Central Government amends Companies (Indian Accounting Standards) Amendment Rules, 2020 - (24 Jul 2020)
Company
The Central Government, in consultation with the National Financial Reporting Authority amends the Companies (Indian Accounting Standards) Rules, 2015, amid the coronavirus pandemic. The Indian Accounting Standards (Ind AS), as notified under Section 133 of the Companies Act 2013, have been formulated keeping in view, the Indian economic and legal environment. The decision is in wake of protecting the public interest and the interests of investors, creditors and others associated with the Companies by establishing high quality standards of accounting and auditing.
The Ind-AS 103 is related to business combinations. As per the amendment, an entity shall determine whether a transaction or other event is a business combination by applying the definition in this Ind AS, which requires that, the assets acquired and liabilities assumed constitute a business. If the assets acquired are not a business, the reporting entity shall account for the transaction or other event as an asset acquisition. Ind-AS 116 standard is related to principles for presentation, recognition and disclosure of leases. Due to COVID-19, many lessors have extended rent concessions to lessees. The amendment to Ind-AS 116 will provide significant relief to lessees for accounting for rent concessions from lessors specifically arising from the COVID-19 pandemic.
The National Financial Reporting Authority (NFRA) was constituted on 01st October, 2018 by the Government of India under Sub Section (1) of section 132 of the Companies Act, 2013. The duty of the NFRA is to recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government and to monitor and enforce compliance with accounting standards and auditing standards. The amendments are to be applied by lessees for annual reporting periods beginning on or after April 1, 2020.
Tags : ACCOUNTING STANDARDS AMENDMENT RULES
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