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ROAD MAP TO IND-AS &
SIGNIFICANT DIFFERENCES
SIRCChennai
23rd April, 2016
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CONTENTS
• Road Map for Implementation
• Transition to Ind-AS
•
Other Key Differentiators• Implications
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ROAD MAP OR IMP!EMENTATION-
OT"ER T"AN INANCIA! ENTITIES
#ol$ntary Phase%
• Any company may
voluntarily applyInd-AS in respect of
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ROAD MAP OR
IMP!EMENTATION- OT"ER T"ANINANCIA! ENTITIESSecond Phase• Ind-AS is mandatory for the following classes
of companies in respect of their financialstatements for accounting periods
commencing on or after &st April' ()&3+
•
ompanies whose e!uity and " or de#tsecurities are listed or are in the process of
ein. listed on any Stoc$ %&change in India
which are not co0ered in phase &'
•
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ROAD MAP OR
IMP!EMENTATION- INANCIA!ENTITIESirst Phase• Ind-AS is mandatory for the following classes
of companies in respect of their financialstatements for accounting periods
commencing on or after &st April' ()&4+
•
All scheduled commercial #an$s +other than.r#an o-/perative 0an$s and egional ural
0an$s
•
All India Term ending efinancing Institutions6
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ROAD MAP OR
IMP!EMENTATION- INANCIA!ENTITIESSecond Phase• Ind-AS is mandatory for the following classes
of companies in respect of their financialstatements for accounting periods
commencing on or after &st April' ()&5+
•
isted 0s not covered in the first phase'• All unlisted 0s having net worth of s' 25
crore or more #ut less than s' 55 crore'
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ROAD MAP OR IMP!EMENTATION
Certain 6eneral Considerations%
• ompanies whose securities are listed
on the S8% %&change will not #ecovered unless they go for a voluntary
adoption'
• All companies adopting Ind-AS are
re!uired to present comparative
information for one year' 9
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ROAD MAP OR IMP!EMENTATION
• The net worth would #e determined on the
#asis of the standalone financial statements as
on 31st 8arch 2514 in accordance with the
definition of net worth as per Section (1*32 of
the Act' or companies which are
incorporated su#se!uently the net worth
would #e on the #asis of the first auditedstandalone financial statements and would
apply to su#se!uent financial years once they
meet the applica#ility threshold'
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Transition to Ind-AS
• Preparation of Ind-AS Openin. 7alance Sheet
• Mandatory E:emptions
•
#ol$ntary E:emptions• Other Key Considerations
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Preparation of Ind-AS Openin. 7alance
Sheet
• Not to reco.nise items as assets and
liailities if Ind-AS does not permit their
reco.nition+
• Reco.nise all assets and liailities /hose
reco.nition is re9$ired y Ind-AS+
•
Reclassify assets' liailities' and items ofe9$ity as per Ind-AS re9$irements+
• Meas$re all assets and liailities in
accordance /ith Ind-AS+ 11
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Preparation of Ind-AS Openin. 7alance
Sheet
Not to reco.nise items as assets and
liailities if Ind-AS does not permit their
reco.nition% 1e:amples2
• Ind-AS-&) Events after the Reporting Period
does not recognise proposed di0idends as
an ad*usting event and hence the same isnot presented as a lia#ility as is the case
with AS-4' The proposed dividend is to #e
disclosed as a note' 12
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Preparation of Ind-AS Openin. 7alance
Sheet
• The carried forward #alance of any share iss$e e:penses
which are amortised in terms of the special dispensation
under AS-26 are eliminated whilst preparing the opening
#alance sheet' (The treatment to be adopted if already
adjusted against Securities premium Account is not clear).
