ind as vol 1 prelims (preface contents)

xi

Preface

Practical Approach to Ind AS Implementation

is that it contains proposed Ind AS 11, Construction Contracts and Ind AS 18, Revenue, which

are recently issued by MCA on proposed deferral of Ind AS 115, Revenue from Contracts with

Customers. The summary of proposed amendments to other Ind ASs, including those consequent

to proposed deferral of Ind AS 115 is another notable key highlight of this book.

xii

CA Sarika Gosain and CA Rajesh Gosain

xiii

Contents

Chapter 1: Convergence with IFRS in India ............................................................1-36

Chapter 2: Ind AS conversion- Are we ready? .......................................................37-42

Chapter 3: Ind AS 1: Presentation of Financial Statements ................................43-84

Chapter 4: Ind AS 2: Inventories ............................................................................85-106

Chapter 5: Ind AS 7: Statement of Cash Flows ..................................................107-128

Chapter 6: Ind AS 8: Accounting Policies, Changes in Accounting Estimates and Errors ...........................................................................129-150

Chapter 7: Ind AS 10: Events after the Reporting Period ...............................151-164

Chapter 8: Ind AS 11: Construction Contracts ...................................................165-184

Chapter 9: Ind AS 12: Income Taxes ....................................................................185-216

Chapter 10: Ind AS 16: Property, Plant and Equipment ..................................217-252

Chapter 11: Ind AS 17: Leases ...............................................................................253-286

Chapter 12: Ind AS 18: Revenue ...........................................................................287-314

.........................................................315-348

Chapter 14: Ind AS 20: Accounting for Government Grants and Disclosure of Government Assistance ..........................................349-364

Chapter 15: Ind AS 21: The Effects of Changes in Foreign Exchange Rates ...................................................................................365-386

Chapter 16: Ind AS 23: Borrowing Costs ............................................................387-400

Chapter 17: Ind AS 24: Related Party Disclosures ............................................401-418

Chapter 18: Ind AS 27: Separate Financial Statements ....................................419-422

Chapter 19: Ind AS 28: Investments in Associates and Joint Ventures ..............................................................................................423-442

Economies ...........................................................................................443-450

Chapter 21: Ind AS 32: Financial Instruments: Presentation ..........................451-476

Contents

xiv

Chapter 22: Ind AS 33: Earnings per Share ........................................................477-502

Chapter 23: Ind AS 34: Interim Financial Reporting ........................................503-520

Chapter 24: Ind AS 36: Impairment of Assets ....................................................521-548

Chapter 25: Ind AS 37: Provisions, Contingent Liabilities and Contingent Assets .............................................................................549-576

Chapter 26: Ind AS 38: Intangible Assets ...........................................................577-608

Chapter 27: Ind AS 40: Investment Property .....................................................609-622

Chapter 28: Ind AS 41: Agriculture ......................................................................623-632

Chapter 29: Ind AS 101: First-time Adoption of Indian Accounting Standards ......................................................................633-670

Chapter 30: Ind AS 102: Share-based Payment .................................................671-694

Chapter 31: Ind AS 103: Business Combinations ..............................................695-734

Chapter 32: Ind AS 104: Insurance Contracts .....................................................735-746

Chapter 33: Ind AS 105: Non-current Assets Held for Sale and Discontinued Operations .................................................................747-772

Chapter 34: Ind AS 106: Exploration for and Evaluation of Mineral Resources .............................................................................773-782

Chapter 35: Ind AS 107: Financial Instruments: Disclosures .........................783-798

Chapter 36: Ind AS 108: Operating Segments ...................................................799-822

Chapter 37: Ind AS 109: Financial Instruments .................................................823-870

Chapter 38: Ind AS 110: Consolidated Financial Statements .........................871-910

Chapter 39: Ind AS 111: Joint Arrangements .....................................................911-932

Chapter 40: Ind AS 112: Disclosure of Interests in Other Entities ................933-944

Chapter 41: Ind AS 113: Fair Value Measurement ............................................945-962

Chapter 42: Ind AS 114: Regulatory Deferral Accounts ..................................963-980

Chapter 43: Income Tax Disclosure Standards ..................................................981-995

xv

Detailed Contents

About the Author .......................................................................................................................................vii

Foreword ....................................................................................................................................................ix

Preface .......................................................................................................................................................xi

Chapter 1: Convergence with IFRS in India

Background .................................................................................................................................................1

Meaning of “Convergence” with IFRS .......................................................................................................2

‘Convergence’ versus ‘Adoption’ ...............................................................................................................3

Convergence strategy in India.....................................................................................................................3

History ...................................................................................................................................................3

.........................................................................................................4

Other regulatory changes through the journey ......................................................................................4

.................................................................................................................................5

.........................................................................................................5

Applicability thresholds ...................................................................................................................5

Ind AS implementation – The roadmap ...........................................................................................6

Applicability of Ind AS ....................................................................................................................8

Answer ...........................................................................................................................................11

.....................................................................................................................11

.......................................12

Voluntary Adoption ........................................................................................................................13

.....................................................................................................................14

Materiality concept.........................................................................................................................16

Overriding status of law .................................................................................................................16

IND AS vs. the Act 2013...........................................................................................................................16

List of IFRS/IAS currently applicable ......................................................................................................17

List of SIC/IFRIC currently applicable .....................................................................................................18

List of converged IND AS ........................................................................................................................19

xvi

.................................................................................................................21

List of converged IFRIC/SIC ....................................................................................................................21

...........................................................................................................23

Current Updates to Ind AS ........................................................................................................................23

Deferment of Ind AS 115 .....................................................................................................................23

Consequential amendments ............................................................................................................23

..........................................................................................................24

Chapter 2: Ind AS conversion- Are we ready?

Ind AS conversion process ........................................................................................................................38

Diagnostic review ................................................................................................................................38

Preliminary evaluation .........................................................................................................................38

Design and action plan ........................................................................................................................38

Implementation ....................................................................................................................................38

Review Assessment .............................................................................................................................39

Focus areas ................................................................................................................................................39

Financial reporting factors ...................................................................................................................39

Accounting Practices ......................................................................................................................39

Tax implications .............................................................................................................................39

Group policies ................................................................................................................................39

Industry peers .................................................................................................................................39

Management strategies ...................................................................................................................39

............................................................................................................39

Company personnel ........................................................................................................................39

Training needs ................................................................................................................................40

IT system ........................................................................................................................................40

Human resources system ................................................................................................................40

........................................................................................................40

Stakeholder expectations ................................................................................................................40

Learning from global peers .......................................................................................................................40

Concluding remarks ..................................................................................................................................41

Contents

xvii

Chapter 3: Ind AS 1: Presentation of Financial Statements

Objective ...................................................................................................................................................44

Scope .........................................................................................................................................................45

.................................................................................................................45

.........................................................................................................46

Presentation of True and Fair View and compliance with Ind AS ............................................................46

Departure from compliance with Ind AS ..................................................................................................47

Going concern ...........................................................................................................................................48

Accrual basis of accounting ......................................................................................................................49

Materiality and aggregation ......................................................................................................................50

