This GAAP takes the viewer through the differences between Indian GAAP and IFRS under to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors
The document discusses several questions or cases related to consolidation of financial statements under IAS 27. It addresses questions about whether consolidated financial statements are required when subsidiaries are sold during the year or when a parent company has over 100 subsidiaries. It also discusses cases involving joint control of subsidiaries, situations where a parent owns over 50% voting power but does not intend to control the subsidiary, indirect ownership of a subsidiary, and how to treat intermediary subsidiaries that each own a portion of another subsidiary. Additional topics covered include goodwill calculation when control restrictions are later removed, whether consolidation is required if a company is fully funded but does not own equity, and definitions related to consolidated financial statements.
Prepared by CA Sandesh Mundra - An exhaustive presentation on Consolidation of Accounts covering the Standards - AS 21, AS23 and AS 27 with indepth analysis of the finer aspects involved.
The document provides solutions to questions on company law for an accounting technician exam in Malawi. It covers topics such as the duties of promoters, pre-incorporation contracts, the significance of a company's memorandum and articles of association, share certificates, share transfers, the principle of corporate personality, fixed and floating charges, receivers, prospectuses, and ways an individual can become or cease being a member of a company limited by shares. The solutions are detailed and provide explanations and references to relevant sections of Malawi's Companies Act.
This document discusses the roles and responsibilities of external auditors. It begins by explaining that external auditors provide reasonable but not absolute assurance that financial statements are free from material misstatement. It then covers auditor competency, the different types of audit reports, and the purpose of the audit report. Finally, it discusses public company oversight by the PCAOB and key auditing standards. The document provides an overview of the expectations and regulatory requirements for external auditors.
Employee stock option plans (ESOPs) are used by companies to attract, motivate, and retain employees. There are several types of ESOPs that provide equity incentives like stock options, stock purchase plans, restricted stock units, and stock appreciation rights. Key aspects of ESOPs include how they are granted and vested over time, tax implications, regulatory requirements, and accounting treatment. ESOPs must be implemented according to the rules for listed and unlisted companies set out by the Companies Act, Income Tax Act, SEBI, and other regulatory bodies to ensure proper governance and compliance.
The document discusses several questions or cases related to consolidation of financial statements under IAS 27. It addresses questions about whether consolidated financial statements are required when subsidiaries are sold during the year or when a parent company has over 100 subsidiaries. It also discusses cases involving joint control of subsidiaries, situations where a parent owns over 50% voting power but does not intend to control the subsidiary, indirect ownership of a subsidiary, and how to treat intermediary subsidiaries that each own a portion of another subsidiary. Additional topics covered include goodwill calculation when control restrictions are later removed, whether consolidation is required if a company is fully funded but does not own equity, and definitions related to consolidated financial statements.
Prepared by CA Sandesh Mundra - An exhaustive presentation on Consolidation of Accounts covering the Standards - AS 21, AS23 and AS 27 with indepth analysis of the finer aspects involved.
The document provides solutions to questions on company law for an accounting technician exam in Malawi. It covers topics such as the duties of promoters, pre-incorporation contracts, the significance of a company's memorandum and articles of association, share certificates, share transfers, the principle of corporate personality, fixed and floating charges, receivers, prospectuses, and ways an individual can become or cease being a member of a company limited by shares. The solutions are detailed and provide explanations and references to relevant sections of Malawi's Companies Act.
This document discusses the roles and responsibilities of external auditors. It begins by explaining that external auditors provide reasonable but not absolute assurance that financial statements are free from material misstatement. It then covers auditor competency, the different types of audit reports, and the purpose of the audit report. Finally, it discusses public company oversight by the PCAOB and key auditing standards. The document provides an overview of the expectations and regulatory requirements for external auditors.
Employee stock option plans (ESOPs) are used by companies to attract, motivate, and retain employees. There are several types of ESOPs that provide equity incentives like stock options, stock purchase plans, restricted stock units, and stock appreciation rights. Key aspects of ESOPs include how they are granted and vested over time, tax implications, regulatory requirements, and accounting treatment. ESOPs must be implemented according to the rules for listed and unlisted companies set out by the Companies Act, Income Tax Act, SEBI, and other regulatory bodies to ensure proper governance and compliance.
Advance Accounting b.com part 2 chapter 5 notes Mehar Irfan
The document provides information about accounting for company reconstruction and capital reduction in 3 sections. It begins by outlining the syllabus and exam questions on the topic. Next, it defines and provides examples of journal entries for capital reduction, including reducing share capital value and writing off accounts. Finally, it includes practice questions and solutions for journal entries and revised balance sheets after reconstruction.
Ind AS 103 establishes principles and requirements for how an acquirer recognizes and measures identifiable assets acquired, liabilities assumed, and any non-controlling interest in an acquiree. It also provides guidance on how to recognize and measure goodwill or gain on a bargain purchase. The standard applies to business combinations but not to acquisitions of assets or groups of assets that do not constitute a business. Under the acquisition method, the acquirer recognizes and measures identifiable assets acquired and liabilities assumed at their acquisition-date fair values.
The document proposes several changes to tax laws regarding amalgamation, demerger, and slump sales of business undertakings between companies. For amalgamation, it proposes relaxing the shareholder approval requirement from 90% to 75% value of shares. For demerger, it proposes defining demerger and making it tax neutral subject to certain conditions. It also proposes tax treatment for transfers of various assets and costs like losses, depreciation, R&D expenditure in amalgamation and demerger. For slump sales, it proposes treating gains above 36 months as long term capital gains taxed at 20% versus normal rates for shorter periods.
This document discusses share capital and provides guidance on auditing share capital. It defines share capital as funds raised by issuing shares in exchange for cash or other considerations. Share capital can include both common and preferred shares and the amount can change as new shares are issued. The document then provides details on authorized share capital and how it differs from issued share capital. It outlines steps auditors should take to verify share capital is properly classified, authorized share movements are correctly recorded, reserves are properly disclosed, and legal requirements are met. Key points for auditing share capital include checking board minutes, testing share applications to cashbook entries, and verifying compliance with company regulations.
The document provides information about accounting for companies, specifically regarding the issuance of shares and debentures. It defines key terms like shares, share capital, ordinary shares, preference shares, and debentures. It also provides sample journal entries for issuing shares at par value, premium, and discount. Examples are given for recording the issuance of shares and any refunds required. The document is intended to outline the accounting treatment for common share and debenture transactions that may be asked about in exams.
This document discusses rules and procedures related to dividends, accounts, audits, and related topics for companies. It outlines the key rules for declaring and paying dividends, maintaining proper accounts and books, appointing qualified auditors, and the duties and liabilities of auditors in examining a company's financial affairs and reporting to shareholders.
Within a business, the managing director oversees daily operations to accomplish goals set by the board of directors, while the CEO provides the overall strategic vision. Both are top executive roles, with the managing director focused on operations and the CEO on goals and strategy. An auditor examines a company's accounts and provides an annual report to shareholders on the company's financial position. Auditors must be qualified chartered accountants and have rights like access to records and attendance at shareholder meetings to perform their examination. They have duties like inquiring about transactions and reporting on financial statements, and can be removed by shareholders or resign.
