies.
Summary of changes in vat deduction at source sandra & associatesKhalid Iftekhar
Every year Bangladesh Government brings changes in the VAT law. In 2019, Bangladesh Government brought a new law called Value Added Tax and Supplementary Duty 2012.
This snapshot reflects the differences between the two laws in respect to withholding VAT regime. I hope the users will find this helpful
The document discusses the process of income tax assessment under section 143 of the Income Tax Act. It explains that there are two types of assessments - summary assessment without the assessee's presence under section 143(1) and scrutiny assessment under section 143(3) where the assessing officer verifies claims and deductions in detail. The key steps of both assessment processes are outlined along with relevant time limits. Section 143(4) deals with tax paid or refund received after the assessment is completed.
The following Presentation enumerates the various provisions w.r.t. ITC, how it can be used,eligibilty and conditions for claiming ITC along with various case studies and illustrations. further, it elaborates the concept of input service distributor.
CA NOTES ON INCOME COMPUTATION AND DISCLOSURE STANDARDS
FREE AFFIDAVITS AND NOTICES FORMATS
FREE AGREEMENTS AND CONTRACTS FORMATS
FREE LLB LAW NOTES
FREE CA ICWA NOTES
FREE LLB LAW FIRST SEM NOTES
FREE LLB LAW SECOND SEM NOTES
FREE LLB LAW THIRD SEM NOTES
FREE LLB LAW FOURTH SEM NOTES
FREE LLB LAW FIFTH SEM NOTES
FREE LLB LAW SIXTH SEM NOTES
FREE CA ICWA FOUNDATION NOTES
FREE CA ICWA INTERMEDIATE NOTES
FREE CA ICWA FINAL NOTES
KANOON KE RAKHWALE INDIA
HIRE LAWYER ONLINE
LAW FIRMS IN DELHI
CA FIRM DELHI
VISIT : https://www.kanoonkerakhwale.com/
VISIT : https://hirelawyeronline.com/
An overview on "Value of Supply" in GST. The presentation covers the provisions related to valuation of supply of goods or services or both made in different circumstances and to different persons.
Registered person is liable to penalty under Section 122(2) of the CGST Act for short levy or non-levy of tax or erroneous refund or input tax credit wrongly availed or utilized. Any person for certain offences is liable to penalty under Section 122(3) which may extend to Rs.25,000/-. General or Residual penalty (for which no penalty is separately provided for in this Act,) which may extend to twenty-five thousand rupees under Section 125. No Penalty for minor breaches or omissions or mistakes as per Section 126.
1. The document discusses the registration provisions under the Central Goods and Services Tax Act, including who is liable for registration, the registration procedure, and provisions around amendment, cancellation, and revocation of registration.
2. Key sections covered include sections 22-29 which deal with liability, exemptions, compulsory registration, registration procedure, deemed and special registrations, amendment of registration, cancellation of registration, and revocation of cancellation.
3. The registration process involves applying for registration, verification and approval, issuance of certificate, amendments, cancellations, and includes 30 registration forms prescribed.
Objectives & Agenda :
This webinar shall throw some with regards to the revision and rectification of orders passed by the income tax authorities. It shall look upon the orders which cannot be revised. This webinar shall also explain the procedure involved in the revision of an order.
This document provides an introduction and overview of India's GST composition scheme. Key points include:
- The composition scheme is a simple alternative for small taxpayers with turnover less than Rs. 1.5 crore to pay GST at a fixed rate instead of going through regular GST procedures.
- As of 2019, service providers can now opt for the composition scheme if their turnover is below Rs. 50 lakhs.
- To be eligible, total turnover from all businesses with the same PAN must be below Rs. 1.5 crore, and some business types like manufacturers of specific goods are excluded.
- Opting for the composition scheme means no input tax credit can be claimed but
The document discusses the valuation of supply under the Goods and Services Tax (GST) in India. It explains that as per Section 15(1), the value of supply between unrelated persons where price is the sole consideration is the transaction value. It also discusses various inclusions and exclusions in determining the value of supply such as taxes, interest, subsidies, discounts etc. The valuation methods explained are transaction value for unrelated persons, open market value for related persons, and cost plus 10% or reasonable value determined consistently with Section 15 for other cases. The document provides examples to illustrate these valuation principles.
Optitax's presentation on annual return & reco. statementNilesh Mahajan
The annual return GSTR-9 requires certain information to be provided in specified formats. It requires:
1) Details of outward and inward supplies declared in GSTR-1 and GSTR-3B returns filed during the previous financial year.
2) Details of input tax credit claimed in GSTR-3B returns filed during the previous financial year.
3) Details of tax paid as declared in returns filed during the previous financial year.
4) Particulars of transactions pertaining to the previous financial year declared in returns between April to September of the current financial year.
Objectives & Agenda :
To know the tolerance range in transfer pricing applicable for Assessment Year 2019-20 notified by CBDT on 13th September, 2019. To understand the conditions for applying tolerance range with relevant illustrations. To analyse the tolerance range notified by CBDT for previous years. Finally, the webinar will also cover the tolerance range in transfer pricing in other Countries.
The document discusses India's Goods and Services Tax (GST) policies and regulations related to input tax credit. Key points include:
- Under GST, input tax credit is available for goods, services, and capital goods used in the course of business. This is a significant expansion of credit compared to earlier tax systems.
- Credit can be claimed by registered businesses against central GST, state GST, integrated GST, and Union territory tax paid on business purchases.
- Certain documents like tax invoices and bills of entry must be possessed, and payment must be made to the supplier within 180 days, for credit to be claimed.