Offsetting ..................................................................................................................................................50

Frequency of reporting ..............................................................................................................................52

Comparative information ..........................................................................................................................52

Consistency of presentation ......................................................................................................................52

..........................................................................................52

..................................................................................................53

Balance sheet ............................................................................................................................................54

Information to be presented either in the Balance Sheet or in the notes .............................................54

.................................................................................................................55

Current assets .......................................................................................................................................56

Current liabilities .................................................................................................................................56

.....................................................................................................................59

......................................59

...................................60

...............60

..................................................................................................................61

Other Comprehensive Income ..................................................................................................................61

Information to be presented in the other comprehensive income section ...........................................61

Other comprehensive income for the period .......................................................................................61

Statement of changes in equity .................................................................................................................62

Information to be presented in the statement of changes in equity .....................................................62

Contents

xviii

Information to be presented in the statement of changes in equity or in the notes ....................................63

............................................................................................................................63

Notes .........................................................................................................................................................63

Disclosures requirements ..........................................................................................................................65

Accounting policies .............................................................................................................................65

Judgments ............................................................................................................................................65

Requirements of other standards .........................................................................................................65

Assumptions and sources of estimation uncertainty ...........................................................................66

Capital ..................................................................................................................................................66

..............................................................................67

Other disclosures .................................................................................................................................67

Position under the Companies Act, 2013 ..................................................................................................67

.....................................68

Proposed Consequential Amendments on Deferral of Ind AS 115 issued by MCA .................................68

Recently Proposed other Amendments issued by MCA ...........................................................................69

...................................................................................................69

Comparison with IFRS/IAS ......................................................................................................................73

Comparison with AS and other GAAP Principles ....................................................................................76

Chapter 4: Ind AS 2: Inventories

Objective ...................................................................................................................................................85

Scope .........................................................................................................................................................86

Meaning of Inventories .............................................................................................................................86

Measurement of inventories ......................................................................................................................88

Cost of inventories ....................................................................................................................................88

Costs of purchase .................................................................................................................................89

Costs of conversion .............................................................................................................................90

Other costs ...........................................................................................................................................92

Techniques for the measurement of cost ...................................................................................................94

Cost Formulas ...........................................................................................................................................94

Net realisable value ...................................................................................................................................95

Recognition as an expense ........................................................................................................................99

Contents

xix

Disclosure .................................................................................................................................................99

Proposed Consequential Amendments on Deferral of Ind AS 115 issued by MCA ...............................101

Comparison with IFRS/IAS ....................................................................................................................102

Comparison with AS and other GAAP Principles ..................................................................................103

Chapter 5: Ind AS 7: Statement of Cash Flows

Objective .................................................................................................................................................108

Scope .......................................................................................................................................................108

...........................................................................................................108

Cash and cash equivalents ......................................................................................................................108

Components of cash and cash equivalents ........................................................................................110

...............................................................................................110

Operating activities ............................................................................................................................ 111

Investing activities .............................................................................................................................112

Financing activities ............................................................................................................................114

......................................................................................115

................................................................116

...................................................................................................116

..................................................................................................117

...................................................................................................................117

Interest and dividends .............................................................................................................................118

Taxes on income .....................................................................................................................................120

Investments in subsidiaries, associates and joint ventures ......................................................................120

Changes in ownership interests in subsidiaries and other businesses .....................................................121

.............................................................................................................................121

Other disclosures .....................................................................................................................................122



Chapter 6: Ind AS 8: Accounting Policies, Changes in Accounting Estimates and Errors

Objective .................................................................................................................................................129

Contents

xx

Scope .......................................................................................................................................................130

Accounting policies ................................................................................................................................130

Selection and application of accounting policies ..............................................................................130

Consistency of accounting policies ...................................................................................................131

Changes in accounting policies .........................................................................................................131

Applying changes in accounting policies ...............................................................................................133

Retrospective application ..................................................................................................................134

Limitations on retrospective application ...........................................................................................134

...............................................................................................136

Changes in accounting estimates ............................................................................................................137

..............................................................................................................139

Prior period errors ...................................................................................................................................139

Limitations on retrospective restatement ................................................................................................143

................................................................................................................143



Chapter 7: Ind AS 10: Events after the Reporting Period

Objective .................................................................................................................................................152

......................................................152

Scope .......................................................................................................................................................152

Process of approving the Financial Statements ......................................................................................152

Recognition and measurement ................................................................................................................153

Adjusting events after the reporting period .......................................................................................153

................................................................................155

Dividends ................................................................................................................................................156

Going concern .........................................................................................................................................157

Disclosure ...............................................................................................................................................157

Date of approval for issue ..................................................................................................................157

Updated disclosures ...........................................................................................................................158

................................................................................158

............................................................................................160

Contents

xxi

Applicability of guidance ..................................................................................................................160

Recognition of dividend payable .......................................................................................................161

Measurement of a dividend payable ..................................................................................................161

Accounting for settlement of dividend payable .................................................................................161

Presentation and disclosures ..............................................................................................................161



Chapter 8: Ind AS 11: Construction Contracts

Objective .................................................................................................................................................167

Scope .......................................................................................................................................................167

Construction Contract .............................................................................................................................167

Types of construction contracts .........................................................................................................168

Fixed price contract ......................................................................................................................168

Cost plus contract .........................................................................................................................168

Combining and segmenting construction contracts ................................................................................168

Segmenting construction contracts ....................................................................................................168

Combining construction contracts .....................................................................................................169

Additional asset .................................................................................................................................169

Contract revenue .....................................................................................................................................170

Measurement of contract revenue .....................................................................................................170

Variation ............................................................................................................................................170

Claim .................................................................................................................................................170

Incentive payments ............................................................................................................................171

Contract costs ..........................................................................................................................................171

....................................................................172

Costs that may be attributable to contract activity in general include: ..............................................172

......................................................................173

...................................................................................................................................173

Costs incurred on securing a contract ................................................................................................173

Recognition of contract revenue and expenses .......................................................................................173

Reliable estimates ..............................................................................................................................174

Determination of outcome of a construction contract .......................................................................174

Contents

xxii

..............................................................................................174

In the case of a cost plus contract .................................................................................................174

Outcome of contract not estimated reliably .......................................................................................174

Percentage of completion method .....................................................................................................174

Determination of stage of completion ...............................................................................................175

Recognition of assets .........................................................................................................................176

Contract costs that are not probable of being recovered ...................................................................176

Recognition of expected losses .........................................................................................................176

Changes in estimates .........................................................................................................................176

Disclosure ...............................................................................................................................................178

Service Concession Arrangements ..........................................................................................................179

Features of the service concessional agreement ................................................................................179

Treatment of the operator’s rights over the infrastructure .................................................................179

Recognition and measurement of arrangement consideration ...........................................................180

Construction or upgrade services ......................................................................................................180

Consideration given by the grantor to the operator ...........................................................................180

Financial Asset .............................................................................................................................180

Intangible Asset ............................................................................................................................181

Combination of Financial Asset and Intangible Asset .................................................................181

Operation services .............................................................................................................................182

................182

Borrowing costs incurred by the operator .........................................................................................182