The document discusses legal aspects and practical considerations related to private placement and preferential allotment of securities by companies in India. It summarizes key regulations governing private placement under the Companies Act, 2013 and SEBI regulations. It also outlines the procedural requirements for preferential allotment as per the Companies Act and ICDR regulations. Finally, it addresses some practical difficulties companies may face regarding compliance with the relevant laws and regulations.
A buyback, also known as a share repurchase, occurs when a company buys back its own outstanding shares from investors to reduce the number of shares available on the open market. Companies may do this to increase share value for remaining investors by reducing supply, or to prevent other shareholders from gaining control. The document outlines the legal provisions and process for companies in India to conduct a buyback according to the Companies Act and SEBI regulations, including establishing a capital redemption reserve and restrictions on further share issues. It provides examples of companies that have announced buybacks during the COVID-19 pandemic.
Advance Accounting b.com part 2 chapter 4 notes Mehar Irfan
This document provides information about accounting for company absorption. It defines absorption as when one company acquires another and the acquired company ceases to exist while the acquiring company continues. It discusses purchase consideration, which is the amount paid by the new company, and can be calculated via net asset method or lump sum method. It provides journal entries for both the old and new companies, and includes two illustrations applying the concepts to example company mergers.
The Poliwogg Regenerative Medicine Fund is a new business development company seeking $60 million in an initial public offering to invest in public and private regenerative medicine companies. The Fund will be managed by Poliwogg Advisers and aims to maximize long-term capital appreciation by investing in equity and equity-linked securities of companies involved in stem cell science and regenerative medical technologies. Investing in the high-growth regenerative medicine sector provides exposure to innovative healthcare companies addressing unmet medical needs through cell therapies, gene therapies, and other regenerative technologies.
Fundraising for businesses was an arbitrary practice without any formal guidelines and regulations before Companies Act 2013. Due to lacunae of legal provisions in Companies Act 1956, many a times, corporate with fraudulent mindset have found their way to dupe investors and public of their hard-earned money. It has created many legal disputes and controversies.
Now, new Companies Act and the consequent rules have formally covered all the modes of fund-raising and have tried to fill in the loopholes of old law. Stringent rules and cumbersome compliances are to ensure safeguard of the public money and restrict the malpractices. But these provisions have created confusion in respect of implementation and compliances. The easy availability of funds for businesses in real need has also dried up. MCA must come out some clarification to give breathing time to companies specifically for private companies.
The document discusses various provisions related to the issue of capital by companies under Indian law. It covers topics like the memorandum of association, capital clause, alteration of capital clause, reduction of share capital, variation in rights of shareholders, prospectus, and allotment of shares. Key points include that the memorandum defines and limits a company's powers, a capital clause states the share capital amount and structure, and special provisions under law regulate the initial and subsequent allotment of shares offered to the public.
This document discusses accounting standard 14 regarding accounting for amalgamations in India. It describes the purpose as treatment of goodwill or reserves from amalgamations. It defines two types of amalgamations - merger and purchase. For a merger, assets and liabilities are transferred at book value and shareholders hold over 90% equity. For a purchase, assets and liabilities are recorded at fair value on the date of amalgamation. The pooling of interests method records assets at book value, while the purchase method may use book or fair values. Goodwill or capital reserve is recognized depending on if consideration is more or less than net assets. Disclosure requirements are also outlined.
This document discusses corporate restructuring tools like takeovers, buybacks, and delisting. It defines takeovers as the acquisition of substantial shares and control over a target company. Buybacks allow companies to buy back their own shares from existing shareholders. Delisting is the removal of a company's stock from a stock exchange. The key regulations governing these tools in India are the SEBI Takeover Code, Companies Act provisions on buybacks, and SEBI Delisting Regulations. The document outlines the processes, requirements, and methods involved in takeovers, buybacks and delisting.
AC102 PPT8 - Partnership Liquidation Lump Sum (PPT from Sir Leandro Fua) Carla
The document provides details about the liquidation of the partnership firm of Encina, Endrada, and Elina. It includes their statement of financial position before liquidation begins and statements of liquidation showing the realization of assets, distribution of gains or losses, payment of liabilities, and distribution of cash to partners under different scenarios of asset sale prices and treatment of capital deficiencies.
Fundraising through SME Exchange Platform Sumedha Fiscal
This document discusses the process of fundraising through an SME exchange platform. It begins with an overview of the stages of SME fundraising and the chronicle of SME exchanges in India. It then discusses some of the key challenges SMEs face in listing, the benefits of listing, eligibility criteria, and the roles of merchant bankers. It provides details on the listing procedure and getting prepared for listing. It also compares SME exchanges to the main board and discusses important post-listing considerations like corporate governance. Finally, it outlines the typical stages involved in an SME IPO process.
Appointment/Re-appointment of Auditors under the Companies Act, 2013Manoj Singh Bisht
The document discusses key provisions related to the appointment and re-appointment of auditors under the Companies Act 2013.
Some key points discussed include:
- The appointment of first auditors for government and non-government companies.
- Filling casual vacancies for auditors.
- Rotation of auditors and limits on consecutive terms for individuals and audit firms.
- Interpreting provisions around re-appointing retiring auditors and conditions for disqualification.
- Guidance on interpreting non-obstante clauses and provisos in the Act.
This document discusses the different types of meetings held in companies. It describes statutory meetings, annual general meetings, and extraordinary general meetings that are held for shareholders. It also discusses board meetings and committee meetings for directors. Special meetings include class meetings for different types of shareholders and creditors meetings. The document provides details on the definition, purpose, notice requirements and proceedings of these various company meetings.
The document discusses auditing bank branches in a computerized information system environment. It covers developments in banking IT systems, the differences between financial and information system audits, risks in computerized environments, and practical approaches for auditing computerized branches effectively. Key points include reviewing system controls, access rights, backups, reconciliations between primary and subsidiary ledgers, and generating and examining system reports.
Corporate Governance through Consolidationsandesh mundra
This file explains the concept of consolidation in a very detailed manner. Highlighting the importance of consolidation through automated means so that the organisation is able to take the right decisions on time rather than spend a lot of time preparing CFS.
Advance Accounting b.com part 2 chapter 5 notes Mehar Irfan
The document provides information about accounting for company reconstruction and capital reduction in 3 sections. It begins by outlining the syllabus and exam questions on the topic. Next, it defines and provides examples of journal entries for capital reduction, including reducing share capital value and writing off accounts. Finally, it includes practice questions and solutions for journal entries and revised balance sheets after reconstruction.
Ind AS 103 establishes principles and requirements for how an acquirer recognizes and measures identifiable assets acquired, liabilities assumed, and any non-controlling interest in an acquiree. It also provides guidance on how to recognize and measure goodwill or gain on a bargain purchase. The standard applies to business combinations but not to acquisitions of assets or groups of assets that do not constitute a business. Under the acquisition method, the acquirer recognizes and measures identifiable assets acquired and liabilities assumed at their acquisition-date fair values.