- There are also time limits, apportionment and reversal
This document provides information about input tax credit under GST including definitions, eligibility conditions, and procedures. It discusses what constitutes input, input services, capital goods, and the electronic credit ledger. It outlines the primary conditions for claiming ITC including the invoice, payment, and filing of returns. Special scenarios where ITC can be claimed are described. The document also discusses blocked credits, apportionment of credit, and the process for determining and reversing ITC.
Income tax-return-of-income-and-assessment-proceduresAdmin SBS
- Return of Income must be filed by certain persons and entities like companies, firms, individuals with income above exemption limit, residents with foreign assets/accounts, charitable trusts, political parties, and research/educational institutions.
- There are different ITR forms for individuals, HUFs, companies, and other persons to file ROI depending on income sources.
- The due date for filing ROI varies depending on the type of assessee but is typically July 31 or September 30. Late or belated returns can be filed within 1 year with penalties. Revised returns can also be filed to correct omissions or mistakes.
- The income tax department undertakes assessment in two stages - intimation issued after automated
The document discusses various provisions related to tax deducted at source (TDS) in India. It explains the objectives of TDS which include helping report correct incomes, check tax evasion, and widen the tax net. It discusses key sections like 192 on payment of salaries, 193 on interest on securities, 194 on dividends, 194A on interest other than interest on securities, and common provisions around rate of TDS, threshold limits for deduction, and procedures.
This document provides an overview of the tax deducted at source (TDS) provisions under the Goods and Services Tax (GST) law in India. It discusses who is liable to deduct TDS, the registration requirements, rates and thresholds for TDS, payment and return filing procedures, certificates to be issued, refunds, and comparisons with the previous TDS system under state VAT laws. The key aspects covered are registration under GST for TDS, the 1-2% rates for deduction, monthly payment and return filing timelines, and certificates to be provided to deductees.
1) The Income Computation and Disclosure Standards (ICDS) provide rules for computing income that are applicable for all assessees following the mercantile system of accounting.
2) ICDS cover aspects such as valuation of inventory, treatment of capital gains, valuation of foreign exchange fluctuations, accounting for government grants, and treatment of provisions and contingencies.
3) The net effect of applying ICDS on the income needs to be disclosed in the return of income and tax audit report. However, if an assessee is not liable for tax audit, a separate disclosure is not required.
The document discusses Income Computation and Disclosure Standards (ICDS) which were notified by the Central Government to bring uniformity in accounting methods for computing income under the Income Tax Act 1961. It provides details on the 10 ICDS standards covering aspects like accounting policies, valuation of inventory, construction contracts, revenue recognition, fixed assets, foreign exchange rates, government grants, securities, borrowing costs and provisions, contingencies and events occurring after the balance sheet date. The objective is to harmonize computation of income as per books of accounts with provisions of the Income Tax Act.
The document discusses the key aspects of Income Computation and Disclosure Standards (ICDS) introduced in India for computation of income under tax laws. Some key points:
- ICDS will be applicable for computation of income from business/profession and other sources from financial year 2015-16.
- ICDS provisions will override the existing Accounting Standards in certain cases for tax purposes.
- ICDS covers 10 standards related to accounting policies, inventories, construction contracts, revenue recognition, fixed assets, foreign exchange rates, government grants, securities, borrowing costs, and provisions.
- ICDS introduces some changes compared to the existing Accounting Standards in areas like inventory valuation, treatment of expected losses,
The document discusses Sri Lanka's transition to International Financial Reporting Standards (IFRS). It provides an overview of SLFRS and LKAS accounting standards. It outlines the diagnostic stage for assisting companies transitioning to SLFRS, including the transition date, comparative period, and reporting period. Disclosure requirements under SLFRS are also summarized such as the minimum content required for financial statements and notes.
The document discusses the key aspects of Accounting Standard (AS) 26 on Intangible Assets. It outlines the objective, scope and definitions related to intangible assets. Specifically, it notes that an intangible asset must be identifiable, provide future economic benefits, and the enterprise must control it. The standard covers the recognition, measurement and subsequent expenditure and amortization of intangible assets. It does not apply to certain intangibles covered under other accounting standards.
International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) to provide a common global language for business affairs. IFRS provide guidelines for financial statements to be comparable, understandable, reliable and relevant across international boundaries. Over 110 countries either require or allow the use of IFRS. While IFRS and Indian accounting standards have many similarities, there are some differences in areas such as classification of expenses, treatment of government grants, and requirements for interim financial reporting. Adoption of IFRS aims to improve transparency and access to global capital.
Ppt on accounting standards prepared by Prof.Satish R.TajaneDr. Satish Tajane
The document provides an overview of accounting standards in India. It discusses the key bodies that regulate accounting standards and the process for developing and prescribing standards. It then lists and briefly describes 30 Indian Accounting Standards (AS), covering their objectives and key requirements. The standards relate to areas like disclosure of accounting policies, valuation of inventories, treatment of contingencies, revenue recognition, depreciation, foreign exchange rates, investments and more.
PAN intimation and new AIR reporting requirementsDK Bholusaria
This document discusses new rules regarding PAN intimations and annual information reporting (AIR) under sections 139A(5) and 285BA(1) of the Income Tax Act. Key points:
- New rules expand the scope of transactions requiring PAN to be quoted, such as purchase of life insurance, debentures, mutual funds, and transactions over Rs. 50,000.
- Specified persons like banks and brokers are responsible for ensuring PAN is quoted and submitting half-yearly statements of declarations received on Form 60 for transactions without PAN.