• Any contin.ent assets or reim$rsements which are not
virtually certain and do not meet the recognition criteria
under Ind-AS-;3 should #e reversed in the opening #alance
sheet'
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Preparation of Ind-AS Openin. 7alance
Sheet
• In the opening consolidated financial
statements) assets and lia#ilities of
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Preparation of Ind-AS Openin. 7alance
Sheet
Reco.nise all assets and liailities /hose
reco.nition is re9$ired y Ind-AS% 1e:amples2
•
All deri0ati0e financial assets and liailities and emedded deri0ati0es shall #e
recognised if not done earlier'
•
ertain provisions in the nature ofrestructuring o#ligations) onerous contracts)
decommissioning lia#ilities) site restoration)
warranties) litigation etc' need to #e
reco nised #ased on constr$cti0e oli ations)1
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Preparation of Ind-AS Openin. 7alance
Sheet
•
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Preparation of Ind-AS Openin. 7alance
Sheet
• Deferred ta: assets and liailities may need
to #e recognised #ased on the 7alance sheet
approach'
• In the consolidated financial statements
investments in
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Preparation of Ind-AS Openin. 7alance
Sheet
Reclassify assets' liailities' and items of e9$ity
as per Ind-As re9$irements% 1E:amples2
•
lassification of financial lia#ilities and e!uityshould #e #ased on the s$stance rather than
legal form e'g' redeema#le preference shares)
fully converti#le de#entures) perpetual de#t
etc'
• Compo$nd financial instr$ments need to #e
split into de#t and e!uity components e'g'
artl " o tionall converti#le #onds'19
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Preparation of Ind-AS Openin. 7alance
Sheet
• =here the time value of money is material)
the pro0ision should #e on a disco$nted #asis'
•
Share ased payment transactions need to #erecognised on a fair 0al$e #asis'
• Assets and lia#ilities ac!uired in a $siness
comination to #e measured at fair 0al$e'• Non-c$rrent assets held for sale and
Discontin$ed Operations to #e measured at
fair value less costs to sell' 21
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Mandatory E:emptions
Dereco.nition of inancial Assets and !iailities
• o need to recognise any financial asset or
lia#ility which is already derocognised underlocal >AA;'
• Alternatively) the entity may apply
derecognition criteria retrospectively #ychoosing a cut off date'
"ed.e Acco$ntin.
•
Transactions entered into #efore the date of22
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Mandatory E:emptions
Classification and Meas$rement of inancial
Assets and !iailities
•
?etermination of cash flows for time valuemeasurement of financial assets on the date
of transition when it is impractica#le to assess
the same retrospectively) with ade!uate
disclosures till their de recognition'
• or measurement of e&isting financial assets
and lia#ilities on the date of transition if it is
im ractica#le to determine effective interest23
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Mandatory E:emptions
Impairment of inancial Assets
• %&haustive search for information when
determining whether there is a significantincrease in the credit ris$ since initial
recognition'
Emedded Deri0ati0es• A first time adopter shall assess whether an
em#edded derivative is re!uired to #e
separated from the host contract on the #asis24
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#ol$ntary E:emptions
Share ased Payment Transactions
•
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#ol$ntary E:emptions
Deemed Cost of In0estment Property
• These may #e identified on the date of
transition #ased on Ind-AS criteria of these#eing used to earn rentals or for capital
appreciation as against the AS-13 criteria of it
not #eing intended to #e used or occupied
su#stantially in the operations of the
enterprise'
!eases
•
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#ol$ntary E:emptions
C$m$lati0e Translation Differences
• umulative translation differences for all
foreign operations +Ind-AS does notdistinguish #etween integral and non-integral
operations, on the date of translation shall #e
@ero and
• >ains and losses on su#se!uent disposal of
foreign operations shall e&clude translation
differences prior to the date of transition'
•
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#ol$ntary E:emptions
In0estments in s$sidiaries' associates and AA; +i'e' fair value in the
separate financial statements on date of transition or previous
>AA; carrying amount, on the date of transition can #e used'Assets and !iailities of s$sidiaries' associates and
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#ol$ntary E:emptions
Desi.nation of pre0io$sly reco.nised inancial
Instr$ments
•
inancial assets are re!uired to #e classifiedinto three types) as under:
1. Fair value through Profit and oss (helps to
eliminate or significantly reducemeasurement or recognition uncertainty or
holding period is less than 12 months) – can
be used irrespective of the business model
discussed below 2
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#ol$ntary E:emptions
• inancial liailities are re!uired to #e
classified into three types) as under:
1
!air value through ;rofit and oss +veryselectively,
2' Amortised cost'
•.