The document proposes several changes to tax laws regarding amalgamation, demerger, and slump sales of business undertakings between companies. For amalgamation, it proposes relaxing the shareholder approval requirement from 90% to 75% value of shares. For demerger, it proposes defining demerger and making it tax neutral subject to certain conditions. It also proposes tax treatment for transfers of various assets and costs like losses, depreciation, R&D expenditure in amalgamation and demerger. For slump sales, it proposes treating gains above 36 months as long term capital gains taxed at 20% versus normal rates for shorter periods.
This document discusses share capital and provides guidance on auditing share capital. It defines share capital as funds raised by issuing shares in exchange for cash or other considerations. Share capital can include both common and preferred shares and the amount can change as new shares are issued. The document then provides details on authorized share capital and how it differs from issued share capital. It outlines steps auditors should take to verify share capital is properly classified, authorized share movements are correctly recorded, reserves are properly disclosed, and legal requirements are met. Key points for auditing share capital include checking board minutes, testing share applications to cashbook entries, and verifying compliance with company regulations.
The document provides information about accounting for companies, specifically regarding the issuance of shares and debentures. It defines key terms like shares, share capital, ordinary shares, preference shares, and debentures. It also provides sample journal entries for issuing shares at par value, premium, and discount. Examples are given for recording the issuance of shares and any refunds required. The document is intended to outline the accounting treatment for common share and debenture transactions that may be asked about in exams.
This document discusses rules and procedures related to dividends, accounts, audits, and related topics for companies. It outlines the key rules for declaring and paying dividends, maintaining proper accounts and books, appointing qualified auditors, and the duties and liabilities of auditors in examining a company's financial affairs and reporting to shareholders.
Within a business, the managing director oversees daily operations to accomplish goals set by the board of directors, while the CEO provides the overall strategic vision. Both are top executive roles, with the managing director focused on operations and the CEO on goals and strategy. An auditor examines a company's accounts and provides an annual report to shareholders on the company's financial position. Auditors must be qualified chartered accountants and have rights like access to records and attendance at shareholder meetings to perform their examination. They have duties like inquiring about transactions and reporting on financial statements, and can be removed by shareholders or resign.
The document discusses legal aspects and practical considerations related to private placement and preferential allotment of securities by companies in India. It summarizes key regulations governing private placement under the Companies Act, 2013 and SEBI regulations. It also outlines the procedural requirements for preferential allotment as per the Companies Act and ICDR regulations. Finally, it addresses some practical difficulties companies may face regarding compliance with the relevant laws and regulations.
A buyback, also known as a share repurchase, occurs when a company buys back its own outstanding shares from investors to reduce the number of shares available on the open market. Companies may do this to increase share value for remaining investors by reducing supply, or to prevent other shareholders from gaining control. The document outlines the legal provisions and process for companies in India to conduct a buyback according to the Companies Act and SEBI regulations, including establishing a capital redemption reserve and restrictions on further share issues. It provides examples of companies that have announced buybacks during the COVID-19 pandemic.
Advance Accounting b.com part 2 chapter 4 notes Mehar Irfan
This document provides information about accounting for company absorption. It defines absorption as when one company acquires another and the acquired company ceases to exist while the acquiring company continues. It discusses purchase consideration, which is the amount paid by the new company, and can be calculated via net asset method or lump sum method. It provides journal entries for both the old and new companies, and includes two illustrations applying the concepts to example company mergers.
The Poliwogg Regenerative Medicine Fund is a new business development company seeking $60 million in an initial public offering to invest in public and private regenerative medicine companies. The Fund will be managed by Poliwogg Advisers and aims to maximize long-term capital appreciation by investing in equity and equity-linked securities of companies involved in stem cell science and regenerative medical technologies. Investing in the high-growth regenerative medicine sector provides exposure to innovative healthcare companies addressing unmet medical needs through cell therapies, gene therapies, and other regenerative technologies.
Fundraising for businesses was an arbitrary practice without any formal guidelines and regulations before Companies Act 2013. Due to lacunae of legal provisions in Companies Act 1956, many a times, corporate with fraudulent mindset have found their way to dupe investors and public of their hard-earned money. It has created many legal disputes and controversies.
Now, new Companies Act and the consequent rules have formally covered all the modes of fund-raising and have tried to fill in the loopholes of old law. Stringent rules and cumbersome compliances are to ensure safeguard of the public money and restrict the malpractices. But these provisions have created confusion in respect of implementation and compliances. The easy availability of funds for businesses in real need has also dried up. MCA must come out some clarification to give breathing time to companies specifically for private companies.
The document discusses various provisions related to the issue of capital by companies under Indian law. It covers topics like the memorandum of association, capital clause, alteration of capital clause, reduction of share capital, variation in rights of shareholders, prospectus, and allotment of shares. Key points include that the memorandum defines and limits a company's powers, a capital clause states the share capital amount and structure, and special provisions under law regulate the initial and subsequent allotment of shares offered to the public.
This document discusses accounting standard 14 regarding accounting for amalgamations in India. It describes the purpose as treatment of goodwill or reserves from amalgamations. It defines two types of amalgamations - merger and purchase. For a merger, assets and liabilities are transferred at book value and shareholders hold over 90% equity. For a purchase, assets and liabilities are recorded at fair value on the date of amalgamation. The pooling of interests method records assets at book value, while the purchase method may use book or fair values. Goodwill or capital reserve is recognized depending on if consideration is more or less than net assets. Disclosure requirements are also outlined.
This document discusses corporate restructuring tools like takeovers, buybacks, and delisting. It defines takeovers as the acquisition of substantial shares and control over a target company. Buybacks allow companies to buy back their own shares from existing shareholders. Delisting is the removal of a company's stock from a stock exchange. The key regulations governing these tools in India are the SEBI Takeover Code, Companies Act provisions on buybacks, and SEBI Delisting Regulations. The document outlines the processes, requirements, and methods involved in takeovers, buybacks and delisting.
AC102 PPT8 - Partnership Liquidation Lump Sum (PPT from Sir Leandro Fua) Carla
The document provides details about the liquidation of the partnership firm of Encina, Endrada, and Elina. It includes their statement of financial position before liquidation begins and statements of liquidation showing the realization of assets, distribution of gains or losses, payment of liabilities, and distribution of cash to partners under different scenarios of asset sale prices and treatment of capital deficiencies.
Fundraising through SME Exchange Platform Sumedha Fiscal
This document discusses the process of fundraising through an SME exchange platform. It begins with an overview of the stages of SME fundraising and the chronicle of SME exchanges in India. It then discusses some of the key challenges SMEs face in listing, the benefits of listing, eligibility criteria, and the roles of merchant bankers. It provides details on the listing procedure and getting prepared for listing. It also compares SME exchanges to the main board and discusses important post-listing considerations like corporate governance. Finally, it outlines the typical stages involved in an SME IPO process.
Appointment/Re-appointment of Auditors under the Companies Act, 2013Manoj Singh Bisht
The document discusses key provisions related to the appointment and re-appointment of auditors under the Companies Act 2013.
Some key points discussed include:
- The appointment of first auditors for government and non-government companies.
- Filling casual vacancies for auditors.
- Rotation of auditors and limits on consecutive terms for individuals and audit firms.