- AIR reporting now requires additional information from banks on cash transactions over Rs. 50,000, including deposits, withdrawals and purchase of bank
The document summarizes a presentation on understanding accounting standards and IFRS. It discusses:
- The objectives of accounting standards such as standardizing policies and adding reliability to financial statements.
- The evolution of accounting standards in India from AS1 to AS32 and IFRS internationally.
- An overview of the types of accounting standards including those covering inventories, cash flows, depreciation, revenue recognition, and investments.
- The impact of adopting IFRS in India, including changes to accounting policies, skills needed, and a suggested conversion methodology.
The document discusses accounting standards and provides details about their objectives, issuance, and application. The key points are:
- Accounting standards aim to standardize accounting policies and financial statement presentation to facilitate comparison across firms.
- The Institute of Chartered Accountants of India issues accounting standards that must be followed in preparing financial statements under the Companies Act.
- Over 30 accounting standards have been issued so far covering various aspects of recognition, measurement, treatment and disclosure of transactions and events.
- Compliance with accounting standards brings uniformity and enhances the quality and transparency of financial reporting.
This document provides an overview of IAS 21, which sets out the accounting treatment for foreign currency transactions and foreign operations. It defines key terms like functional currency, foreign currency, spot exchange rate, and closing rate. The standard specifies that foreign currency transactions should be initially recorded using the spot exchange rate and revalued at each reporting date using the closing rate for monetary items. Exchange differences arising from such revaluations should be recognized in profit or loss. It also addresses how to determine functional currency and the translation of financial statements into a presentation currency.
The document discusses various issues related to the impact of Ind AS on computation of MAT (Minimum Alternate Tax). It provides an overview of the international view on the impact of IFRS on tax computation in various countries. It then discusses the format of profit and loss statement under Ind AS and key differences compared to the previous accounting standards.
The document also discusses the interplay between Ind AS and income tax provisions in India. It outlines specific adjustments that need to be made as per section 115JB of the Income Tax Act for MAT computation of companies adopting Ind AS. Finally, it discusses several practical corporate tax issues that may arise under Ind AS such as accounting for loan to subsidiaries, fair valuation of investments, revenue recognition,
This document provides an overview of the statement of cash flows, including:
- The statement of cash flows shows a company's ability to generate cash flows from operating, investing, and financing activities.
- It is the only financial statement prepared on a cash basis rather than accrual basis.
- The objective is to require information on historical changes in cash and cash equivalents, classifying cash flows into the three activities.
- Examples of cash flows from each type of activity are operating activities like cash from sales, investing activities like purchases of property, and financing activities like equity issuances.
The document provides an overview of International Accounting Standard 7 on the statement of cash flows. It discusses the scope, objectives, definitions, presentation requirements, and reporting requirements for the statement of cash flows including the classification of cash flows as operating, investing and financing activities. It also covers topics like foreign currency cash flows, interest and taxes, subsidiaries, non-cash items, and the components of cash and cash equivalents that must be disclosed.
The document provides an overview of International Accounting Standard 7 on the statement of cash flows. It discusses the scope, objectives, definitions, presentation requirements, and reporting requirements for the statement of cash flows including the classification of cash flows as operating, investing and financing activities. It also covers topics like foreign currency cash flows, interest and taxes, subsidiaries, non-cash items, and the components of cash and cash equivalents that must be disclosed.
Understanding Financial Statements and GST implications CA. Pankaj Shah
Understanding Financial Statements and GST implications
By CA. Pankaj Shah
Former Chairman Indore Branch of CIRC of ICAI
LLB(Hons), BBA, C. S., FCA, DISA
This document provides definitions and guidance on preparing a statement of cash flows according to IAS 7. It defines key terms like cash and cash equivalents. It explains how to classify cash flows from operating, investing and financing activities and provides examples of cash flows that would fall under each classification. It also discusses the direct and indirect methods for preparing the statement of cash flows and how foreign currency, interest, dividends and taxes should be reported.
Similar to Income Computation and Disclosure Standards (ICDS) – VI to X (20)
SCRAPPING OF RETRO TAX PROVISIONS : A REVIVAL OF OVERSEAS INTEREST IN INDIADVSResearchFoundatio
The document summarizes the scrapping of retroactive tax provisions in India. It provides background on retroactive taxation laws introduced in 2012 in response to court rulings. It analyzes prominent cases like Vodafone and Cairn Energy that challenged the retroactive taxes under bilateral investment treaties. The Taxation Laws Amendment Act of 2021 was passed to scrap these retroactive provisions and provide tax refunds to affected companies like Cairn Energy. The act aims to improve India's reputation as an investment destination and revive interest from foreign investors.
Key Takeaways: - Analysis of section 45(4), section 9B of the Income Tax Act...DVSResearchFoundatio
Key Takeaways:
- Analysis of section 45(4), section 9B of the Income Tax Act and Rule 8AA and Rule 8AB of Income Tax Rules
- Illustrations to understand the relevant impact
- Critical Issues concerned with the provisions
Key Takeaways:
- Facts of the case
- Issues and Orders of the case
- Contention of the parties
- Observations by Honourable Supreme Court
- Conclusions
Key Takeaways:
- Facts of the case
- Issues and Orders of the case
- Contention of the parties
- Observations by Honourable Supreme Court
- Conclusions
FALLACIOUS DISREGARDING OF TRANSACTIONS THAT RESULT IN A TAX BENEFIT TO THE A...DVSResearchFoundatio
Key Takeaways:
- Facts of the case
- AO's contention
- Ruling of CIT(A) and issues for consideration of the ITAT
- Observations of ITAT
- Final Ruling
- Way Forward
ALLOWABILITY OF OUTSTANDING INTEREST CONVERTED INTO DEBENTURES AS AN EXPENSE ...DVSResearchFoundatio
The Supreme Court ruled that the conversion of outstanding interest into debentures by the assessee company qualified for deduction under Section 43B of the Income Tax Act. The conversion was done under a rehabilitation plan agreed with institutional creditors to extinguish the interest liability. The Court observed that Section 43B was not meant to affect bona fide transactions, and debentures were different than loans/borrowings under Explanation 3C. It set aside the High Court's decision and allowed the assessee's claim for deduction, noting the conversion was an actual payment of interest rather than postponing the liability.