The a#ove designations can #e either at initialrecognition or on the date of transition'
•. Amortised cost of financial assets and
lia#ilities shall #e determined on the #asis of35
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#ol$ntary E:emptions
air #al$emeas$reme
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#ol$ntary E:emptions
Decommissionin. !iailities incl$ded in Cost of
fi:ed assets
•
8easure the lia#ility on the date of transitionas per Ind-AS 37'
• To the e&tent it is to #e included in the cost of
the asset) the amount should #e estimated#ased on the assumption that it would #e
included when the lia#ility first arose and then
discounted accordingly) using historical ris$
ad usted discount rates #ased on avera e32
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Other Key Considerations in Transition
Ind-AS-( In0entories
• In respect of inventories ac!uired on deferred
settlement #asis) the interest element thereonshall #e e&cluded' This need to #e ad*usted on
the date of transition'
•
Sale of inventories after the reporting periodwould #e an ad*usting event under Ind-AS 15
discussed later which would need to #e
ad*usted on the date of transition'34
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Other Key Considerations in Transition
Ind-AS&) E0ents After Reportin. Period
• Any provision for proposed dividend and
related dividend distri#ution ta& after thereporting period shall #e reversed and added
#ac$ to retained earnings'
•
Settlement of a court case after reportingperiod confirms the e&istence of a present
o#ligation and accordingly the previously
created provision needs to #e ad*usted or
fresh rovision need to #e created in terms of3
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Other Key Considerations in Transition
Ind-AS (; on 7orro/in. Costs
• Inventories which are manufactured or
otherwise produced in large !uantities on a
repetitive #asis are not considered as
!ualifying assets even if they ta$e a su#stantial
period of time to get ready for their intended
use or sale'
• 0orrowing costs shall #e measured applying
effecti0e interest rate method from the
transition date' Accordin l ) ancillar37
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Other Key Considerations in Transition
Ind-AS &( Income Ta:es
• 0alance Sheet method to #e adopted for
computation of deferred ta& asset or lia#ility
#y which the ta& #ase is compared with
accounting #ase' ;rimary impact would #e in
respect of #usiness com#inations and
consolidation ad*ustments'
• Ta* base of an asset is the amount deductible
for ta" purposes against any ta"able economic
bene its that would low to the entit when it39
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Other Key Considerations in Transition
Ind-AS ;4 Intan.ile Assets
• .namortised share issue e&penses need to #e
charged off' Amounts in the nature of
transaction cost need to #e reduced from
e!uity'
•
Any unamortised #orrowing costs need to #eanalysed' Initial transaction cost need to #e
reduced from the #orrowings and any
ancillary cost needs to #e considered in the
calculatin the effective interest rate'3
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Other Key Considerations in Transition
Ind-AS (& Effects of Chan.es in orei.n
E:chan.e Rates
• oncept of functional currency introduced for
the first time' o first time e&emption
provided' %t is the currency of the primary
economic environment in which the entity
operates %t is normally the currency which
influences the income and e"penses the most
e g shipping company
Ind-AS ;3 Pro0isions' Contin ent !iailities and45
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Other Key Differentiators
• Presentation of inancial Statements 1Ind-AS-
&2
• inancial Instr$ments
• 7$siness Cominations
• Consolidated 6ro$p Acco$nts
• Income Ta:es
• Employee 7enefits Share ased payments
•
Property' Plant ? E9$ipment 41
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Presentation of inancial Statements
• O
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Components of inancial Statements
• Statement of chan.es in E9$ity for the period+
- %t is commonly understood as a statement which depicts the
movement in the various components of e&uity or what is
commonly referred to as shareholders funds
- The components of e&uity for the purpose of statement of
changes in e&uity would include for each class of contributed
e&uity# the accumulated balance of each class of 3ther
$omprehensive #ncome (i.e. the total non+o'ner change ine4uity during the period5 in other 'ords all changes in e4uity
other than transactions from o'ners and distributions to
o'ners) and %etained 6arnings.