- Interpreting provisions around re-appointing retiring auditors and conditions for disqualification.
- Guidance on interpreting non-obstante clauses and provisos in the Act.
This document discusses the different types of meetings held in companies. It describes statutory meetings, annual general meetings, and extraordinary general meetings that are held for shareholders. It also discusses board meetings and committee meetings for directors. Special meetings include class meetings for different types of shareholders and creditors meetings. The document provides details on the definition, purpose, notice requirements and proceedings of these various company meetings.
The document discusses auditing bank branches in a computerized information system environment. It covers developments in banking IT systems, the differences between financial and information system audits, risks in computerized environments, and practical approaches for auditing computerized branches effectively. Key points include reviewing system controls, access rights, backups, reconciliations between primary and subsidiary ledgers, and generating and examining system reports.
Corporate Governance through Consolidationsandesh mundra
This file explains the concept of consolidation in a very detailed manner. Highlighting the importance of consolidation through automated means so that the organisation is able to take the right decisions on time rather than spend a lot of time preparing CFS.
This presentation was taken for CA attending the GMCS 14 Day batch. The presentation takes the students through some of the finer aspects of professional's life.
The document discusses various topics related to information technology in India including:
1. Anil and Saif had to redo dubbing for the movie "Race" after a hard disk crash erased the original dubbing.
2. The US defence department has banned Google from filming details of its military bases.
3. The government plans to upgrade hospitals and develop software for better access to medical information and connectivity between universities.
4. The document focuses on the increasing role of technology in media, education, and various industries like banking.
Through this presentation we intend to introduce our new software on preparation of Consolidated Financial Statements. This web based software automates all the processes involved in consolidation like Goodwill / Minority / Proportionate Consolidation / Equity Impact Entries / Line By Line presentation. We also intend to cover all the GAAP's through this.
Internal auditing involves independently and objectively evaluating an organization's operations to improve efficiency and effectiveness. It assesses risk management, controls, and governance processes to help the organization achieve its objectives. Internal auditing adds value by bringing a systematic approach to evaluate and improve these processes. The document then provides examples of how internal audit evaluates areas like operational expenses, investments, and revenue leakage at a cable TV company. It examines processes for purchasing, stores management, and controls over expenses, capital expenditures, and revenue streams.
This presentation takes you through the impact of Technology on Audit Environment. There are lot of slides from Tally which is an eye opener in the sense, that how a cheap software like Tally can be effectively used for Audit purposes like planning, documentation, query management. There is also some sharing on what is seen in SAP Environment.
This article takes the viewer through the Accounting Aspects related to Insurance under IFRS and the Income Tax requirements in India. It also touches upon the Direct Tax Code and its impact on Insurance based deductions.
This presentation takes one through the basic e-filing procedures under the Income Tax Rules prevailing in India. It explains the concepts in a very simplified manner.
AS vs IND AS (Old vs New Indian Accounting Standards)sandesh mundra
This presentation takes one through the differences between Indian GAAP (old) vs IND AS (based on IFRS). All major differences have been covered in addition to IFRS carve outs.
This presentation takes one through the impact of budget 2014 on the direct tax provisions. Efforts have been made to simplify the amendments in the best way
Service tax on Works Contract (Post Negative List)sandesh mundra
This article briefly explains the basics of service tax on works contract after the negative list regime. Also covering some of the old disputed issues in the service tax regime. It also touches upon the basic aspects of Cenvat Credit moreso in an environment, where both taxable and exempt services are being rendered.
This ppt explains in very brief the facts about GST implementation in India. The taxes which shall be subsumed within GST and the present taxes which shall remain out of GST ambit.
Service tax on works contract (Pre-Negative List)sandesh mundra
This ppt gives a glimpse of service tax payment in india as applicable to works contractors before the negative list. This is very relevant to builders and developers. Service Tax posers and illustrations were also covered by the speaker during the presentation.
This document summarizes a Supreme Court judgement regarding the classification of contracts for the supply and installation of elevators as either works contracts or sales contracts.
The majority view of the Supreme Court bench overruled a previous judgement that had classified such contracts as sales. The majority held that contracts for the supply and installation of elevators should be treated as works contracts, not sales, as they satisfy the characteristics of works contracts under the Constitution.
A minority view dissented, stating that the installation work in such contracts was insignificant and it was akin to incidental work like installing a fan, therefore it should be considered a sale. However, the majority view held that once a contract meets the characteristics of a works contract, additional obligations
This presentation discusses the intricacies involved and the modifications in the taxation of works contract in various VAT Regimes. It highlights the critical issues to be asked when a project company enters into any state for its operations.
This presentations discusses the finer aspects of how VAT was being levied on Works contract. And the controversies related to the judgement of Gannon Dunkerly, options available for deductions under VAT for composite contracts
EY - SEC reporting update - 2017 trends in SEC comment lettersJulien Boucher
Our SEC Reporting Update publication highlights the SEC staff’s increased focus on non-GAAP financial measures over the last year and discusses emerging topics such as the new revenue standard and cybersecurity. The publication also explains the nature of the staff’s common comments on segment reporting, income taxes and management’s discussion and analysis. It also notes the continuing trend for the SEC staff to issue fewer comment letters than in the previous year.
The past year was relatively quiet in terms of tax changes, but the IRS remained active. A number of proposed and final regulations were issued that could significantly impact your tax planning strategies.
Our 2017 Business Tax Planning Supplement recaps these and other major developments from the past year and provides rates, tables and other information for future planning. Highlights include:
Permanent, temporary and expiring tax provisions
Tax form due date changes
Affordable Care Act implementation
The past year has been an active one for accounting standards updates (ASUs). Fortunately for those preparing for year end, the fourth quarter only had one ASU issued and the majority of the 17 updates issued by the Financial Accounting Standards Board (FASB) during 2015 are narrow in scope or simplifications of existing standards.
The New Year promises broader changes from the FASB, however. Major projects, including the Leasing Standard have been approved and are pending publication in early 2016.
Strategizing for Global Financial Reporting Changes: 8 Steps You Can Take Now...Sikich LLP
There are new revenue recognition standards coming in a few years, but depending on your reporting periods, they might not be too far off. Here are 8 essential steps you can take to prepare your organization, as a CFO, for these new standards before they are enacted.
Tax Reform: What you can do now and how to plan aheadPlante Moran
Wondering how the new tax reform legislation impacts your business? Do you have a clear idea of what you need to do, how, and by when? Our tax reform playbook can help.
Ask us about tax reform: www.plantemoran.com/ask
Guide to First Time Adoption of Ind AS 109Ernst & Young
Read the salient features of IND AS 109 roadmap noticed by the MCA & the practical issues and perspective. For more details, visit http://bit.ly/1KZGlHY.
This document provides an overview and guide to first-time adoption of Indian Accounting Standards (Ind AS). It discusses the key differences between Ind AS and Indian GAAP, the process for first-time adoption of Ind AS including preparation of the opening Ind AS balance sheet, and some of the challenges companies may face in the conversion process. The guide is intended to help companies understand and successfully transition to Ind AS reporting.