Key Takeaways:
- Facts of the case
- Issues and Orders
- Contention of the parties
- Observations of Honourable Supreme Court
- Conclusion and way forward
This document outlines the process and documentation required for an SME to obtain an in-principle approval for an initial public offering (IPO) listing on the National Stock Exchange of India (NSE). It details the documents required to be submitted on T+2, T+3, T+4, and T+5 days from the date of in-principle approval to finalize the listing. These include annual reports, board resolutions, shareholding details, basis of allotment, post-issue shareholding pattern, and confirmation from issuers, merchant bankers, and statutory auditors. It also provides information on NEAPS platform registration and payment of processing and annual listing fees.
What are the post listing compliance norms for SME entities?DVSResearchFoundatio
The document summarizes post-listing compliance norms for small and medium enterprises (SMEs) listed on SME exchanges in India. It discusses requirements for further capital issues, green shoe options, migration to the main board, further public offerings, and mandatory and voluntary disclosures. Key requirements include making full disclosures for further issues, obtaining shareholder approval for green shoe options, complying with eligibility criteria for migration, and submitting regular financial disclosures and statements on the use of IPO proceeds.
1) Prior to listing on an SME exchange, a company must file an offer document with SEBI and the relevant stock exchange and appoint qualified intermediaries like lead managers, registrars, and syndicate members.
2) The company must make required disclosures in the offer document and the lead manager must conduct due diligence on these disclosures.
3) After filing the offer document, the company must price the issue, keep the issue open for subscription for at least 3 days, and ensure the issue is underwritten and market making arrangements are in place.
This document outlines the criteria for Small and Medium Enterprises (SMEs) to list on the SME platforms of the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India. The key eligibility criteria are a positive net worth, a track record of at least 3 years of operations, and operating profits over the last 2-3 years. Additional disclosure requirements include details on directors, regulatory actions, litigation status, and defaults. SMEs listed can later migrate to the main board of the exchanges if they meet certain criteria like company size and track record. As of now, over 220 companies are listed on NSE's SME platform and over 100 have migrated from BSE's SME platform
Key Takeaways:
- Background and Overview of Legal Provision
- Facts of the Case
- Contentions of the Assessee and Revenue
- Supreme Court’s Verdict
- Key Learnings and Way Forward
An Indian individual seeks to incorporate a company in Singapore. The process involves obtaining name approval, determining the company structure as a private or public company, appointing directors and other key personnel, selecting a registered office address, and drafting a company constitution. Once incorporated, the new company can open a Singapore bank account and obtain a tax residency certificate. Indian regulations allow for foreign direct investment through the automatic route or approval route depending on the amount and financial commitment. The entire incorporation process can be completed quickly online but setting up documents may take a few days.
AUTOMATIC VACATION OF STAY GRANTED BY TRIBUNALDCIT v. PEPSI FOODS LTD. [2021]...DVSResearchFoundatio
Key Takeaways:
- Background and Overview of Legal Provision
- Facts of the Case
- Contentions of the Assessee and Revenue
- Supreme Court’s Verdict
- Key Learnings and Way Forward
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Enhancing Adoption of AI in Agri-food: IntroductionCor Verdouw
Introduction to the Panel on: Pathways and Challenges: AI-Driven Technology in Agri-Food, AI4Food, University of Guelph
“Enhancing Adoption of AI in Agri-food: a Path Forward”, 18 June 2024
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Adani Group's Active Interest In Increasing Its Presence in the Cement Manufa...Adani case
Time and again, the business group has taken up new business ventures, each of which has allowed it to expand its horizons further and reach new heights. Even amidst the Adani CBI Investigation, the firm has always focused on improving its cement business.