+ Some of the major components of other comprehensive4
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Components of inancial Statements
• The Statement of $hanges in 64uity includes
the follo'ing information7
- he total comprehensive income for the
period showing separately the amount
attributable to owners and others
- !or each component of e&uity areconciliation of the movement between the
beginning and end of the period arising out of
profit or loss# other comprehensive income and
transactions with owners includin an46
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Components of inancial Statements
• Statement of Cash lo/ for the period - The
#asic o#*ective of preparing the cash flow
statement is to provide information to the
users regarding the cash inflows and outflows)which in con*unction with the traditional
financial statements prepared on an accrual
#asis would provide information in respect ofthe following matters) amongst others:
- The a#ility of the enterprise to generate
cash flow from operations' 47
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Principles 6o0ernin. Preparation of
inancial Statements
• Materiality and a..re.ation
• Offsettin.
> ,nly permissible to achieve substance over form
– aluation allowance# provision for
obsolescence etc not considered as offsetting
– %ndividual %nd-$*s need to be referred to
• re9$ency of reportin.5
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Contents of inancial Statements
• The following information should #e
prominently displayed and repeated as
deemed necessary) for a proper
understanding of the users:
- Name of the reporting entity and any
chan.e thereof from the preceding period'
- =hether financial statements are separate
or of the .ro$p
- ?ate of reporting and period covered1
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Contents of inancial Statements
• Presentation of 7alance sheet
- o specific format prescri#ed in the Ind-As
- The %&posure ?raft of the IAI suggestingthe format as per Schedule III of the ompanies
Act) 2513 would #e a useful guidance once
notified - The minim$m line items to #e presented as
per the ne&t slide
2
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Contents of inancial Statements
?escription of the Items
;roperty) plant and e!uipment
Investment ;roperty
Intangi#le Assets
inancial Assets showing the following separately:
Investments accounted under %!uity 8ethod
Trade and /ther eceiva#les ash and ash %!uivalents
0iological assets
Inventories
Total assets classified as held for sale and assets included in disposal groups considered as held for
sale
inancial ia#ilities showing the following separately:
Trade and other ;aya#les
;rovisions
ia#ilities and Assets for urrent Ta&?eferred Ta& Assets and ia#ilities
ia#ilities included in disposal groups considered as held for sale
on-controlling interests) presented within e!uity
Issued apital and eserves attri#uta#le to the owners of the ;arent
3
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Contents of inancial Statements
• Additional line and su#-line items can #e
presented #ased on assessment of the nature
and li4uidity of assets) function of assets and
amounts) nature and timing of lia#ilities'
• Assets 'ith the same class subject to
different measurement basis (cost 9 fair
value) should be presented in separate lineitems
• here are specific disclosure re&uirements
which are laid down in the %nd-$* or di erent4
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Contents of inancial Statements
urrent Assets on-urrent Assets /perating ycle
An asset shall #e classified ascurrent) when it satisfies any of
the following criteria:
a, It is e&pected to #e
realised or intended for
sale or consumption on
the companyBs normal
operating cycle'
#, It is held primarily for
the purpose of #eing
sold'
c, It is e&pected to #e
realised within 12
months of the
reporting date'
d, It represents cash and
cash e!uivalents unless
it is restricted from
#eing used or
e&changed within 12
months of the
reporting date'
All other assets are classified as
non-current assets'
A lia#ility shall #e classified ascurrent) when it satisfies any of
the following criteria:
a, It is e&pected to #e
settled within the
normal operating cycle'
#, It holds the lia#ility
primarily for the
purpose of trading'
c, The lia#ility is due to #e
settled within 12
months after the
reporting period'
d, The entity does not
have the unconditional
right to defer
settlement of the
lia#ility for at least 12
months after the
reporting date'
All other lia#iliites are classified
as non-current lia#ilities'
/ne of the critical factorsdetermining the current " non-
current classification is the
operating cycle followed #y the
company' It is defined as the
time period #etween the
ac!uisition of an asset for
processing and their realisation