IAS 8 Accounting policies, changes in accounting estimates and errors.pdfPriyaBhavani2
This document discusses key aspects of IAS 8 including definitions of accounting policies, changes in accounting estimates, and errors. It covers how to account for changes in accounting policies, estimates, and errors. For changes in policies, it discusses whether the change is mandatory or voluntary and how to apply the change retrospectively or prospectively. It also provides the disclosure requirements for changes in policies, estimates, and corrections of errors.
The amended CSR rules introduce several changes that will impact how companies recognize and fulfill their CSR obligations:
1. Companies must now spend their entire CSR obligation for the year, with any unspent amount required to be transferred to specified government funds.
2. The definition of CSR now includes a "negative list" that excludes certain activities such as normal business activities or political donations from qualifying as CSR expenditures.
3. Implementing agencies must now be registered with relevant authorities, and companies will need to verify the registrations of these agencies. Any spend through unregistered agencies may not count toward a company's CSR obligation.
4. Companies will need to review their policies, processes, and financial closing procedures to ensure
An Entrepreneur is confused about what to do now especially when the time is volatile, uncertain, and unpredictable. This presentation provides a direction in which an entrepreneur can start thinking and start planning to take various steps.
Inderjit Toor - Resume and Cover Letter LinkedinInder Toor
Inderjit Toor is a Certified Management Accountant with over 10 years of progressive accounting and financial analysis experience. He has held senior financial roles at organizations like BC Hydro, P2Solar, and AMC Insurance. He possesses advanced skills in accounting software, ERP systems and Microsoft Excel. Currently, he is interested in a stable position to utilize his extensive experience and skills to make a positive impact.
Our 2016 Business Tax Planning Supplement recaps these and other major developments from the past year and provides rates, tables and other information to assist in future planning. Highlights include:
- Summary of changes to the tax extenders
- Revised rules for partnership IRS audits
- Changes to the tangible property regulations
- Overview of ACA reporting requirements
This document provides information about an assignment solving service and contact details. It lists assignments from subjects like marketing, finance, accounting, economics, and human resources. It provides sample assignments on topics such as developing a service marketing mix for a life insurance company, mutual fund investment benefits, financial planning advice for a client, capital budgeting, working capital management, cost accounting, financial markets and institutions, labour laws, and manpower planning. It also provides the website, email, phone number, and WhatsApp contact for the assignment solving service. Students can get their assignments solved at a nominal cost by contacting the provided details.
Indian Accounting standard -Introduction.pptxKavita Singh
This document discusses the transition to Indian Accounting Standards (Ind AS) in India. It provides an overview of the Ind AS roadmap, including the phases of applicability for different types and sizes of companies. It outlines the objectives of the session to understand the Ind AS overview, roadmap, reasons for adoption, key features of Ind AS, and impact of transitioning to Ind AS. The document also summarizes some of the salient features of Ind AS such as its principles-based approach and emphasis on fair valuation and substance over form.
Investors will no longer be required to retroactively apply the equity method of accounting when their existing unconsolidated equity investment first qualifies for its use. The new guidance comes in Financial Accounting Standards Board (FASB)’s Accounting Standards Update (ASU) 2016-07, Investments- Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting.
An entity may increase its investment in equity securities of an entity or another change may occur that causes it to obtain significant influence over another entity that triggers an existing equity investment to qualify for the use of equity method in accounting. U.S. Generally Accepted Accounting Principles (GAAP) asks that when the investor transitions to the equity method because it gains significant influence over an investee, the investor must adjust the investment, results of the operations and retained earnings as if the equity method had been used since the investor’s original investment. The retroactive application of the equity method was often costly and difficult to apply.
FA II - Chapter 6; IAS 8.pptx best presentationKalkaye
IAS 8 provides guidance on accounting policies, changes in accounting estimates, and correction of errors. It establishes the hierarchy for selecting accounting policies giving priority to applicable IFRS standards. Changes in accounting policies are generally accounted for retrospectively while changes in estimates are accounted for prospectively. Errors in prior period financial statements are corrected retrospectively.
The biggest accounting changes coming out of the third quarter affected not-for-profit organizations, but other projects received minor updates, too. In addition, several exposure drafts have been issued, including the expected exposure draft of targeted improvements to hedge accounting.
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Google 2016 annual report-target corporate to get all the necessary information
Analysis fo year 2017
Balance Sheet (values in 000\'s)
period ending
1/28/2017
current assets
cash and cash equivalents
2,512,000
short-term investments
0
net receivables
0
inventory
8,039,000
Other Current Assets
1,169,000
Total Current Assets
11,990,000
Long-Term Assets
Long-Term Investments
0
Fixed Assets
24,658,000
Goodwill
0
Intangible Assets
0
Other Assets
783,000
Deferred Asset Charges
0
Total Assets
37,431,000
Current Liabilities
Accounts Payable
10,989,000
Short-Term Debt / Current Portion of Long-Term Debt
1,718,000
Other Current Liabilities
1,000
Total Current Liabilities
12,708,000
Long-Term Debt
11,031,000
11,945,000
Other Liabilities
1,878,000
Deferred Liability Charges
861,000
Misc. Stocks
0
Minority Interest
0
Total Liabilities
26,478,000
Stock Holders Equity
Common Stocks
46,000
Capital Surplus
5,661,000
Retained Earnings
5,884,000
Treasury Stock
0
Other Equity
($638,000)
Total Equity
10,953,000
Total Liabilities & Equity
37,431,000
Cash flow (values in000\'s)
period ending
1/28/2017
Net Income
2,737,000
Cash Flows-Operating Activities
Depreciation
2,298,000
Net Income Adjustments
508,000
Changes in Operating Activities
Accounts Receivable
0
Changes in Inventories
293,000
Other Operating Activities
36,000
Liabilities
($543,000)
Net Cash Flow-Operating
5,436,000
Cash Flows-Investing Activities
Capital Expenditures
($1,547,000)
Investments
28,000
Other Investing Activities
46,000
Net Cash Flows-Investing
$1,473,000)
Cash Flows-Financing Activities
Sale and Purchase of Stock
($3,485,000)
Net Borrowings
($664,000)
Other Financing Activities
0
Net Cash Flows-Financing
($5,497,000)
Effect of Exchange Rate
0
Net Cash Flow
($1,534,000)
IV. Adjusting Entries:
A. Explain the type of depreciation method Target Corporation uses and why they use this
method.
B. Identify an example of an adjusting entry (other than depreciation), such as prepaid expenses,
supplies, or unearned revenue, and whether or not Target Corporation has this account listed on
the balance sheet. You could consider why this might not be listed.
VI. Communication: For this part of the assessment, you will prepare memorandums to upper
management addressing certain scenarios or situations.
A. As the controller of Target Corporation, compose a memo to the CEO addressing the
advantages and disadvantages of transitioning from GAAP to IFRS.
B. As the controller of Target Corporation, compose a memo to the CEO addressing the
following scenario: Your biggest customer has just gone bankrupt, and you must inform the CEO
how this will affect your accounts receivable. Assume that the accounts receivable balance is at
least $100,000.
When writing your paper considers the following:
A company may use several different depreciation methods or just one. This information will be
disclosed in the notes. If the company has not explained why they use the method, you will want
to consider the pros and cons of t.