Items provided to the operator by the grantor ...................................................................................182

Summary ............................................................................................................................................183

Disclosure ..........................................................................................................................................184



Chapter 9: Ind AS 12: Income Taxes

Objective .................................................................................................................................................186

Scope .......................................................................................................................................................186

Tax base ..................................................................................................................................................187

The tax base of an asset .....................................................................................................................187

Contents

xxiii

The tax base of liability .....................................................................................................................189

Tax base of items not recognized in balance sheet ............................................................................190

.......................................................................191

Recognition of current tax liabilities and current tax assets ...................................................................191

Recognition of deferred tax liabilities and deferred tax assets ...............................................................192

Taxable temporary differences ..........................................................................................................192

Deductible temporary differences .....................................................................................................194

Assets carried at fair value ......................................................................................................................195

Goodwill .................................................................................................................................................196

Initial recognition of an asset or liability ................................................................................................197

Goodwill .................................................................................................................................................198

Unused tax losses and unused tax credits ...............................................................................................198

Reassessment of unrecognised deferred tax assets .................................................................................199

Investments in subsidiaries, branches and associates and interests in joint arrangements .....................199

Measurement ...........................................................................................................................................200

Deferred tax assets and liabilities not to be discounted .....................................................................202

Recognition of current and deferred tax .................................................................................................202

.......................................................................................................202

..............................................................................................203

Deferred tax arising from business combinations ...................................................................................204

..............................................204

Presentation .............................................................................................................................................204

Offset .................................................................................................................................................204

Tax expense .......................................................................................................................................205

....................................................205

..........................................205

Disclosure ...............................................................................................................................................206




Contents

xxiv

Chapter 10: Ind AS 16: Property, Plant and Equipment

Objective .................................................................................................................................................218

Scope .......................................................................................................................................................219

Recognition .............................................................................................................................................220

Spare parts and servicing equipments etc. .........................................................................................220

Measurement unit ..............................................................................................................................220

Assets acquired for safety purposes ..................................................................................................220

Subsequent costs .....................................................................................................................................221

...................................................................................................................221

Replacement costs .............................................................................................................................221

Major inspection costs .......................................................................................................................223

Measurement at recognition ....................................................................................................................224

................................................................................................................................224

Cessation of recognition cost .............................................................................................................226

Incidental operations before or during construction or development ................................................226

...........................................................................................................228

Bearer plant .......................................................................................................................................228

Measurement of cost ...............................................................................................................................228

Separation of interest elements ..........................................................................................................228

Assets acquired in exchange ..............................................................................................................229

Commercial substance .................................................................................................................229

Measurement after recognition ...............................................................................................................230

Cost model .........................................................................................................................................230

Revaluation model .............................................................................................................................230

Componentization ...................................................................................................................................232

Depreciable amount and depreciation period .........................................................................................234

Determination of useful life ....................................................................................................................234

Depreciation method ...............................................................................................................................235

Impairment ..............................................................................................................................................236

Compensation for impairment ................................................................................................................236

Derecognition ..........................................................................................................................................236

Changes in existing decommissioning, restoration and similar liabilities ..............................................237

Contents

xxv

Accounting Principles .......................................................................................................................237

Stripping costs in the production phase of a surface mine ......................................................................238


Recognition of production stripping costs as an asset .................................................................238

Initial measurement of the stripping activity asset .......................................................................239

Subsequent measurement of the stripping activity asset ..............................................................239

Disclosure ...............................................................................................................................................239




Chapter 11: Ind AS 17: Leases

Objective .................................................................................................................................................254

Scope .......................................................................................................................................................254

............................................................................................................................255

Finance lease .....................................................................................................................................255

Operating Lease .................................................................................................................................255

.......................................................................255

Indicators of situations that individually or in combination could also lead to a

......................................................................................256

Combined leases of land and building ....................................................................................................258

...........................................................................................261

Finance leases ....................................................................................................................................261

Initial recognition .........................................................................................................................261

Subsequent measurement .............................................................................................................262

Disclosures ...................................................................................................................................265

Operating leases .................................................................................................................................266

Disclosures ...................................................................................................................................269

...........................................................................................269

Finance leases ....................................................................................................................................269

Initial recognition .........................................................................................................................269

Subsequent measurement .............................................................................................................270

Contents

xxvi

Disclsoure .....................................................................................................................................271

Operating leases .................................................................................................................................271

Depreciation policy ......................................................................................................................271

Disclosures ...................................................................................................................................272

Sale and leaseback transactions ..............................................................................................................272

................................................................272

Sale and leaseback transactions resulting in operating lease .............................................................273

Sale price is equal to fair value ....................................................................................................273

Sale price is less than fair value ...................................................................................................273

Sale price is more than fair value .................................................................................................273

................................................................................................................275

For lessor ...........................................................................................................................................275

For lessee ...........................................................................................................................................275

........................................275

Disclosure ..........................................................................................................................................276

Determining whether an Arrangement contains a Lease ........................................................................276

Determining whether an arrangement is, or contains, a lease ...........................................................277

..................................277

Arrangement conveys a right to use the asset ..............................................................................277

Assessing or reassessing whether an arrangement is, or contains, a lease ........................................278




Chapter 12: Ind AS 18: Revenue

Objective .................................................................................................................................................288

Scope .......................................................................................................................................................290

Measurement of revenue .........................................................................................................................291

Interest element in revenue ................................................................................................................291

.........................................................................................................................292

Goods and services of similar nature ...........................................................................................292

Goods and services of dissimilar nature.......................................................................................293

Contents

xxvii

..............................................................................................................293

Separating components ......................................................................................................................293

Aggregating components ...................................................................................................................294

Sale of goods ...........................................................................................................................................294

Conditions of revenue recognition ....................................................................................................294

.............................................................................................294

...........................................................................................295

...........................................................................296

Matching concept ..............................................................................................................................296

Rendering of services ..............................................................................................................................299

Recognition criteria ...........................................................................................................................299

.......................................................................................................299

Percentage of completion method .....................................................................................................300

Stage of completion ...........................................................................................................................300

............................................................................................................300

Outcome of the transaction ................................................................................................................300

Interest and Royalties ..............................................................................................................................303

Interest ...............................................................................................................................................303

Royalties ............................................................................................................................................303

...............................................................304

Manner of accounting ........................................................................................................................304

Customer Loyalty Programmes ..............................................................................................................304


Measuring the fair value of award credits .........................................................................................305

Transfers of Assets from Customers .......................................................................................................307


..................................................................................................308

How should the transferred item of property, plant and equipment be measured

..................................................................................................................308

.....................................................................................308

....................................309

Disclosure ...............................................................................................................................................311


Contents

xxviii


Objective .................................................................................................................................................316

Scope .......................................................................................................................................................316

.................................................................................................................317

Recognition and measurement ..........................................................................................................317

.................................................................................................317

.............................................................................................................317

.....................................................................................................319

Disclosure ..........................................................................................................................................320

.......................................................................................................................320

................................................................................................................320

Recognition and measurement .....................................................................................................321

Disclosure .....................................................................................................................................322

.........................................................................................................................322

