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OVERVIEWOFACCOUNTINGSTANDARDSCA. PRAMOD JAINFCA, ACS, ACMA, DISA, MIMALUNAWAT & CO.Chartered Accountants
Lunawat & Co.APPLICABILITY Section211(3C) of the Companies Act Notificationof Companies (AccountingStandards) Rules,2006 as per Notification dt.07.12.2006 prescribing Accounting Standardsfor the Companies. Thedifferences between AS issued by ICAI &AS notified by Govt. are of minor nature,which have been harmonized by the Institutein line with Govt. Notification ( Announcementin Feb,08 issue of CA Journal)
Lunawat & Co.Entities that areto follow ds)Rules, 2006TaxAccountingStandardsInd ASAS issuedby ICAITaxAccountingStandards
Lunawat & Co.HARMONIZATION OF DIFFERENCESNature of Differences Minor Language,presentationdifferences, ParaNumbers, etc. Preface vs. GeneralInstructions Amended by ICAI, in2008 Preface being retained.However, the same isrevised to include theconcept of ‘SMCs’ asnotified by the Govt.
Lunawat & Co.HARMONIZATION OF DIFFERENCES ASIs Instead of Level II &Level III entitiesConcept of SMCsIntroduced. Withdrawn andincorporated inAccounting Standardsin line with Govt.Notification. For non-corporateassessee’s Level II &Level III classificationcontinue.
Lunawat & Co.APPLICABILITY- DIFFERENT ENTITIES As Per ICAILevel I Equity or Debt listed or in As Per Govt.the process of listingNotification Banks (including Co-opBanks), FinancialInstitution, Insurance Co’s Turnover in theimmediately preceding year exceeds 50 Crore inimmediate PY. Borrowing including publicdeposits in the immediatelypreceding yr. exceeds 10Crore. Holding or Subsidiary ofany of above entity.Non SMCs(except co-opbank)
Lunawat & Co.APPLICABILITY- DIFFERENT ENTITIES Level II Turnover 1 Cr to 50Cr.(w.e.f. 1.4.2012) Borrowing 1Crore –10Crore. Holding or subsidiary ofaboveLevel III Not covered by Level I orLevel II SMCs SMCs
Lunawat & Co.APPLICABILITY - CONTD Governmentnotified Accounting Standards areapplicable only to companies covered byCompanies Act,1956. Forother than companies, criteria prescribedby ICAI shall continue. The same includesproprietorship firms, Partnership Firms,Trusts, Societies, LLP or any other entities. Futureprocess of issuing Accounting Standardsby ICAI. Timelag in notification of AccountingStandards.
Lunawat & Co.SMC DISCLOSURE “The Company is a Small and MediumSized Company (SMC) as defined in theGeneral Instructions in respect ofAccounting Standards notified underthe Companies Act, 1956. Accordingly,the Company has complied with theAccounting Standards as applicable toa Small and Medium Sized Company.”Two year wait period if change from NonSMC to SMC
Lunawat & Co.SME DISCLOSURE “The Entity is a Small and MediumSized Enterprise (SME) as per theannouncement made by ICAI and hascomplied with the AccountingStandards insofar as they areapplicable to entities falling in Level IIor Level III, as the case may be.”Two year wait period if change from Level Ito II or II to III
Lunawat & Co.MAJOR EFFECT OF GOVERNMENT NOTIFICATIONREGARDING APPLICABILITY ON COMPANIES AS3, AS 17, AS 21, AS 23, AS 25 & AS 27not applicable to SMCs. AS18, AS 20 & AS 24 become applicable toall companies including SMCs. Relaxationto SMCs regarding certain paras(primarily relating to disclosure).The same are almost in line with those notapplicable to Level II and Level IIIenterprises as per ICAI notification.
Lunawat & Co.AS- CLASSIFICATION Disclosure Recognition &MeasurementCapital or RevenueExpenses/ Incomerelating to whichyear- Principle ofprudence appliedSpecific FinancialInstruments AS 3, 17, 18, 20, 21, 23,24, 27 AS 2, 6 & 10, 12, 13, 16,26, 28 AS 4, 5, 9, 11, 15, 22, 29 AS 7, 14, 19, 25 AS 30, 31, 32
Lunawat & Co.AS APPLICABILITYASNo.Short TitleCorporate EntitiesNon- Corporate EntitiesNonSMCSMCLevel ILevel IILevel IIIAS-1Accounting PoliciesYYYYYAS-2InventoriesYYYYYAS-3Cash FlowYNYNNAS-4Events after Balance Sheet dateYYYYYAS-5Prior Period Items & YYYYYAS-9RevenueYYYYYAS-10Fixed AssetsYYYYYAS-11Foreign ExchangeYYYYYAS-12Government YYYYYAS-15Employee BenefitsYPartlyYPartlyPartly
Lunawat & Co.AS APPLICABILITYAS-16Borrowing CostYYYYYAS-17SegmentYNYNNAS-18Related ing Per ShareYPartlyYPartlyPartlyAS-21ConsolidationY (listed)NY (listed)NNAS-22Deferred TaxesYYYYYAS-23Consolidated StatementsY (listed)NY (listed)NNAS-24Discontinuing OperationYYYYNAS-25Interim ReportingY (listed)N**Y (listed)N**N**AS-26Intangible AssetsYYYYYAS-27Interest in Joint VenturesY (listed)NY ContingencyYPartlyYPartlyPartly30, 31, 32Financial InstrumentsN***N***************
Lunawat & Co.GUIDANCE NOTES ISSUED BY ASB Guidance Note on Accounting for RealEstate Transactions (Revised 2012). Guidance Note on Accounting for Selfgenerated Certified EmissionReductions (CERs) (Issued 2012) Guidance Note on Accounting for RateRegulated Activities
Lunawat & Co.DOCUMENTATION Worknot documented is worknot done. Havea checklist, tell articlesto cross verify Seniors Taketo cross verifynecessary certificates /representation frommanagement
Lunawat & Co.CONVERGENCE WITH IFRS IndianAccounting Standards to beconverged with IFRS -Target date01.04.2015. (ICAI recommendation) Ind-AS notified (35 Standards) Amendment required in different laws. Major Bottleneck – Ministry of Finance Conceptual differences e.g. Fair value concept. Preference share capital– Equity orborrowings Separate Accounting Standard for SMEs
THANK YOUCA. Pramod JainLUNAWAT & CO.pramodjain@lunawat.com 91 9811073867
Government notified Accounting Standards are applicable only to companies covered by Companies Act,1956. For other than companies, criteria prescribed by ICAI shall continue. The same includes Lunawat & Co. proprietorship firms, Partnership Firms, Trusts, Societies, LLP or any other entities. Future process of issuing Accounting Standards by ICAI.