ScenarioBranson Ltd. is a public listed tour company that is bas.docxjeffsrosalyn
Scenario
Branson Ltd. is a public listed tour company that is based in Melbourne. One of its main operating businesses is to provide tourists with hot-air balloon flights over the city. As their current balloons are due to be retired, they must decide whether to replace them with a large or small model. New balloons have an expected life of 8 years, after which salvage values are $70,000 for the large balloons and $45,000 for the small balloons. Market research has estimated that there is a 60% probability that demand will be high throughout the useful life of the balloons, and a 40% probability that demand will be low throughout the useful life of the balloons.
The large model is expected to cost $900,000, with an extra installation and shipping cost of $80,000. The small model is expected to cost $650,000, with an additional installation and shipping cost of $45,000. The company's accounting policy is to depreciate using the reducing balance approach of 20% per annum.1 There is also an initial increase in net working capital of $70,000 for the large model, and $40,000 for the small model. The net working capital is recoverable at the end of their useful life.
In the event of high demand, the company expects a yearly operating revenue of $800,000 for the large model, and a yearly operating revenue of $330,000 for the small model. If the demand is low, yearly operating revenue is forecasted to be $700,000 for the large model and $280,000 for the small model. Annual variable and fixed costs associated with operating these balloons are expected to be $400,000 for the large model and $150,000 for the small model. In addition, if the large model is preferred over the small model, the company needs to rent an additional warehouse to store the large balloons. A new warehouse’s rental cost is expected to be $150,000 per year. At the end of year four, there is also an option to cease operation and thus sell the large balloons for $500,000 and the small balloons for $400,000 if the business is not profitable.
The company requires you to calculate an appropriate discount rate using the company’s weighted average cost of capital. The company’s capital structure has remained fairly stable, with a debt-to-equity ratio of 1.2. The company has no plan to adjust its capital structure in the future. Given that the company is listed on the stock exchange, you are able to obtain the historical returns over the last 20 years for the company, the market portfolio and the risk-free asset as tabulated in Table 1. The company debentures have a face value of $1000 and a coupon rate of 10%. They mature in 10 years' time. Similar debentures are currently yielding 12%. The company tax rate is 30%.
1 As discussed in Week 5, ignore residual value in the calculation of yearly depreciation.
Table 1
Year
Branson
Market
Risk-free
1999
23.13%
13.81%
6.01%
2000
19.55%
12.77%
6.31%
2001
10.08%
7.65%
5.62%
2002
-19.35%
-10.64%
5.84%
2003
25.01%
14.61%
5.37%
2004
29.21%
29.
Snehil Patni is seeking an entry-level position in accounts and finance. He has over 4 years of experience in accounting, taxation, and auditing. He is a qualified CA and CS. His experience includes statutory audits, internal audits, tax audits, and preparation of financial statements. He is proficient in accounting software and packages like Tally.
With the introduction of the concept of GST Audit, it is important to know and taken int consideration various facts that is needed before we conduct GST Audit. In this presentation, we have covered the concept of filing of GSTR 9C, its applicability and various other topics that one should take care of. The presentation also covers an example of GSTR 9C based upon a hypothetical case. The PPT is a one shot compilation of various topics associated with GSTR 9C - GST Audit.
With the introduction of the concept of GST Audit, it is important to know and taken int consideration various facts that is needed before we conduct GST Audit. In this presentation, we have covered the concept of filing of GSTR 9C, its applicability and various other topics that one should take care of. The presentation also covers an example of GSTR 9C based upon a hypothetical case. The PPT is a one shot compilation of various topics associated with GSTR 9C - GST Audit.
This document contains financial statements and additional notes related to income, expenses, input tax credit, and sales for a business. It includes a balance sheet, input tax credit ledger, and profit and loss statement for the period of April 2017 to March 2018. The additional notes provide clarifications on revenue and expense amounts, import of services, credit notes, discounts, sales booking and billing dates, annual return details, blocked and reversed input tax credits, and taxable rates.
With the introduction of the concept of GST Audit, it is important to know and taken int consideration various facts that is needed before we conduct GST Audit. In this presentation, we have covered the concept of filing of GSTR 9C, its applicability and various other topics that one should take care of. The presentation also covers an example of GSTR 9C based upon a hypothetical case. The PPT is a one shot compilation of various topics associated with GSTR 9C - GST Audit.
In this presentation, the concept of Affordable Housing is discussed from various angles such as income tax and GST. The PPT also analyses various components of Affordable housing scheme. It also takes into consideration various practical scenarios which are discussed in the form of case studies. The affordability as per public lending institution has also been covered. The presentation also covers various policies and programmes undertaken by the government for promotion of the same.Lastly, it also covers the impact of anti profiteering under the scheme.
After introduction of RERA, West Bengal has come up with its own legislation West Bengal Housing Industry Regulatory Act, 2017. There are various critical issues in this emerging law which can be addressed with the help of decisions and orders of numerous states.
The document discusses various notices issued by the GST department for non-compliance and how they can be handled. It mentions notices for differences in GSTR 1 and 2A, ITC claims, default in returns, and anti-profiteering issues. It advises that notices can be challenged on technical or jurisdictional grounds or by requesting more time. The document also discusses the need for businesses to have proper tax governance and ERP systems to avoid issues with the tax authorities. It provides guidance on handling summons and show cause notices issued under GST.
Complications of GST for Real-Estate and Developerssandesh mundra
This presentation contains the categories of units available with the developer as on the appointed day and the controversy attached with each category of unit. The presentation precisely covers all the controversies that could come up for the given category of unit.
An attempt to summarize the crucial aspects of maintaining records under GST is made. Apart from this, the presentation includes all types of audits proposed under GST regime. The system of return filling that the Group of Ministers are finalising together with GSTN officials and stakeholders is also included in the presentation. It also includes issues that may arise during filling of annual return and reconciliation statement.
An attempt to compile relevance of contractual clauses, technique of claiming back lost exemptions through doctrine of promissory estoppel, effect of repeals and omission and related judgments, is made. An overview of legal aspects for ongoing contracts is included.
Issues faced by Realtors and works contractorssandesh mundra
We have listed down several issues faced by Real estate and construction sector. A long list of issues are included separately for builders and works contractor for transition and post GST period.
Presentation contains cases and judgements delivered by courts pre-GST regime. A brief summary of all caselaws is made and an attempt is made to provide a bird's eye view of litigations arising in GST.
Presentation is prepared with the object of simplifying the interpretation issues and providing guidelines to read the rate schedules. Methods and mechanism of claiming tax free exports is also explained.
Goods and Service Tax in India is one of the biggest tax reform in Indirect Tax Regime. It is a destination bases tax levied on supply of Goods and Services. It includes impact of GST on several sectors. It also includes development of GST by way of notifications, circulars, press releases and other other compliances under GST.
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?
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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.
Budgeting as a Control Tool in Government Accounting in Nigeria
Being a Paper Presented at the Nigerian Maritime Administration and Safety Agency (NIMASA) Budget Office Staff at Sojourner Hotel, GRA, Ikeja Lagos on Saturday 8th June, 2024.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
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In World Expo 2010 Shanghai – the most visited Expo in the World History
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China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
Explore the world of investments with an in-depth comparison of the stock market and real estate. Understand their fundamentals, risks, returns, and diversification strategies to make informed financial decisions that align with your goals.