3. Legends Used in the Presentation
AO Assessing Officer
AS Accounting Standards
AY Assessment Year
BJA Best Judgment Assessment
CG Central Government
CBDT Central Board of Direct Taxes
FASB Financial Accounting Standards Board
FC Foreign Currency
FEC Forward Exchange Contract
HUF Hindu Undivided Family
ICDS Income Computation and Disclosure Standards
IFOS Income From Other Sources
IFRS International Financial Reporting Standards
NRV Net Realisable Value
PGBP Profits and Gains from Business or Profession
P&L Profit & Loss
PY Previous Year
WDV Written Down Value
5. Background
ICDS – Income Computation and Disclosure Standard
CG has power to notify ICDS – Sec 145(2)
CBDT notified ICDS on 31st March, 2015 which shall apply for AY 2016-
17
CBDT notified another ICDS on 29th September, 2016 which shall
replace the earlier notification and shall apply from AY 2017-18 and
subsequent AY
6. Rationale
To bring transparency in computation of total income in respect of “PGBP” and “IFOS”
Therefore, ICDS has been introduced to bring uniformity in computation of income for income tax purposes
Different companies follow different accounting standards for preparation and presentation of financial
statements
Two sets of standards relating to accounting are applicable now – AS and Ind AS
7. Method of Accounting – Sec 145
Taxable income under the heads “PGBP” or “IFOS” has to be computed in accordance with cash or
mercantile system of accounting, being regularly employed
CG may notify ICDS to be followed by any class of assessee’s or in respect of any class of income
If the AO is not satisfied about the correctness or completeness of the accounts, or method of
accounting has not been regularly followed, or income has not been computed in accordance with
ICDS, the AO may make a Best Judgment Assessment (BJA) under Sec 144
At present there are 10 ICDS notified by CBDT which shall be applicable in computing income under the head
“PGBP” or “IFOS”
8. ICDS Applicability & Non-Applicability
Applicability
All assessees following the mercantile system of accounting, for the purpose of
computation of income chargeable to tax under the head “PGBP” or “IFOS”
Non
Applicability
Individual or a HUF who is not required to get his accounts of the PY audited as per
Sec 44AB
Cash system of accounting is followed by the assessee
When income is chargeable under other heads of income other than PGBP or IFOS
Only for the purpose of maintenance of books of accounts
In the case of conflict between the provisions of the Income-tax Act, 1961 and ICDS, the provisions of the
Act shall prevail
Words and expressions used and not defined in ICDS but defined in the Act shall have the meanings
assigned to them in that Act
9. Sec 44AB - Audit of Accounts
Sec 44AD(4) – If an eligible assessee declares income on
presumptive basis in a AY & declares income on normal basis in
any of the 5 succeeding AY – cannot claim benefit under Sec
44AD for next 5 AYs
Every person
Carrying on
business
Carrying on
profession
If total sales, turnover or gross receipts > Rs. 1 Crore
Opting for presumptive taxation under sec 44AE or sec
44BB or sec 44BBB and has claimed income < profits or
gains prescribes under aforesaid sections
Where Sec 44AD(4) is applicable and Total
Income > basic exemption limit
If gross receipts > Rs. 50 Lakh
Opting for presumptive taxation under Sec 44ADA and has
claimed income < profits or gains prescribed under the section
Shall get their
accounts audited
and furnish audit
report duly signed
by accountant
within specified
date
10. Contd.
Sec 44AB shall not apply
To a person who derives income as per Sec
44BB (business of exploration, etc., of mineral
oils) or Sec 44BBA (business of operation of
aircraft in the case of non-residents)
• To a person who declares profits or gains
under Sec 44AD(1)–presumptive taxation
@ 6% or 8% of gross receipts, and
• his total sales, turnover or gross receipts
in the relevant PY <= Rs. 2 Crore
and furnishing a further report by an accountant according to this section shall suffice
Completing audit under such other law and furnishing audit report before due date
For a person who is required to get his accounts audited under any other law (Ex: Companies Act, 2013)
11. Notified ICDS
ICDS Description Relevant AS
I Accounting Policies AS 1
II Valuation of Inventories AS 2
III Construction Contracts AS 7
IV Revenue Recognition AS 9
V Tangible Fixed Assets AS 10
VI Effect of Changes in Foreign Exchange Rates AS 11
VII Government Grants AS 12
VIII Securities AS 13
IX Borrowing Costs AS 16
X Provisions, Contingent Liabilities and Contingent Assets AS 29
ICDS VI to ICDS X has been discussed and analysed in subsequent slides
12. ICDS VI - Effect of Changes in Foreign Exchange
Rates
ICDS VI deals with
Treatment of transactions
in foreign currencies
Treatment of foreign
currency transactions in the
nature of forward exchange
contracts
Translating the financial
statements of foreign
operations
ICDS VI deals with
Treatment of transactions
in foreign currencies
Treatment of foreign
currency transactions in the
nature of forward exchange
contracts
Translating the financial
statements of foreign
operations
Is a branch, by whatever name called, of that
person, the activities of which are based or
conducted in a country other than India
Foreign Operations
of a person
Includes a foreign currency option contract
or another financial instrument of a similar
nature
An agreement to exchange
different currencies at a
forward rate
Forward exchange
contract
13. Relevant Definitions
Transaction which is denominated
in or requires settlement in a
foreign currency
Foreign
currency
transaction
Buys or sells goods or
services whose price is
denominated in a foreign
currency
Borrows or lends funds
when the amounts
payable or receivable are
denominated in a foreign
currency
Becomes a party to
an unperformed
forward exchange
contract
Otherwise acquires or
disposes of assets, or
incurs or settles
liabilities, denominated
in a foreign currency
Includes transactions arising when a person
Money held and assets to be received or liabilities to be paid in
fixed or determinable amounts of money. Example: Cash,
receivables, and payables
Monetary items
Assets and liabilities other than monetary items. Example:
Fixed assets, inventories, and investments in equity shares
Non-monetary items
14. Forward Exchange Contracts (FEC)
• Any premium or discount shall be amortised as expense or income over the life of the contractInception
• Exchange rate on the date of inception of the contract (-) Forward rate specified in the contractPremium or discount
• Recognised as income or as expense in the previous year in which the exchange rates changeExchange Difference
• Any profit or loss arising shall be recognised as income or as expense for the previous yearCancellation or renewal
Applicability Non-Applicability
FEC not intended for trading or speculation purposes, and FEC that is entered into to hedge the foreign
currency risk of a firm commitment or a highly
probable forecast transaction
FEC entered into to establish the amount of the reporting currency required
or available at the settlement date of the transaction
FEC – for
trading/speculation
FEC – to hedge foreign currency risk
of a firm commitment or a highly
probable forecast transaction
Other FEC
1. Premium or discount on contracts is recognized at the time of
settlement