Recognition and measurement .....................................................................................................322

Accounting for the constructive obligation ..................................................................................324

Balance Sheet ...............................................................................................................................324

..........................................324

Actuarial valuation method ..........................................................................................................324

.......................................................................................325

Actuarial assumptions ..................................................................................................................328

Actuarial assumptions: mortality .................................................................................................328

Actuarial assumptions: discount rate ...........................................................................................328

........................................................329

Past service cost ...........................................................................................................................329

Gains and losses on settlement .....................................................................................................330

Recognition and measurement: plan assets .......................................................................................330

Fair value of plan assets ...............................................................................................................330

Reimbursements ...........................................................................................................................331

.............................................................................................331

.................................................................331

Contents

xxix

.........................................................332

Presentation .......................................................................................................................................334

Offset ............................................................................................................................................334

.............................................................................................334

Disclosure ..........................................................................................................................................334

..........................................................................335

........................................................................................................................335

................................336

State plans ..........................................................................................................................................337

..................................................................................................................................337

.........................................................................................................337


Disclosure ..........................................................................................................................................338

................................................................................................................................338

Recognition ........................................................................................................................................338

Measurement .....................................................................................................................................338

Disclosure ..........................................................................................................................................339

Interaction ...............................................................................................................................................339

Availability of a refund or reduction in future contributions .............................................................339

The right to a refund .....................................................................................................................340

.........................................................................................340

........................................................340

reduction in future contributions .......................................................................................................341

When a minimum funding requirement may give rise to a liability ..................................................341

Recently Proposed Amendments issued by MCA ..................................................................................341

Comparison with AS and other GAAP Principles .............................................................................343

Chapter 14: Ind AS 20: Accounting for Government Grants and Disclosure of Government Assistance

Scope .......................................................................................................................................................349

Ind AS 20 does not deal with: ............................................................................................................350

Contents

xxx

Government grants ..................................................................................................................................350

Types of grants...................................................................................................................................350

Recognition of government grants ....................................................................................................350

..........................................................................................................354

Presentation of grants related to assets ...................................................................................................354

Presentation of grants related to income .................................................................................................355

Repayment of government grants ...........................................................................................................355

Government assistance ............................................................................................................................359

Disclosure ...............................................................................................................................................360



Chapter 15: Ind AS 21: The Effects of Changes in Foreign Exchange Rates

Objective .................................................................................................................................................366

Scope .......................................................................................................................................................366

Functional currency ................................................................................................................................366

Primary factors ..................................................................................................................................366

Secondory factors ..............................................................................................................................367

Additional factors ..............................................................................................................................367

Net investment in a foreign operation .....................................................................................................369

Monetary items .......................................................................................................................................369

................................................................................................................................369

Reporting foreign currency transactions in the functional currency .......................................................370

Initial recognition ..............................................................................................................................370

Reporting at the ends of subsequent reporting periods ...........................................................................370

Recognition of exchange differences ......................................................................................................371

..........................................................................................................................372

Monetary items ..................................................................................................................................373

Change in functional currency ................................................................................................................373

Use of a presentation currency other than the functional currency ........................................................373

Translation to the presentation currency............................................................................................373

Contents

xxxi

Translation of a foreign operation ...........................................................................................................376

Disposal or partial disposal of a foreign operation .................................................................................377

Tax effects of all exchange differences ...................................................................................................379

Disclosure ...............................................................................................................................................379



Chapter 16: Ind AS 23: Borrowing Costs

Scope .......................................................................................................................................................387

Borrowing Cost .......................................................................................................................................388

Qualifying Assets ....................................................................................................................................389

Recognition .............................................................................................................................................390

Borrowing costs eligible for capitaliSation .............................................................................................390

...................................394

Commencement of capitaliSation ...........................................................................................................394

Suspension of capitaliSation ...................................................................................................................395

Cessation of capitaliSation ......................................................................................................................395

Disclosure ...............................................................................................................................................396




Chapter 17: Ind AS 24: Related Party Disclosures

Objective .................................................................................................................................................401

Scope .......................................................................................................................................................401

Disclosures ..............................................................................................................................................405

....................................................................................................................408



Contents

xxxii

Chapter 18: Ind AS 27: Separate Financial Statements

Objective .................................................................................................................................................419

Scope .......................................................................................................................................................419

...........................................................................................420

Disclosure ...............................................................................................................................................421



Chapter 19: Ind AS 28: Investments in Associates and Joint Ventures

Objective .................................................................................................................................................423

Scope .......................................................................................................................................................424

................................................................................................................................424

...................................................................................................................425

.........................................................................................................................................425

Application of the equity method and its procedure ...............................................................................426

......................................................426

Accounting treatment of goodwill, bargain purchases and losses with respect

to associates .......................................................................................................................................427

........................................................................................431

..................................................................................................................432

Discontinuing the use of the equity method ...........................................................................................432

Changes in ownership interest ................................................................................................................433

Impairment losses ...................................................................................................................................433




Economies

Scope .......................................................................................................................................................444

..................................................................................................444

.........................................................................................................444

Contents

xxxiii

Balance sheet .....................................................................................................................................444

...............................................................................................................446

Gain or loss on net monetary position ...............................................................................................446

............................................................................................................446

Balance sheet .....................................................................................................................................446

...............................................................................................................446

Gain or loss on net monetary position ...............................................................................................447

Taxes ..................................................................................................................................................447

.....................................................................................................................447

.......................................................................................................................447

.....................................................................................................447

Selection and use of the general price index .....................................................................................447

.......................................................................................447

Applying the Restatement Approach under Ind AS 29 ...........................................................................448

Disclosures ..............................................................................................................................................448


There is no equivalent standard under Indian GAAP, as compared to Ind AS 29. .................................449

Chapter 21: Ind AS 32: Financial Instruments: Presentation

Objective .................................................................................................................................................452

Scope .......................................................................................................................................................456

........................................................................................................457

Puttable instruments ................................................................................................................................458

Instruments, or components of instruments, that impose on the entity an obligation

to deliver to another party a pro rata share of the net assets of the entity only

on liquidation .....................................................................................................................................459

an obligation to deliver to another party a pro rata share of the net assets of the entity

only on liquidation .............................................................................................................................460

Settlement in the entity’s own equity instruments ..................................................................................460

Contingent settlement provisions ............................................................................................................461

Settlement options ...................................................................................................................................462

............................................................................................................464

Contents

xxxiv

Treasury shares .......................................................................................................................................469

Interest, dividends, losses and gains .......................................................................................................470

................................................................................470

.............................................................................................................471

......................................................................................471




Chapter 22: Ind AS 33: Earnings per Share

Objective .................................................................................................................................................478

Scope .......................................................................................................................................................478

Measurement ...........................................................................................................................................479

Basic earnings per share ....................................................................................................................479

.............................................................................................................................................479

Shares ................................................................................................................................................481

Partly paid shares ...............................................................................................................................482

Diluted earnings per share ......................................................................................................................485

.............................................................................................................................................485

Shares ................................................................................................................................................485

Dilutive potential ordinary shares ...........................................................................................................486

Options, warrants and their equivalents ............................................................................................486