in cash and cash e!uivalents'
=here the normal operating
cycle cannot #e identified) it is
assumed to have a duration of
12 months'
The following are certain
matters which are relevant in
the conte&t of the a#ove:
=here a company is
engaged in running
multiple #usinesses it
could have a different
operating cycle for each
line of #usiness'
In certain situations an
operating cycle longer
than 12 months is also
possi#le e'g' companies
engaged in
construction " real
estate development)
companies engaged in
manufacture of wines
etc'
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Contents of inancial Statements
• The follo'ing are certain matters 'hich are
relevant in the conte*t of the above7
+ ;here a company is engaged in running
multiple businesses it could have a different
operating cycle for each line of business.
+ #n certain situations an operating cycle
longer than 1! months is also possible e.g.
companies engaged in construction 8 real
estate development9 companies engaged in
manu acture o 'ines etc. 6
f l
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Contents of inancial Statements
• Presentation of Statement of Profit and !oss
- o specific format prescri#ed in the Ind-As
D It however prescri#es a single statement
approach 'ith a Profit and oss Account
follo'ed by a Statement of $omprehensive
#ncome 'hich is different from the alternatives
allo'ed by #AS+1
- The entity shall also present the profit and
loss as well as other comprehensive income
attri#uta#le to non-controllin interests and7
f i i l
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Contents of inancial Statements
?escription of the Items
evenue with Interest evenue calculated using %I to #e shownseparately
>ains and osses arising from derecognition of financial assets
measured at amortised cost
inance ost
Impairment osses on financial assets and reversal thereon
Share of profit and loss of associates and *oint ventures usinge!uity method of accounting
>ain or loss arising out of reclassification of financial assets out of
amortised cost category to fair value category
Ta& er&pense
Total of discontinued operations
9
C t t f i i l St t t
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Contents of inancial Statements
• Additional line) su#-line items) headings and
su#-headings which are relevant for an
understanding of the users should #e
provided'
• &o items should be classified as
e*traordinary items
• 6*penses should be presented by nature of
items as against #AS+1 'hich also permits
functional classification.
•
C f i i l S
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Contents of inancial Statements
• Components of Other Comprehensi0e
Income
- hanges in revaluation surplus
- e measurement of defined #enefit plans
- >ains and losses arising from translation of
financial statements of foreign operations
- >ains and losses arising from investments
in e4uity instruments designated as fair value
through other comprehensive income and from65
C f i i l S
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Contents of inancial Statements
• Components of Statement of Chan.es in
E9$ity
- Total comprehensive income for the period)
showing separately the amounts attri#uta#le to
the owners and to non-controlling interests'
- or each component of e!uity) the effects
of retrospective application or retrospective
restatement recognised as per Ind-AS 9'
- or each component of e!uity +comprising61
C t t f i i l St t t
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Contents of inancial Statements
• Disclos$re of Si.nificant Acco$ntin. Policies
- 8easurement #asis used'
- /ther accounting policies - Significant management *udgements
- Sources of estimation uncertainty +e'g'
litigation provisions #ased on cash flows)
decommissioning provision #ased on future
funding plan) actuarial assumption for pension
lia#ilities) #asis of determination of fair value62
C t t f i i l St t t
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Contents of inancial Statements
• Capital Disclos$res
- Eualitative information a#out the o#*ective
policies and processes for the entityBs capital
management and any changes thereon during
the year
- Summary of !uantitative data a#out the
components of capital e'g' su#ordinated de#t
- ompliance with e&ternal imposed capital
re!uirements li$e capital ade!uacy ratio)63
C t t f i i l St t t
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Contents of inancial Statements
• Other Miscellaneo$s Disclos$res
- ?ividend related disclosures
- ?omicile and legal from of the entity andaddress of its registered office
- ?escription of the nature of operations and
principal activities
- ame of the parent and ultimate parent
64
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O ll I t i i l R ti
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O0erall Impact on inancial Reportin.