2. Exchange difference shall also be recognized at the time of
settlement
1. Premium or discount arising at inception shall be
amortized over the life of the contract
2. Exchange difference is recognised in the previous
year in which the exchange rates change
Treatment of Exchange Difference
15. ICDS VI vs AS 11
Particulars ICDS VI - Effect of Changes in
Foreign Exchange Rates
AS 11 - Effect of Changes in Foreign
Exchange Rates
Initial recognition Exchange rate on the date of the
transaction
Exchange rate on the date of the
transaction
Subsequent
measurement
Monetary Items Closing Rate Closing rate
Non monetary
items
Except inventory at NRV: Exchange
rate as at the date of the
transaction
Inventory at NRV: Exchange rate
that existed when that value was
determined
Carried at Historical cost: Exchange rate on
the date of the transaction
Fair value: Exchange rate on the date of
determination of fair values
Recognition of exchange difference Monetary items - To be recognised
in P&L
Non-monetary items – not to be
recognised in P&L
In P&L as income or expense as the case
may be
Option to capitalize exchange differences on
long term foreign currency monetary item
till 31st March 2020
16. ICDS VII - Government Grants
Scope ICDS VII deals with the treatment of government grants
ICDS VII does
not deal with
Government assistance other than in
the form of Government grants
Government participation in the
ownership of the enterprise
Government grants are sometimes called by other names such as subsidies, cash
incentives, duty drawbacks, waiver, concessions, reimbursements
Central Government, State Governments, agencies and
similar bodies, whether local, national or international
Government
For past or future compliance
with certain conditions
In cash or kind
to a person
assistance by
Government
Government Grants
17. ICDS VII vs AS 12
Points of Comparison ICDS VII – Government Grants AS 12 – Accounting for Government Grants
Recognition of Government
Grants
Government grants should not be
recognised until there is reasonable
assurance that
i. The person shall comply with the
conditions attached to them and
ii. The government grants shall be
received
Recognition shall not be postponed
beyond the date of actual receipt
Government grants should not be recognised
until there is reasonable assurance that
i. The enterprise will comply with the
conditions laid down and where such
benefits have been earned by the enterprise
Further, there is a reasonable certainty that the
ultimate collection will be made
Government grant related to a
depreciable fixed asset
Grant shall be deducted from the actual
cost of the assets or from the WDV of
block of assets to which concerned asset
belongs to. There is no option to
recognise the same as deferred income
over the useful life
Grant received shall either be shown as deduction
from the gross value of the asset concerned or it
is treated as deferred income which is recognised
in the P&L statement on the systematic and
rationale basis over the useful life of the asset
Government grant related to a
non depreciable fixed asset
and assets requiring
fulfillment of certain
obligation
Recognised as income over the same
period for which the cost of meeting such
obligation is charged to income
Non-depreciable asset: accounted at their
acquisition cost
Where no obligation is attached: creation of
capital reserve
18. ICDS VII vs AS 12
Points of Comparison ICDS VII – Government Grants AS 12 – Accounting for Government Grants
Government grant not directly
related to asset
Deducted from the actual cost of the asset
on pro rata basis
No such provision
Grant relating to
compensation for expenses or
loses incurred
Recognised as income of the period in
which it is receivable
Recognised in the income statement of the period
in which it becomes receivable, as an
extraordinary item if appropriate
Grants in the form of non-
monetary assets
Given at a concessional rate: accounted
for on the basis of their acquisition cost
Given free of cost: No such Provision
Given at a concessional rate: accounted for on the
basis of their acquisition cost
Given free of cost: recorded at nominal value
Refund of grant Refund shall be recorded by increasing the
actual cost or WDV of block of assets by
the amount refundable
Where the actual cost of the asset is
increased, depreciation on the revised
actual cost or WDV shall be provided
prospectively at the prescribed rate
Refund shall be recorded by increasing the book
value of the asset or by reducing the capital
reserve or the deferred income balance, as
appropriate, by the amount refundable
Where the book value of the asset is increased,
depreciation on the revised book value is
provided prospectively over the residual useful
life of the asset
19. ICDS VII - Disclosure
Nature and extent of Government grants recognised during the PY by way of deduction from the actual cost of
the asset or assets or from the WDV of block of assets during the PY
Nature and extent of Government grants recognised during the PY as income
Nature and extent of Government grants not recognised during the PY by way of deduction from the actual
cost of the asset or assets or from the WDV of block of assets and reasons thereof
Nature and extent of Government grants not recognised during the PY as income and reasons thereof
20. ICDS VIII - Securities
Scope ICDS VIII Part A deals with Securities held as stock-in-trade
Part A does not
deal with
The bases for recognition of interest and dividends
on securities which are covered by the ICDS IV –
Revenue recognition
Securities held by a person engaged in the business
of insurance
Securities held by mutual funds, venture capital
funds, banks and public financial institutions
formed under a Central or a State Act or so
declared under the Companies Act
ICDS VIII
Part A - Securities held as stock-in-trade
Part B - Securities held by a scheduled bank or public financial
institutions formed under a Central or a State Act or so declared
under the Companies Act
Part A
21. Relevant Definitions
Fair Value
the amount for which that
asset could be exchanged
between knowledgeable, willing
parties in an arm’s length transaction
ICDS VIII shall also apply to rights and interest in securities and
share of a company in which public are not substantially
interested
Securities – Sec 2(h) of Securities
Contract (Regulation) Act, 1956
Units or any other
such instrument
issued to the
investors under
any mutual fund
scheme
Security receipt
Units or any other
instrument issued by
any collective
investment scheme
to the investors in
such schemes
Derivative
Shares, scrips, stocks,
bonds, debentures,
debenture stock or other
marketable securities of a
like nature in or of any
incorporated company or
other body corporate
Government securities
Such other
instruments as
may be
declared by
the Central
Government
to be
securities
ICDS VIII
excludes
derivatives
22. Recognition and Initial Measurement of Securities
On Acquisition
At actual cost (Purchase price + acquisition charges
such as brokerage, fees, tax, duty or cess)
Acquired
In exchange for other securities
In exchange for another asset
Fair value of the security so
acquired shall be its actual cost
Where unpaid interest has accrued before the acquisition of an interest-bearing security and is
included in the price paid for the security, the subsequent receipt of interest is allocated between