Convertible instruments .....................................................................................................................488

Contingently issuable shares .............................................................................................................489

Contracts that may be settled in ordinary shares or cash ...................................................................490

Purchased options ..............................................................................................................................491

Written put options ............................................................................................................................491

Retrospective adjustments ......................................................................................................................493

Rights issues............................................................................................................................................494

.............................................................495

Presentation .............................................................................................................................................496

Disclosure ...............................................................................................................................................496

Contents

xxxv



Chapter 23: Ind AS 34: Interim Financial Reporting

Objective .................................................................................................................................................504

Scope .......................................................................................................................................................504

.....................................................................................................504

.............................................................................504

...................................................................................505

.........................................................................................................505

Other Disclosures ....................................................................................................................................506

Disclosure of compliance with Ind AS ...................................................................................................508

.........................................509

Materiality ...............................................................................................................................................510

...............................................................................................510


Same accounting policies as annual ..................................................................................................510

Revenues received seasonally, cyclically, or occasionally .....................................................................512

..................................................................................512

Use of estimates ......................................................................................................................................512

Restatement of previously reported interim periods ...............................................................................512

Impairment assessment for Goodwill .....................................................................................................512


Recently Proposed other Amendments issued by MCA .........................................................................514



Chapter 24: Ind AS 36: Impairment of Assets

Objective .................................................................................................................................................522

Scope .......................................................................................................................................................522

Identifying an asset that may be impaired ..............................................................................................523

...........................................................................................................................................523

Contents

xxxvi

Indication of potential for impairment ....................................................................................................524

........................................................................................................524

Internal sources of information .........................................................................................................524

Dividend from a subsidiary, joint venture or associate .....................................................................524

Measuring recoverable amount ...............................................................................................................525

...................525

Fair value less costs of disposal .........................................................................................................526

Value in use ........................................................................................................................................526

............................................................................................526

.......................................................................................529

....................................................................................529

...................................................................................................530

Discount rate ...........................................................................................................................................530

Recognising and measuring an impairment loss .....................................................................................530

........................................................................................................530

.............................................................530

.....................................................532

Goodwill .................................................................................................................................................534

....................................................................................534

............................................................536

Timing of impairment tests ................................................................................................................536

Corporate assets ......................................................................................................................................537

.............................................................................................538

Reversing an impairment loss .................................................................................................................541

........................................................................................................541

Internal sources of information .........................................................................................................541

Reversing an impairment loss for an individual asset ............................................................................542

.......................................................................543

Reversing an impairment loss for goodwill ............................................................................................544

Disclosure ...............................................................................................................................................544



Contents

xxxvii


Chapter 25: Ind AS 37: Provisions, Contingent Liabilities and Contingent Assets

Objective .................................................................................................................................................550

Scope .......................................................................................................................................................550

Provisions and other liabilities ................................................................................................................551

Difference between provision and contingent liability ......................................................................552

Recognition .............................................................................................................................................553

Provisions ..........................................................................................................................................553

Present obligation ....................................................................................................................................553

Past event ................................................................................................................................................554

................................................................557

Reliable estimate of the obligation .........................................................................................................557

Contingent liabilities ...............................................................................................................................557

Contingent assets ....................................................................................................................................557

Measurement ...........................................................................................................................................558

Best estimate ......................................................................................................................................558

Risks and uncertainties ......................................................................................................................560

Present value ......................................................................................................................................560

Future events .....................................................................................................................................561

...............................................................................................................561

Reimbursements ......................................................................................................................................562

Changes in provisions .............................................................................................................................562

Use of provisions ....................................................................................................................................563

Application of the recognition and measurement rules ..........................................................................563

Future operating losses ......................................................................................................................563

Onerous contracts ..............................................................................................................................563

Restructuring .....................................................................................................................................564

A constructive obligation to restructure arises only when an entity: ...........................................564

Rehabilitation Funds ...............................................................................................................................566

Contents

xxxviii

Accounting for an interest in a fund ..................................................................................................567

Accounting for obligations to make additional contributions ...........................................................567

— Waste electrical and

electronic equipment ...............................................................................................................................568


Levies ......................................................................................................................................................569


Disclosure ...............................................................................................................................................570




Chapter 26: Ind AS 38: Intangible Assets

Objective .................................................................................................................................................578

Scope .......................................................................................................................................................578

Intangible assets ......................................................................................................................................580

.....................................................................................................................................580

Control ...............................................................................................................................................580

...................................................................................................................581


Separate acquisition ................................................................................................................................583

Acquisition as part of a business combination ........................................................................................584

Recognition of Intangible asset acquired in a business combination ................................................584

....................585

Acquisition by way of a government grant .............................................................................................585

.................................................................................................................................585

Commercial substance .......................................................................................................................586

Internally generated goodwill .................................................................................................................587

Internally generated intangible assets .....................................................................................................587

Research phase ..................................................................................................................................587

Development phase ...........................................................................................................................587

Cost of an internally generated intangible asset ................................................................................589

Contents

xxxix

Recognition of an expense ......................................................................................................................590

Past expenses not to be recognised as an asset ..................................................................................591


Cost model .........................................................................................................................................591

Revaluation model .............................................................................................................................591

Useful life ................................................................................................................................................593

.................................................................................................594

Amortisation period and amortisation method ..................................................................................594

Residual value ...................................................................................................................................595

Review of amortisation period and amortisation method ..................................................................596

..........................................................................................596

Review of useful life assessment .......................................................................................................596

..................................................................597

Retirements and disposals .......................................................................................................................597

Website cost as intangible asset ..............................................................................................................597


Disclosure ...............................................................................................................................................598

General ..............................................................................................................................................598




Chapter 27: Ind AS 40: Investment Property

Objective .................................................................................................................................................609

Scope .......................................................................................................................................................610

.....................................610

..................................................................................611

............................................................................611

....................................................................611

Recognition .............................................................................................................................................612

Measurement at recognition ....................................................................................................................612

Initial measurement ...........................................................................................................................612

Contents

xl


Accounting policy .............................................................................................................................613

Fair value measurement .....................................................................................................................613

Inability to measure fair value reliably ..............................................................................................614

...............................................................................................614

Transfers ..................................................................................................................................................614

Disposals .................................................................................................................................................615

Disclosure ...............................................................................................................................................616

Additional disclosures .......................................................................................................................616




Chapter 28: Ind AS 41: Agriculture

Objective .................................................................................................................................................623

Scope .......................................................................................................................................................623

Recognition .............................................................................................................................................625

Measurement ...........................................................................................................................................625

Gains and losses ......................................................................................................................................626

Inability to measure Fair Value reliably ..................................................................................................627

Government grants ..................................................................................................................................628

Disclosure ...............................................................................................................................................629

General ..............................................................................................................................................629

measured reliably ...............................................................................................................................629

Disclosure related to Government grants ..........................................................................................630



Chapter 29: Ind AS 101: First-time Adoption of Indian Accounting Standards

Objective .................................................................................................................................................635

Scope .......................................................................................................................................................635

Contents

xli

Opening Ind AS balance sheet ................................................................................................................636

Long Term Foreign Currency Monetary Items ..................................................................................636