• 7etter and more meanin.f$l presentation of
financial statements and other financial
information
> +urrent and non-current classification of
assets and liabilities facilitates better li&uidity
and cash flow analysis
– *tatement of comprehensive income
facilitates distinction of the impact on the
financial statements arising out of the core
o eratin activities and other activities events66
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inancial Instr$ments
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inancial Instr$ments
• Deri0ati0e Instr$ments > currently there are
diverse practices – $*-34 or %+$%
announcement- consistency would creep in
and recognition of both gains and losses eitherthrough Profit and 5oss or ,+% (hedge
accounting adopted) – /reater impact for
entities 'ho 'ere hitherto follo'ing the #$A#announcement and recognising only losses
• Transaction Costs
> %n res ect o lon term borro'in s will69
inancial Instr$ments
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inancial Instr$ments
Impact on the Or.anisation
• entral Treasury unctions would need to
review their operational processes and
controls'
• Sales personnel would need closer co-
ordination whilst negotiating contracts)
especially derivative contracts +including for
commodities,
•
egal personnel would need to ac!uire new6
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7$siness Cominations
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7$siness Cominations
• Si.nificant Impact on Post Ac9$isition Profits
> Recording of assets at fair value will
normally result in higher depreciation and
amortisation – %n case of intangibles with
indefinite useful life or with higher useful life
lower or no amortisation
– 7oodwill will not have to be amortised
but tested for impairment
– %n case of a business combination in71
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Consolidated 6ro$p Acco$nts
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Consolidated 6ro$p Acco$nts
Reco.nition and Meas$rement
• Preparation of Consolidated inancial
statements
> 5ot of additional *PEs would get
consolidated
– /econsolidation of certain subsidiariessince two companies cannot consolidate the
same subsidiary since control can be e"ercised
only by one entity73
Consolidated 6ro$p Acco$nts
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Consolidated 6ro$p Acco$nts
< +hanges in ownership interest that do not
result in loss of control should be ad0usted
against e&uity 6o guidance under current 7$$P
and hence differing practices were adopted
– 5osses incurred by the subsidiary to be
allocated between the controlling and non-
controlling interest as against the practice under%ndian 7$$P of ad0usting these against the
ma0ority# unless there is a binding obligation to
ma'e good the losses 74
Consolidated 6ro$p Acco$nts
8/17/2019 Ind AS Important
75/90
Consolidated 6ro$p Acco$nts
Impact on the Or.anisation
• >reater co-ordination with the 8anagement
of group companies) especially associates and
*oint ventures primarily due to changes in year
ends and adoption of uniform accounting
policies
• .pdation of group and organisational
structures which would also impact $ey ratios
and other performance indicators'
•
7
8/17/2019 Ind AS Important
76/90
8/17/2019 Ind AS Important
77/90
8/17/2019 Ind AS Important
78/90
Employee 7enefits and Share 7ased
8/17/2019 Ind AS Important
79/90
Employee 7enefits and Share 7ased
Payments
Impact on the Or.anisation
• >reater engagement with actuaries'
•
loser co-ordination with Senior8anagement) finance) ( and operations
personnel'
•
eview of compensation and ( policies andarrangements with vendors and other service
providers'
7
8/17/2019 Ind AS Important
80/90
Property Plant ? E9$ipment