1. Lets begin our Story titled CA Sandesh Mundra, sandeshmundra@gmail.com
2. Our Hero – MrKarkar has just got an assignment from M/s Change the World Ltd This is his first big break after facing very very stiff competition from MrChintan and Mr Manish. He is very happy to accept the assignment. CA Sandesh Mundra, sandeshmundra@gmail.com
3. But since MrKarkar reached late at the client place, he was asked to give an explanation to which he replied:- Everything went wrong this morning, sir. My wife decided to drive me to the station. She changed her clothes in ten minutes, but then it was raining heavily, so I had to swim. Rather than let you down, I swam across the river -- look, my suit's still wet -- ran out to the near by airport, got a ride on a friend’s helicopter, landed on top of our building and then came by rope on our floor." “I believe everything," said the boss, obviously disappointed. “But no woman can change in ten minutes." CA Sandesh Mundra, sandeshmundra@gmail.com
4. But he finally gets to meet the CFO of the company Mr IASB who greets him and welcomes him to the campus. CA Sandesh Mundra, sandeshmundra@gmail.com
5. CFO Says – MrKarkar, our organisation shall complete its 10th year in a few days. We voluntary adopted IFRS last year, this is the second year of IFRS. This year we have ventured into certain new businesses for which you need to guide us regarding selection of accounting policies. Please tell us which standard do we need to look into for this. MrKarkar smiles and Nods..and says, Yes sir, Its my pleasure. CA Sandesh Mundra, sandeshmundra@gmail.com
6. Sir, we would be referring to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors for the basic guidelines :-As the name goes by the standard covers following areas:- - Selecting and applying accounting policies. - Accounting for changes in accounting policies as well as in accounting estimates. - Corrections in prior period errors. CA Sandesh Mundra, sandeshmundra@gmail.com
7. CFO – Ok, Great. See our organisation implemented IFRS a few years back but I am still not so conversant with IFRS. So whereever possible, please also highlight the differences as compared to Indian GAAP. In this case the corresponding Indian Standard is ??? CA Sandesh Mundra, sandeshmundra@gmail.com
8. MrKarkar – Sir Its AS-5. But sir, for that we would raise a separate bill.CFO – Oh, definitely, It’s a pleasure to pay for the real knowledge. CA Sandesh Mundra, sandeshmundra@gmail.com
9. Whenever we are selecting accounting policy, there are two options:- If IFRS exists we need to follow that IFRS CA Sandesh Mundra, sandeshmundra@gmail.com
10.
11. Guidance in standard and interpretations dealing with similar and related issues.
13. IAS 8 also permits management to consider the most recent pronouncements of other standard setting bodies that use a similar conceptual framework in making this judgement.Sir, this is precisely the FIRST differenceAs against this,AS 5 gives no guidance on selection of accounting policies. CA Sandesh Mundra, sandeshmundra@gmail.com
14. Further to this note SECOND difference on accounting policies:- Existing AS 5 restricts the definition of accounting policies to specific accounting principles and the methods of applying those principles while IAS 8 broadens the definition to include bases, conventions, rules and practices (in addition to principles) applied by an entity in the preparation and presentation of financial statements. CA Sandesh Mundra, sandeshmundra@gmail.com
15. CFO – You mean the accounting policy chosen should be - Relevent to decision making needs of the user - & ReliableMrKarkar – Absolutely Sir, Reliable just like me. You are now geared up to choose your accounting policies CA Sandesh Mundra, sandeshmundra@gmail.com
16. CFO – Well that’s ok but I am faced with a problem. This year we have implemented SAP which permits only weighted average formula for inventory valuation. Till date we were doing FIFO valuation. What do we do? CA Sandesh Mundra, sandeshmundra@gmail.com
17. Sir, there are two ways that the change in policy takes place CA Sandesh Mundra, sandeshmundra@gmail.com
18. Change as per IFRS Change has to be accounted for as per the transitional provisions of IFRS. IF there is no transitional provision in IFRS, then the change has to be accounted for retrospectively. This means that the opening balance of the retained earnings for the earliest period presented and other comparative amounts disclosed for each prior period presented shall be adjusted as if the new policy had always been in use CA Sandesh Mundra, sandeshmundra@gmail.com
19. So, sir that’s the THIRD difference In IFRS comparative information is restated and the amount of adjustment relating to prior periods is adjusted against the opening balance of the retained earnings of the earliest year presented. As against this in AS-5, Financial impact of the Change has to be disclosed in the year in which change is done and no restatement is required. CA Sandesh Mundra, sandeshmundra@gmail.com
20. CFO – Like in our case how would we disclose:- Change in accounting policy in this year w.r.t. valuation of inventories. The impact on inventory valuation was determined to be – At December 31, 2008 :an increase of Rs 10,000 At December 31, 2009 :an increase of Rs 15,000 At December 31, 2010 :an increase of Rs 20,000 CA Sandesh Mundra, sandeshmundra@gmail.com
21. Change……. The income statements prior to adjustments are – 20102009 Revenue 2,50,000 2,00,000 Cost of sales 1,00,000 80,000 Gross profit 1,50,000 1,20,000 Administration costs 60,000 50,000 Selling & distribution costs 25,000 15,000 Net profit 65,000 55,000 Retained earnings as on January 1, 2009 amounted to Rs 3,00,000. So how are we going to Present the change in accounting policy in the Income Statement and the Statement of changes in Equity in accordance with requirements of IAS – 8. CA Sandesh Mundra, sandeshmundra@gmail.com
22. The solution for change…… M/s Change the World Ltd INCOME STATEMENT For the year ended December 31, 2010 CA Sandesh Mundra, sandeshmundra@gmail.com
23. M/s Change the World Ltd STATEMENT OF CHANGES IN EQUITY For the year ended December 31, 2010 CA Sandesh Mundra, sandeshmundra@gmail.com
24. CFO - But what if its not practicable to identify the exact period to which the change pertains?MrKarkar - Where it is not practicable to determine either the specific effect in a particular period or the cumulative effect of applying a new policy to past periods, the new policy should be applied from the earliest date that it is practicable to do so. CA Sandesh Mundra, sandeshmundra@gmail.com
25. During 2010, X Co. has changed its accounting policy for depreciatingP&M, so as to apply useful life method on the basis of the number of production orsimilar units expected to be obtained from the use of the asset CA Sandesh Mundra, sandeshmundra@gmail.com
26.
