Monthly GAAP Bulletin - April 2021 Vol I

India Updates – Effective

Accounting updates

• Educational material on Ind AS 105, Non current Assets Held for Sale and Discontinued Operations

The Institute of Chartered Accountants of India (ICAI) has issued Educational Material on Ind AS 105, Non Current Assets Held for Sale and Discontinued Operations, which addresses certain relevant aspects envisaged in Ind AS 105 by way of brief summary of the standard and frequently asked questions that are being/expected to be encountered while implementing Ind AS 105. Click here for announcement.

• Guidance note on accrual basis of accounting

The ICAI has issued revised edition of guidance note on accrual basis of accounting (originally issued in the year 1988). The guidance note explains the fundamental concept of accrual accounting and the process of transition from cash basis to accrual basis of accounting. Click here to read the guidance note.

Auditing updates

• Risk based internal audit for banks and NBFCs

The Reserve Bank of India (RBI) had issued risk based internal audit (RBIA framework) mandated for all scheduled commercial banks except regional rural banks. Now, the RBI has issued notification dated 3 February 2021 which mandates the RBIA Framework for the following non-banking financial companies (NBFCs) and primary (urban) Co-operative banks (UCBs):

a. All deposit taking NBFCs, irrespective of their size;

b. All non deposit taking NBFCs (including core investment companies) with asset size of 5,000 crore and above; and

c. All UCBs with asset size of 500 crore and above.

Such entities are required to implement the RBIA Framework by 31 March 2022.

Click here for the notification.

• Guidance note on Audit of Banks 2021

The ICAI has issued guidance note on audit of banks (2021 edition) for statutory audit of banks/bank branches for the year ended 31 March 2021. The Guidance Note is bifurcated into following two sections:

• Section A: Statutory Central Audit

• Section B: Bank Branch Audit

The Guidance Note also contains illustrative formats of engagement letter, auditor’s report, management representation letter and texts of relevant master directions and circulars issued by the RBI.

Click here for the guidance note.

India updates - Proposed

Accounting updates

• Exposure drafts of amendments to Ind AS

Accounting Standards Board of the ICAI has issued several exposure drafts of amendments to certain Ind AS for comments, which considers amendments made in corresponding IFRS Standards issued by the

International Accounting Standards Board (IASB). Click here for the ICAI announcement

Auditing updates

• Exposure draft on standard for audit of smaller and less complex entities

Auditing and Assurance Standards Board (AASB) of the ICAI has issued exposure d raft on standard for audit of smaller and less complex entities for comments. Click here for the exposure draft

Regulatory updates

• Consultation paper on review of regulatory provisions related to independent directors

With a view to further strengthen the independence of Independent Directors and enhance their effectiveness in the protection of interests of minority shareholders and performing other functions, SEBI has issued a consultation paper on review of regulatory p rovisions related to independent directors (consultation paper) for public comments. Click here for the consultation paper

International updates - Effective

IFRS updates

• Amendments to IAS 1, Presentation of Financial Statements, and IFRS Practice Statement 2, Making Materiality Judgements, and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors

International updates – Proposed

IFRS updates

• Amendments to IFRS 16, Leases: COVID-19-Related Rent Concessions beyond 30 June 2021

Auditing updates

• Exposure draft on proposed quality management standards

• Exposure draft on Proposed Statement on Auditing Standards, Inquiries of the Predecessor Auditor Regarding Fraud and Non-compliance with Laws and Regulations