Financial assets or intangible assets accounted for in accordance with Appendix C,

Service Concession Arrangements to Ind AS 115 .............................................................................636

Accounting policies ................................................................................................................................637

comply with Ind AS ................................................................................................................................638

Mandatory exceptions .............................................................................................................................638

............................................................................................................................................638

.................................................................639

Hedge accounting ..............................................................................................................................640

...................................................................................................................640

...........................................................................641

...........................................................................................................641

.......................................................................................................................642

Government loans ..............................................................................................................................642

Voluntary exemptions .............................................................................................................................642

Business combinations ......................................................................................................................643

.....................................................................................................648

Insurance contracts ............................................................................................................................649

Deemed cost ......................................................................................................................................649

Leases ................................................................................................................................................653

Cumulative translation differences ....................................................................................................653

Long Term Foreign Currency Monetary Items ..................................................................................653

Investments in subsidiaries, joint ventures and associates ................................................................655

Assets and liabilities of subsidiaries, associates and joint ventures ..................................................655

.......................................................................................................656

.............................................................656

...................656

Decommissioning liabilities included in the cost of property, plant and equipment .........................657

Financial assets or intangible assets accounted for in accordance with Appendix C,

Service Concession Arrangements to Ind AS 115 .............................................................................657

...............................................................658

Contents

xlii

.........................................................................................................................658

..........................658

and liabilities .....................................................................................................................................659

.....................................................660

Stripping costs in the production phase of a surface mine ................................................................660

.............................................................660

Revenue from contracts with customers ............................................................................................660

...........................................................661

Presentation and disclosure .....................................................................................................................661

Comparative information ...................................................................................................................661

......................................................661

.................................................................................................662

Reconciliations ..................................................................................................................................662

.......................................................................663

Use of fair value as deemed cost .......................................................................................................664

Use of deemed cost for investments in subsidiaries, joint ventures and associates ..........................664

Use of deemed cost for oil and gas assets .........................................................................................664

Use of deemed cost for operations subject to rate regulation ............................................................664

.................................................................................664

....................................................................................................................664



Comparison with IFRS/ IAS ...................................................................................................................668


Chapter 30: Ind AS 102: Share-based Payment

Objective .................................................................................................................................................672

Scope .......................................................................................................................................................672

Recognition .............................................................................................................................................673

...................................................................................674

Overview ...........................................................................................................................................674

Transactions in which services are received ......................................................................................675

Contents

xliii

Transactions measured by reference to the fair value of the equity instruments granted .......................677

Determining the fair value of equity instruments granted .................................................................677

Treatment of vesting conditions ........................................................................................................678

.................................................................................................678

Treatment of a reload feature .............................................................................................................679

After vesting date ..............................................................................................................................679

If the fair value of the equity instruments cannot be estimated reliably............................................679

including cancellations and settlements ..................................................................................................679

......................................................................................681

......................................................................683

counterparty with a choice of settlement ...........................................................................................683

entity with a choice of settlement ......................................................................................................684

.......................................................................685

..........................685

..............................686

A parent grants rights to its equity instruments to the employees of its subsidiary .....................686

A subsidiary grants rights to equity instruments of its parent to its employees ...........................688

........................689

Transfer of employees between group entities ..................................................................................689

Disclosures ..............................................................................................................................................690



Chapter 31: Ind AS 103: Business Combinations

Objective .................................................................................................................................................696

Scope .......................................................................................................................................................697

...........................................................................................................................698

Identifying a business combination ........................................................................................................700

The acquisition method ...........................................................................................................................701

Identifying the acquirer .....................................................................................................................701

Contents

xliv

Determining the acquisition date .......................................................................................................703

...............................................................................704

Recognition principle ...................................................................................................................704

a business combination ................................................................................................................704

Measurement principle .................................................................................................................705

.........................................................................................706

.................................................706

....................................................................................707

Recognising and measuring goodwill or a gain from a bargain purchase .........................................707

Goodwill .......................................................................................................................................707

Bargain purchases ........................................................................................................................708

Consideration transferred ..................................................................................................................710

Contingent consideration ...................................................................................................................711

A business combination achieved in stages ............................................................................................712

A business combination achieved without the transfer of consideration ................................................713

Measurement period ................................................................................................................................714

Determining what is part of the business combination transaction ........................................................715

...................................................................................................................716

Subsequent measurement and accounting ..............................................................................................717

Reacquired rights ...............................................................................................................................717

Contingent liabilities .........................................................................................................................717

.......................................................................................................................718

Contingent consideration ...................................................................................................................718

Reverse acquisitions ................................................................................................................................718

Measuring the consideration transferred ...........................................................................................719

...................................................719

.....................................................................................................................720

.............................................................................................................................720

Business combinations of entities under common control .....................................................................721

Common control business combinations ...........................................................................................721

Method of accounting for common control business combinations ..................................................721

Contents

xlv

Disclosure ...............................................................................................................................................723

Business combination after the balance sheet date ............................................................................723



Comparison with as and other GAAP Principles ....................................................................................726

Chapter 32: Ind AS 104: Insurance Contracts

Objective .................................................................................................................................................736

Scope .......................................................................................................................................................736

.............................................................................................................................737

Unbundling of deposit components ........................................................................................................738


Temporary exemption from some other Ind ASs ...............................................................................738

Liability adequacy test .......................................................................................................................739

Impairment of reinsurance assets ............................................................................................................740

Changes in accounting policies ...............................................................................................................740

Current market interest rates ...................................................................................................................740

Continuation of existing practices ..........................................................................................................740

Prudence ..................................................................................................................................................741

Future investment margins ......................................................................................................................741

Shadow accounting .................................................................................................................................741

Insurance contracts acquired in a business combination or portfolio transfer ........................................741

Discretionary participation features ........................................................................................................742

Insurance contracts ............................................................................................................................742

Financial instruments .........................................................................................................................742

Disclosure ...............................................................................................................................................743

...................................................................................................743

Nature and extent of risks arising from insurance contracts .............................................................743




Contents

xlvi

Chapter 33: Ind AS 105: Non-current Assets Held for Sale and Discontinued Operations

Objective .................................................................................................................................................747

Scope .......................................................................................................................................................748

held for distribution to owners ................................................................................................................749

.....................................................................................751

..............................752

..................................................................752

Recognition of impairment losses and reversals ...............................................................................755

Changes to a plan of sale ...................................................................................................................757

Presentation and disclosure .....................................................................................................................760

Presenting discontinued operations ...................................................................................................760

Gains or losses relating to continuing operations ..............................................................................761

..............................761




Chapter 34: Ind AS 106: Exploration for and Evaluation of Mineral Resources

Objective .................................................................................................................................................773

Scope .......................................................................................................................................................774

................................................................................774

Temporary exemption from Ind AS 8 ................................................................................................774

..............................................................................775

Measurement at recognition ..............................................................................................................775

......................................................................775

Subsequent measurement ........................................................................................................................775


Presentation .............................................................................................................................................776

...........................................................................776

.......................................................................776

Contents

xlvii

Impairment ..............................................................................................................................................776