8/17/2019 Ind AS Important
81/90
Property' Plant ? E9$ipment
• Re0al$ation of Assets
> 6o selective revaluation permitted
– 8pdation of revaluation on a regularbasis
– /epreciation charge to be charged off
to %ncome *tatement 6ven companies notadopting #nd+AS need to follo' the same in
terms of the $ompanies Act9 !>1"
– *ince it is an option it can affect91
Property Plant ? E9$ipment
8/17/2019 Ind AS Important
82/90
Property' Plant ? E9$ipment
• nrealised E:chan.e Differences
> hese are re&uired to be charged off in
all cases prospectively
- +ompanies who have opted for the
transitional relief for continuing treatment of
capitalisation in terms of para ?A of AS+11 till
the tenor of the loans or till != 2424 his would
impact comparability of results
– 7reater volatility in the results of92
Property Plant ? E9$ipment
8/17/2019 Ind AS Important
83/90
Property' Plant ? E9$ipment
Impact on the Or.anisation
• Identifying the relevant components would
re!uire reconfiguration of the fi&ed assets
register' The 8aintenance of the fi&ed assets
register would #ecome a cum#ersome
e&ercise since greater granularity would #e
re!uired in the compilation thereof'• Su#stantial system changes would have to #e
underta$en) the cost of which may not always
#e commensurate with the #enefits'93
Intan.ile Assets
8/17/2019 Ind AS Important
84/90
Intan.ile Assets
Reco.nition and Meas$rement
• Intangi#le assets can have indefinite useful
lives) identification of which should #e
ade!uately and appropriately demonstrated
and *ustified' Such assets need to #e su#*ected
to an annual impairment assessment
• air valuation is now permissi#le especially if
an active mar$et e&ists
94
Re0en$e Reco.nition
8/17/2019 Ind AS Important
85/90
Re0en$e Reco.nition
• ?efinition of FrevenueB given in the Ind AS 19 is
#road compared to the definition of FrevenueB
given in e&isting AS #ecause it covers all
economic #enefits that arise in the ordinarycourse of activities of an entity which result in
increases in e!uity) other than increases
relating to contri#utions from e!uityparticipants' /n the other hand) as per the
e&isting AS ) revenue is gross inflow of cash)
receiva#les or other consideration arising in9
Re0en$e Reco.nition
8/17/2019 Ind AS Important
86/90
Re0en$e Reco.nition
• Ind AS 19 specifically deals with the e&change
of goods and services with goods and services
of similar and dissimilar nature' In this regard
specific guidance is given regarding #artertransactions involving advertising services'
This aspect is not dealt with in the e&isting AS
'• Ind AS 19 provides guidance on application of
recognition criteria to the separately
identifia#le components of a single96
Re0en$e Reco.nition
8/17/2019 Ind AS Important
87/90
Re0en$e Reco.nition
• ?isclosure re!uirements given in the Ind AS 19
are more detailed as compared to e&isting AS
'
• Ind AS 19 specifically provides guidance
regarding revenue recognition in case the
entity is under any o#ligation to provide free
or discounted oods or services or awardcredits to its customers due to any customer
loyalty programme' %&isting AS does not
deal with this aspect' 97
Implications
8/17/2019 Ind AS Important
88/90
Implications
• Impact of transition on the profit" loss)
financial position and net worth of the entity D
preparation of Income and %!uity
econciliation• ommunication with the 0oard and " or Audit
ommittee
• Increased volatility in results
• Increased disclosure re!uirements D #oth
!uantitative and !ualitative D greater99
8/17/2019 Ind AS Important
89/90
Implications
8/17/2019 Ind AS Important
90/90
Implications
• Training considerations
• Impact on management reporting - change in
8IS" G;Is etc'
• hange in #usiness models
• oan covenants
• ?ividend distri#ution
• Investor relations