Difference between Ind AS 32, Financial Instruments: Presentation and existing AS 31 on Financial Instruments: Presentation

(i) The existing AS 31 does not apply to contracts for contingent consideration in a business combination in case of acquirers. Ind AS 32 does not exempt such contracts. (Paragraph 3 (c) of existing AS 31)

(ii) Ind AS 32 includes the definition of puttable instruments and deals with the same. The existing AS 31 does not deal with the same. (Primarily Paragraphs 11, 16A-16D, and consequential changes in paragraphs 17, 18, 19, 22, 22A, 23, 25, AG13 AG14 AAG 14J, AG27, AG 29A of Ind AS 32)

(iii) Ind AS 32 does not include deposits and advances in common examples of financial assets and financial liabilities. The existing AS 31 includes the same. (AG 4 of Ind AS 32 and paragraph 12 (e) of existing AS 31)

(iv) Ind AS 32 specifies conditions for offsetting a financial liability or financial asset. The existing AS 31 does not specify the same. (AG 38 of Ind AS 32)

(v) Ind AS 32 requires that in some circumstances, because of the differences between interest and dividends with respect to matters such as tax deductibility, it is desirable to disclose them separately in the statement of profit and loss. Disclosures of the tax effects are made in accordance with Ind AS 12. The existing AS 31 does not mention this aspect. (paragraph 40 of Ind AS 32 and paragraph 77 of existing AS 31)

(vi) Ind AS 32 specifically mentions that the related amount of income taxes recognised directly in equity is included in the aggregate amount of current and deferred income tax credited or charged to equity that is disclosed under Ind AS 12, Income Taxes. The existing AS 31 does not mention so. (Paragraph 39 of Ind AS 32 and paragraph 75 of existing AS 31

(vii) As an exception to the definition of ‘financial liability’ in paragraph 11 (b) (ii), Ind AS 32 considers the equity conversion option embedded in a convertible bond denominated in foreign currency to acquire a fixed number of entity’s own equity instruments as an equity instrument if the exercise price is fixed in any currency. This exception is not provided in AS 31. (ICAI)