Specifying the level at which exploration and evaluation assets are assessed for

impairment .........................................................................................................................................777

Disclosure ...............................................................................................................................................777



Chapter 35:Ind AS 107: Financial Instruments: Disclosures

Objective .................................................................................................................................................784

Scope .......................................................................................................................................................784

Disclosure requirements ..........................................................................................................................785

...................................................................785

Balance sheet .....................................................................................................................................785

........................................786

Investments in equity instruments designated at fair value through other

comprehensive income ......................................................................................................................787

..................................................................................................................................787

............................................................................788

Collateral ...........................................................................................................................................788

Allowance account for credit losses ..................................................................................................788

............................................789

Defaults and breaches ........................................................................................................................789

...............................................................................................................789

Other disclosures .....................................................................................................................................790

Accounting policies ...........................................................................................................................790

Hedge accounting ..............................................................................................................................790

Fair value ...........................................................................................................................................791

...........................................................791

Qualitative disclosures .......................................................................................................................791

Quantitative disclosures .....................................................................................................................791

Credit risk .....................................................................................................................................792

Liquidity risk ................................................................................................................................792

Contents

xlviii

Market risk ...................................................................................................................................792

...............................................................................................................793

........................................793

.............................................793

Supplementary information ...............................................................................................................794





Chapter 36: Ind AS 108: Operating Segments

Core principle ..........................................................................................................................................799

Scope .......................................................................................................................................................800

Operating segments .................................................................................................................................801

Reportable segments ...............................................................................................................................805

Aggregation criteria ................................................................................................................................805

Quantitative thresholds ...........................................................................................................................806

Measurement ...........................................................................................................................................810

Restatement of previously reported information ....................................................................................811

Disclosure ...............................................................................................................................................811

General information ...........................................................................................................................812

............................................................................812

Reconciliations of the totals of segment revenues ............................................................................812

...........................................................................................................................813

Information about products and services ...........................................................................................813

Information about geographical areas ...............................................................................................813

Information about major customers ...................................................................................................814



Chapter 37: Ind AS 109: Financial Instruments

Objective .................................................................................................................................................825

Contents

xlix

Scope .......................................................................................................................................................825

Recognition and derecognition ...............................................................................................................827

Initial recognition ..............................................................................................................................827

.......................................................................................................827

.................................................................................................830

.............................................................................................................830

Amortised cost ...................................................................................................................................830

Fair value through other comprehensive income ..............................................................................831

........................................................................................831

...........................................831

..........................................................833

principal amount outstanding .......................................................................................................834

........................................................................................................838

Financial liabilities measured at amortised cost ................................................................................838

......................................840

Measurement ...........................................................................................................................................840

Initial measurement ...........................................................................................................................840

.....................................................................................841

...............................................................................841

Amortised cost measurement ..................................................................................................................841

...................................................................................................................841

............................................................................................................................................842

Impairment ..............................................................................................................................................842

Recognition of expected credit losses ...............................................................................................842

..................................................................844

Trade receivables, contract assets and lease receivables ...................................................................844

...................................................................................................................846

Measurement of expected credit losses .............................................................................................846

................................................................................846

.......................................................................................................................................847

Financial assets ..................................................................................................................................847

Financial Liabilities ...........................................................................................................................848

Contents

l

......................................................................848

.....................................................................848

Dividends ...........................................................................................................................................849

...............................................849

.........................................849

Investments in equity instruments .....................................................................................................849

..............................................................849

Assets measured at fair value through other comprehensive income ................................................850

.......................................................................................................850

Derivative ................................................................................................................................................851

Measurement of derivative ................................................................................................................851

.............................................................................................................................853

.......................................................................................854

Other hybrid contracts .......................................................................................................................854

Hedge accounting ....................................................................................................................................854

Hedging instruments ..........................................................................................................................855

Qualifying instruments .................................................................................................................855

Hedged items .....................................................................................................................................855

Qualifying items ...........................................................................................................................855

Qualifying criteria for hedge accounting ...........................................................................................856

Accounting for qualifying hedging relationships ..............................................................................857

Fair value hedges..........................................................................................................................858

..........................................................................................................................858

Hedges of a net investment in a foreign operation .......................................................................861

Hedges of a group of items .....................................................................................................................861

.............................................................................861

.........................861

............................861

Hedge of a net investment in a foreign operation ...................................................................................862

Nature of the hedged risk and amount of the hedged item for which a

hedging relationship may be designated ............................................................................................862

Where the hedging instrument can be held .......................................................................................862

Contents

li

Disposal of a hedged foreign operation .............................................................................................863

.............................................................863




Chapter 38: Ind AS 110: Consolidated Financial Statements

Objective .................................................................................................................................................872

Meeting the objective ........................................................................................................................872

Scope .......................................................................................................................................................872

Control ....................................................................................................................................................873

Purpose and design of an investee ..........................................................................................................876

Power ......................................................................................................................................................877

Voting rights ......................................................................................................................................878

Power with a majority of the voting rights...................................................................................878

Majority of the voting rights but no power ..................................................................................879

Power without a majority of the voting rights .............................................................................879

Contractual arrangement with other vote holders ........................................................................879

Rights from other contractual arrangements ................................................................................879

The investor’s voting rights .........................................................................................................880

Substantive rights ..............................................................................................................................882

Protective rights .................................................................................................................................884

Returns ....................................................................................................................................................885

Link between power and returns .............................................................................................................885

Relationship with Other Parties ...................................................................................................890

......................................................................................................................891

Continuous assessment ...........................................................................................................................892

Accounting requirements ........................................................................................................................892

Consolidation procedures ..................................................................................................................893

Uniform accounting policies .............................................................................................................893

Measurement .....................................................................................................................................893

Potential voting rights ........................................................................................................................893

Contents

lii

Reporting date ...................................................................................................................................894

........................................................................................................................894

Loss of control ........................................................................................................................................895

Determining whether an entity is an investment entity ..........................................................................896

Investment entities: exception to consolidation ......................................................................................897

Accounting for a change in investment entity status ..............................................................................898




Chapter 39: Ind AS 111: Joint Arrangements

Objective .................................................................................................................................................912


Scope .......................................................................................................................................................912

Joint arrangements ..................................................................................................................................912

Joint control .......................................................................................................................................912

Assessing joint control ......................................................................................................................913

Types of joint arrangement .....................................................................................................................914

......................................................................................................915

Structure of the joint arrangement ..........................................................................................................915

Joint arrangements not structured through a separate vehicle ...........................................................915

Joint arrangements structured through a separate vehicle .................................................................915

The legal form of the separate vehicle ....................................................................................................917

Assessing the terms of the contractual arrangement ...............................................................................917

Assessing other facts and circumstances ................................................................................................920

Consolidated Financial statements of parties to a joint arrangement .....................................................922

Joint operations ..................................................................................................................................922

Joint ventures .....................................................................................................................................923

..............................................................923

Joint operations ..................................................................................................................................923

Joint ventures .....................................................................................................................................924

Accounting for sales or contributions of assets to a joint operation .......................................................924

Contents

liii

Accounting for purchases of assets from a joint operation .....................................................................925