pre-acquisition and post-acquisition periods; the pre-acquisition portion of the interest is
deducted from the actual cost
23. Subsequent Measurement of Securities
Measurement at
the end of PY
For Securities held as
Stock-in-trade
Actual cost initially recognised
NRV at the end of that previous year
whichever is lower
Comparison of actual cost initially recognised and net realisable value shall be done category wise and not for each individual security
Classification of securities into categories
Shares Debt securities Convertible securities Any other securities not covered
Measurement at the
beginning of PY
For Securities held as
Stock-in-trade
The cost of securities available, if any, on the day of the
commencement of the business when the business has
commenced during the previous year, and
The value of the securities of the business as on the close of
the immediately preceding previous year, in any other case
At the end of any previous year, securities not listed on a recognised stock exchange; or listed but not quoted on a recognised stock
exchange with regularity from time to time, shall be valued at actual cost initially recognised
Where the actual cost initially recognised cannot be ascertained by reference to specific identification, the cost
of such security shall be determined on the basis of first-in-first-out method or weighted average cost formula
24. Part B of ICDS VIII
Scope
ICDS VIII Part B deals with Securities held by a scheduled bank
or public financial institutions formed under a Central or a State
Act or so declared under the Companies Act
Part B
Scheduled Bank – Sec 36(1)(viia)
of Income Tax Act, 1961
Corresponding new bank
constituted under Sec 3 of
the Banking Companies
(Acquisition and Transfer of
Undertakings) Act, 1970 or
1980
Subsidiary bank as
defined in the State
Bank of India (Subsidiary
Banks) Act, 1959
State Bank of India
constituted under the
State Bank of India Act,
1955
Any other bank being a
bank included in the
Second Schedule to the
Reserve Bank of India
Act, 1934
Classification, Recognition
and Measurement of
Securities
Securities shall be classified, recognised and measured in
accordance with the extant guidelines issued by the RBI
Any claim for deduction in excess of the said guidelines shall not be
taken into account - ICDS VI shall not apply
Definition of securities similar
to Part A; however including
“derivatives”
25. ICDS VIII vs AS 13
Points of Comparison ICDS VIII - Securities AS 13 – Accounting for Investments
Scope ICDS VIII covers only securities AS 13 covers investments in securities,
properties, etc
Classification Classification of securities is done under
categories, as, shares, debt securities and
convertible securities
Classification of investments is done under
the categories as, shares, debentures, bonds,
Govt securities, investment properties
Stock-in trade Stock-in trade are covered in ICDS VIII Stock-in trade are out of the scope of AS13
Revenue Recognition Does not deal with revenue recognition
as it is covered in ICDS IV
Does not deal with revenue recognition as it
is covered in AS9
Unlisted shares Unlisted shares shall be valued at actual
cost initially recognized
Valuation of unlisted shares are not covered
under AS 13
26. ICDS IX - Borrowing Costs
Scope ICDS IX deals with treatment of borrowing costs
ICDS IX does not deal with the actual or imputed cost of owners’
equity and preference share capital
Interest and other costs incurred by a person in
connection with the borrowing of funds
Borrowing costs
Commitment
charges on
borrowings
Amortised amount
of discounts or
premiums relating
to borrowings
Amortised amount of
ancillary costs incurred in
connection with the
arrangement of borrowings
Finance charges in respect of
assets acquired under finance
leases or under other similar
arrangements
Includes
27. Qualifying Asset
Qualifying asset
Tangible assets
Land, building, machinery,
plant or furniture
Know-how, patents, copyrights,
trade marks, licences, franchises
or any other business or
commercial rights of similar nature
Intangible assets
Inventories
That require a period of twelve
months or more to bring them to
a saleable condition
Recognition
Borrowing costs that are directly
attributable to the acquisition, construction
or production of a qualifying asset shall be
capitalised as part of the cost of that asset
The amount of borrowing costs eligible for capitalisation shall be determined in ICDS IX
Other borrowing costs shall be recognised in accordance with the provisions of the Income Tax Act, 1961
Capitalisation
Means addition of borrowing
cost to the cost of inventory
28. ICDS IX vs AS 16
Points of Comparison ICDS IX – Borrowing Costs AS 16 – Borrowing Costs
Qualifying asset Qualifying assets are any tangible and
intangible asset and inventory which
require time of 12 months or more to
bring them in saleable condition
An asset that necessarily takes a substantial
period of time to get ready for its intended
use or sale
Exchange differences
from foreign currency
borrowings
Not included in Borrowing Costs Exchange differences are recognised and are
regarded as borrowing costs
Temporary
Investment Incomes
ICDS IX does not specify about the
treatment of income earned from
temporary investment made out of
borrowed funds
If borrowed funds are investments then the
income earned from it will be reduced from
the actual borrowing cost
29. ICDS IX vs AS 16
Points of Comparison ICDS IX – Borrowing Costs AS 16 – Borrowing Costs
Commencement of
Capitalization
Capitalization will commence from the
date when funds are utilized in case of
qualifying assets, otherwise, from the
date when funds are borrowed
Capitalization will commence when
acquisition cost or borrowing costs are being
incurred and activities, to prepare the asset
for sale, are in progress
Cessation of
capitalisation
In case of a qualifying assets other than
inventories - when such asset is first put
to use
In case of inventory - when substantially
all the activities necessary to prepare
such inventory for its intended sale are
complete
Capitalisation of borrowing costs should
cease when substantially all the activities
necessary to prepare the qualifying asset for
its intended use or sale are complete
Suspension of
capitalisation
There is no condition mentioned for
suspension of capitalization
Capitalisation of borrowing costs should be
suspended during extended periods in which
active development is interrupted
30. ICDS IX Disclosure
Accounting policy adopted for borrowing costs
Amount of borrowing costs capitalised during the PY
31. ICDS X - Provisions, Contingent Liabilities and
Contingent Assets
Scope
ICDS X deals with provisions, contingent liabilities and
contingent assets
ICDS X does not deal
with provisions,
contingent liabilities
and contingent assets
Resulting from financial instruments
Resulting from executory contracts
Arising in insurance business from
contracts with policyholders
Covered by another ICDS
ICDS X does not deal with the recognition of revenue which is dealt
in ICDS IV - Revenue Recognition
32. Provision, Liability and Contingent Assets
Provision Liability which can be measured only by using a substantial degree of estimation
Liability
Present obligation of the person arising from past events, the settlement of
which is expected to result in an outflow from the person of resources
embodying economic benefits.