27. Voluntary Change in policies.. Possible :- If it results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity’s financial position, financial performance or cash flows. CA Sandesh Mundra, sandeshmundra@gmail.com
28. FOURTH difference In addition to the situations allowed under IAS 8 for change in accounting policy, existing AS 5 allows the situation where change in accounting policy is required by statute. But that has not been perceived by IAS 8 to be a situation requiring change. CA Sandesh Mundra, sandeshmundra@gmail.com
29. CFO - But, we would be adopting some IFRS on “Agriculture” for the Bio division where we have massive sales of Rs. 150 Lacs this year. Last year we had sales of only Rs. 2 Lacs so we did not adopt the standard. Would that be a change in accounting policy? CA Sandesh Mundra, sandeshmundra@gmail.com
30. Mr Karkar – Sir, the following are not changes in accounting policies: (a) the application of an accounting policy for transactions that differ in substance from those previously occurring; and (b) the application of a new accounting policy for transactions, that did not occur previously or were immaterial. CA Sandesh Mundra, sandeshmundra@gmail.com
31. CFO – What are the disclosure norms…. CA Sandesh Mundra, sandeshmundra@gmail.com
32. DISCLOSURES FOR CHANGES IN ACCOUNTING POLICIES The title of IFRS. Details of transitional provisions, if any. The nature of change in policy. If retrospective application is impracticable- The circumstances that led to existence of that condition, and Description of how and from when the change in policy has been applied. The amounts of adjustments relating to periods before those presented, to the extent practicable. For the current period and each prior period presented, the amount of adjustment – For each financial statement line item affected, and If IAS-33 “Earning Per Share” applies to the entity, for basic and diluted EPS. CA Sandesh Mundra, sandeshmundra@gmail.com
33. Sir, Check out the FIFTH difference Disclosure requirements given in IAS 8 are more detailed as compared to the disclosure requirements given in the existing AS 5. Para 32 of AS – 5 says, Any change in an accounting policy which has a material effect Either in present or if expected in future should be disclosed. The impact of, and the adjustments resulting from, such change, if material, should be shown in the financial statements of the period in which such change is made, to reflect the effect of such change. Where the effect of such change is not ascertainable, wholly or in part, the fact should be indicated. CA Sandesh Mundra, sandeshmundra@gmail.com
34. And the SIXTH one.. As regards disclosures are concerned IAS 8 requires disclosure of impact of a future change in accounting policy when an entity is yet to implement a new standard or Interpretation that has been issued but has not come into effect. As against this:- Under AS-5 there is no such specific requirement. CA Sandesh Mundra, sandeshmundra@gmail.com
35. Sir, now the next issue is a very critical…. CA Sandesh Mundra, sandeshmundra@gmail.com
36. Changes in accounting estimates Many items in financial statements cannot be measured with accuracy and hence estimated – e.g. bad debts, inventory obsolescence, useful lives of property, plant & equipments, fair value of financial assets/liabilities, warranty obligations etc. A change in estimate does not warrant restating the financial statements of prior period since it is not a correction of an error. A change in the measurement basis applied is a change in an accounting policy, and not a change in an accounting estimate. CA Sandesh Mundra, sandeshmundra@gmail.com
37. CFO says – We were planning to change our method of depreciation from WDV to SLM. As per AS-5, we are required to compute the depreciation retrospectively, what about IFRS? CA Sandesh Mundra, sandeshmundra@gmail.com
38. Sir, this is exactly the SEVENTH difference Change in Method of depreciation under IFRS is a change in accounting estimate, hence the effect is only to be given prospectively CA Sandesh Mundra, sandeshmundra@gmail.com
39. SOME ISSUES FOR YOU TO DECIDE WHETHER THE CHANGE IS IN ESTIMATE OR IN ACCOUNTING POLICY? CA Sandesh Mundra, sandeshmundra@gmail.com
40. CFO – So if we have missed to pass an accounting entry in a particular year, Will that be a change in accounting policy or a change in accounting estimate? CA Sandesh Mundra, sandeshmundra@gmail.com
41. MrKarkar –Sir, that’s defined as a Prior Period error. To explain more lets see the definition in IAS 8 Prior period errors Omissions from, and misstatements in, the entity’s financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that: Was available when financial statements for those periods were authorized for issue; and Could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements. CA Sandesh Mundra, sandeshmundra@gmail.com
42. Definition of prior period items is much broader under IAS8 as compared to AS – 5 which covers only items of income and expenses under the definition of prior period items. It does not include balance sheet misclassification which do not have an income statement impact. So, Sir Lets see the EIGTH difference CA Sandesh Mundra, sandeshmundra@gmail.com
43. Further to that….. IAS 8 specifically states that errors include frauds, which is not covered in existing AS 5 CA Sandesh Mundra, sandeshmundra@gmail.com
44. A prior period error shall be corrected by retrospective restatement except to the extent that it is impracticable to determine either the period-specific effects or the cumulative effect of the error. CA Sandesh Mundra, sandeshmundra@gmail.com
45. LIMITATION ON RETROSPECTIVE RESTATEMENT Limitation on cumulative effect When it is impracticable to determine the cumulative effect, at the beginning of the current period, of an error on all prior periods, the entity shall restate the comparative information to correct the error prospectively form the earliest date practicable. Limitation on period specific effect When it is impracticable to determine the period specific effects of an error on comparative information for one or more prior periods presented, the entity shall restate the opening balances of assets, liabilities and equity for the earliest period for which retrospective restatement is practicable (which may be the current period). CA Sandesh Mundra, sandeshmundra@gmail.com
46. So, Sir this is the NINTH difference Prior period errors have to be corrected with the retrospective impact under IAS8 if it is measurable. As against AS – 5 Which does not require restatement of comparatives but only disclosure in the current period. CA Sandesh Mundra, sandeshmundra@gmail.com
47. TENTH difference – Extra-ordinary Items (Not Included) Keeping in view with IAS 1, Presentation of Financial Statements, which prohibits the presentation of any items of income or expense as extraordinary items and deals with Profit or loss for the period, IAS 8 does not deal with the same unlike existing AS 5 which defines “Extraordinary items are income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise and, therefore, are not expected to recur frequently or regularly”. CA Sandesh Mundra, sandeshmundra@gmail.com
48. CFO – MrKarkar, one final question, - Although as an Indian company we have adopted IFRS, I never recollect that we have restated our comparatives. Last year at the time of finalisation we had discovered a prior period error, but it was accounted for in P/L for the year instead of hitting the comparatives. Why is it so? CA Sandesh Mundra, sandeshmundra@gmail.com
49. Conflicting Legal and Regulatory Issues Some of the situations or accounting treatments prescribed in IAS8 may not be in conformity with the present requirements of applicable laws / regulations in India. In such cases, the provisions of the applicable laws/regulations will prevail. Conflicting Issues with Companies Act, 1956 The standard requires application of change in accounting policy with retrospective effect. As per Circular: No.1/2003 dated 13.1.2003 issued by ROC, a company could reopen and revise its accounts even after their adoption in the annual general meeting in order to comply with technical requirements of laws to achieve t he object of exhibiting true and fair view. It implies that the Companies Act does not permit revision and reopening of accounts for such purposes,. Moreover, such financial statements would not deem to be in agreement with books of Accounts, a requirement under Section 227(3) (c), a fact which the auditor has to certify. CA Sandesh Mundra, sandeshmundra@gmail.com
50. CAN YOU GUESS WHO HE IS??? CA Sandesh Mundra, sandeshmundra@gmail.com
51. CAN YOU GUESS WHO HE IS? CA Sandesh Mundra, sandeshmundra@gmail.com