Chapter 40: Ind AS 112: Disclosure of Interests in Other Entities

Objective .................................................................................................................................................934


Scope .......................................................................................................................................................934

................................................................................................935

Investment entity status .....................................................................................................................935

Interests in subsidiaries ...........................................................................................................................936

..........................................................................................................................................936

..........................................................................................................936

................................................................................937

Nature of the risks associated with an entity’s interests in consolidated structured

entities ................................................................................................................................................938

Consequences of changes in a parent’s ownership interest in a subsidiary that do

not result in a loss of control .............................................................................................................938

Consequences of losing control of a subsidiary during the reporting period ....................................938

Interests in unconsolidated subsidiaries (investment entities) ................................................................938

Interests in joint arrangements and associates ........................................................................................939

and associates ....................................................................................................................................939

Aggregation .............................................................................................................................................940

Risks associated with an entity’s interests in joint ventures and associates ...........................................940

Interests in unconsolidated structured entities ........................................................................................941

Nature of interests ..............................................................................................................................941

Nature of risks ...................................................................................................................................941




Contents

liv

Chapter 41: Ind AS 113: Fair Value Measurement

Objective .................................................................................................................................................946

Scope .......................................................................................................................................................946

Measurement ...........................................................................................................................................947

......................................................................................................................947

The asset or liability ..........................................................................................................................947

Query ............................................................................................................................................947

Restriction on the sale of a debt instrument .................................................................................947

Answer .........................................................................................................................................947

The transaction ..................................................................................................................................947

Market participants ............................................................................................................................948

The price ............................................................................................................................................948

Query ............................................................................................................................................949

Determination of the most advantageous market .........................................................................949

Answer .........................................................................................................................................949

....................................................................................................949

...............................................................................949

...................................................................................950

Application to liabilities and an entity’s own equity instruments ...........................................................950

General principles ..............................................................................................................................950

Liabilities and equity instruments held by other parties as assets .....................................................951

Liabilities and equity instruments not held by other parties as assets ...............................................951

........................................................................................................................952

Restriction preventing the transfer of a liability or an entity’s own equity instrument .....................952

Financial liability with a demand feature ..........................................................................................952

market risks or counterparty credit risk .............................................................................................952

Fair value at initial recognition ..........................................................................................................952

Valuation techniques ..........................................................................................................................953

Market approach...........................................................................................................................953

Cost approach ...............................................................................................................................953

Income approach ..........................................................................................................................953

Inputs to valuation techniques ................................................................................................................954

Contents

lv

General principles ..............................................................................................................................954

Query ............................................................................................................................................954

Answer .........................................................................................................................................955

Inputs based on bid and ask prices ....................................................................................................955

Fair value hierarchy ...........................................................................................................................955

Level 1 inputs ...............................................................................................................................955

Query ............................................................................................................................................956

Debt obligation: Quoted price ......................................................................................................956

Answer .........................................................................................................................................956

Level 2 inputs ...............................................................................................................................956

Level 3 inputs ...............................................................................................................................957

Disclosure ...............................................................................................................................................957



Chapter 42: Ind AS 114: Regulatory Deferral Accounts

Objective .................................................................................................................................................964

Scope .......................................................................................................................................................965

..........................................................................................................................965

Temporary exemption from Ind AS 8 Accounting Policies, Changes in Accounting

...............................................................................................................................965


Continuation of existing accounting policies ..........................................................................................966

Applicability of other Standards .............................................................................................................967

....................................................................................967

Ind AS 12 Income Taxes ....................................................................................................................967

...........................................................................................................968

Ind AS 36 Impairment of Assets ........................................................................................................968

Ind AS 103 Business Combinations ..................................................................................................968

...................................968

Ind AS 110 Consolidated Financial Statements and Ind AS 28 Investments in

Associates and Joint Ventures ............................................................................................................968

.........................................................................968

Contents

Contents

lvi

Presentation .............................................................................................................................................969

Changes in presentation .....................................................................................................................969

......................................................................969

..............................................969

Ind AS 114 Vs. First time adoption .........................................................................................................972

Disclosure ...............................................................................................................................................974

.................................................................................974

........................................................................................................975

Deferred tax ............................................................................................................................................976

.................................................................................................976



Chapter 43: Income Tax Disclosure Standards

Introduction .............................................................................................................................................981

Objective .................................................................................................................................................982

Overview .................................................................................................................................................982

Past history and journey to reach ICDS ..................................................................................................982

Applicability ...........................................................................................................................................983

Transitional ProvisionS ...........................................................................................................................983

Comparative Status .................................................................................................................................983

Detailed analysis .....................................................................................................................................984

.....................................................................................984

ICDS I Vs AS 1 ............................................................................................................................984

ICDS I Vs Ind AS 1 and Ind AS 8 ................................................................................................985

Disclosure requirements under ICDS I ........................................................................................985

ICDS II – Valuation of Inventories ....................................................................................................985

ICDS II Vs AS 2 ...........................................................................................................................985

ICDS II Vs Ind AS 2 ....................................................................................................................986

Disclosure requirements under ICDS II .......................................................................................986

ICDS III – Construction Contracts ....................................................................................................986

ICDS III Vs AS 7 .........................................................................................................................986

ICDS III Vs Ind AS 11 .................................................................................................................987

Contents

lvii

Disclosure requirements under ICDS III......................................................................................987

ICDS IV – Revenue Recognition ......................................................................................................987

ICDS IV Vs AS 9 .........................................................................................................................987

ICDS IV Vs Ind AS 18 .................................................................................................................988

Disclosure requirements under ICDS IV .....................................................................................988

ICDS V – Tangible Fixed Assets .......................................................................................................989

ICDS V Vs AS 10 .........................................................................................................................989

ICDS V Vs Ind AS 16 ..................................................................................................................989

Disclosure requirements under ICDS V .......................................................................................989

...............................................................990

ICDS VI Vs AS 11 .......................................................................................................................990

ICDS VI Vs Ind AS 21 .................................................................................................................990

Disclosure requirements under ICDS VI .....................................................................................991

ICDS VII – Government Grants ........................................................................................................991

ICDS VII Vs AS 12 ......................................................................................................................991

ICDS VII Vs Ind AS 20 ................................................................................................................991

Disclosure requirements under ICDS VII ....................................................................................991

ICDS VIII Vs AS 13 – Securities ......................................................................................................992

ICDS VIII Vs AS 13 .....................................................................................................................992

ICDS VIII Vs Ind AS 32 and Ind AS 109 ....................................................................................992

Disclosure requirements under ICDS VIII ...................................................................................992

ICDS IX– Borrowing Costs ...............................................................................................................993

ICDS IX Vs AS 16 .......................................................................................................................993

ICDS IX Vs Ind AS 23 .................................................................................................................993

Disclosure requirements under ICDS IX .....................................................................................993

.................................................994

ICDS X Vs AS 29 ........................................................................................................................994

ICDS X Vs Ind AS 37 ..................................................................................................................994

Disclosure requirements under ICDS X .......................................................................................994

Foreseeable practical issues ....................................................................................................................995

ind as vol 1 prelims (preface contents)

Documents