Contingent
asset
Possible asset that arises from past events the existence of which will be
confirmed only by the occurrence or nonoccurrence of one or more uncertain
future events not wholly within the control of the person
33. Contingent Liability
A possible obligation that arises from past events and the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
person
A present obligation that arises from past events but is not recognised because:
• It is not reasonably certain that an outflow of resources embodying economic benefits will be required to
settle the obligation
• A reliable estimate of the amount of the obligation cannot be made
34. Recognition
A provision shall be
recognised only when
A person has a present obligation as a result of a past
event, and
It is reasonably certain that an outflow of resources
embodying economic benefits will be required to settle the
obligation, and
A reliable estimate can be made of the amount of the
obligation
No provision shall be recognised for costs that need to be incurred to operate in the future
Contingent Assets A person shall not recognise a contingent assets
Contingent Liabilities A person shall not recognise a contingent liability
Contingent assets are assessed continually and when it becomes reasonably certain that inflow of
economic benefit will arise, the asset and related income are recognised in the previous year in which the
change occurs
35. ICDS X vs AS 29
Points of Comparison ICDS X - Provision, Liability and Contingent
Assets
AS 29 - Provision, Liability and Contingent
Assets
Recognition of
provision
Provision shall be recognized when it
is reasonably certain that an outflow of
economic resources will not be required to
settle the obligation
Provision shall be recognized when it
is probable that an outflow of economic
resources will not be required to settle
the obligation
Recognition of
contingent asset
Contingent Asset is recognised when it
is reasonably certain that inflow of
economic benefit will arise
Contingent Asset is recognised when
inflow of economic benefit is virtually
certain
Reversal of provision If it is reasonably certain that an outflow of
economic resources will not be required to
settle the provision
If it is probable that an outflow of
economic resources will not be required
to settle the provision
As per IFRS, “probable” means event occurring or not occurring is greater than 50% whereas “virtually certain” means
95% or more
As per FASB, “reasonably certain” is defined as probability exceeding 75%-80%
36. ICDS X vs AS 29
Points of Comparison ICDS X - Provision, Liability and
Contingent Assets
AS 29 - Provision, Liability and Contingent
Assets
Reversal of
Contingent asset
If it is reasonably certain that an inflow of
economic benefits will not arise then
such asset and related income should be
reversed
If it is probable that an inflow of economic
benefits will not arise then such asset and
related income should be reversed
Onerous executory
contracts
No specific exclusion in ICDS Executory contracts are contracts under
which neither party has performed any of its
obligations or both parties have partially
performed their obligations to an equal
extent. This Standard does not apply to
executory contracts unless they are onerous
Restructuring
provisions
No provision Appropriate guidance is available in respect
of restructuring provisions
37. ICDS X - Disclosure
Following disclosure shall be made in respect of each class of provision
• A brief description of the nature of the obligation
• The carrying amount at the beginning and end of the PY
• Additional provisions made during the PY, including increases to existing provisions;
• Amounts used, that is incurred and charged against the provision, during the PY
• Unused amounts reversed during the PY
• The amount of any expected reimbursement, stating the amount of any asset that has been recognised for
that expected reimbursement
Following disclosure shall be made in respect of each class of asset and related income recognised
• A brief description of the nature of the asset and related income
• The carrying amount of asset at the beginning and end of the PY
• Additional amount of asset and related income recognised during the year, including increases to assets
and related income already recognised
• Amount of asset and related income reversed during the PY
38. Tax Audit Report
Examination or review of accounts of any business or profession
carried out by taxpayers
To ensure correctness of implementation and proper compliance
of tax provisions envisaged under the Act
Enables the tax authority for verification and assessments
39. Impact of ICDS on Tax Audit Report (Form 3CD)
Clause 13
Clause 14
• Method of accounting employed in the PY
• Whether there had been any change in the method of accounting employed
If there is change, details of such change, and the effect thereof on the profit or loss
• Adjustment required for Income computation and disclosure standards (ICDS) notified
under Sec 145(2)
Details of such adjustments
• Disclosures as per ICDS
• Method of valuation of closing stock employed in the PY
• In case of deviation from the method of valuation prescribed under Sec 145A (lower
of actual cost or net realisable value), the effect thereof on the profit or loss