Companies (Ind AS) Amendment Rules, 2018: MCA Notification dt. 28 March 2018

Companies (Ind AS) Amendment Rules, 2018: MCA Notification dt. 28 March 2018 (Download pdf copy)

The MCA has notified the Companies (Indian Accounting Standards/ Ind AS) Amendment Rules, 2018 on 28 March 2018, whereby “Ind AS-115 relating to Revenue from Contracts with Customers” has been made applicable from financial years 2018-19 (i.e. 1 April, 2018 onwards) and changes in various Ind AS have been made, like Ind AS 1, 2, 8, 11, 12, 16,17,18,21,23,28,32,34,36,37,38,40, 101, 103, 104, 107, 109, 112, 114, etc.

Companies (Ind AS) Amendment Rules, 2018: MCA Notification dt. 28 March 2018

G.S.R. ….. (E).—In exercise of the powers conferred by section 133 read with section 469 of the Companies Act, 2013 (18 of 2013) and sub-section (1) of section 210A of the Companies Act, 1956 (1 of 1956), the Central Government, in consultation with the National Advisory Committee on Accounting Standards, hereby makes the following rules further to amend the Companies (Indian Accounting Standards) Rules, 2015, namely:—

1. Short title and commencement.-

(1) These rules may be called the Companies (Indian Accounting Standards) Amendment Rules, 2018.

(2) These rules shall come into force from the 1st day of April, 2018.

2. In the Companies (Indian Accounting Standards) Rules, 2015 (hereinafter referred to as the principal rules), in the “Annexure”, under the heading “B. Indian Accounting Standards (Ind AS)”,- (contd… please refer above attachment)

ICAI Press Release dt. 31 March 2018 on issuance of New Ind AS 115 by MCA

An important development in Ind AS Framework i.e. a new Ind AS in the area Revenue recognition has been notified by Ministry of Corporate Affairs which was formulated based on recommendation made by The Institute of Chartered Accountants of India.

The key amendment is the issuance of new Revenue standard Ind AS 115 and withdrawal of existing revenue standards and related guidance. The new revenue standard is mandatorily effective for accounting periods beginning on or after 1 April 2018.

The New Revenue Standard viz. Ind AS 115 is based on IFRS 15 Revenue for Contracts with Customers which is the culmination of IFRS and US GAAP convergence project. Information about revenue is very important and is used to assess a company’s financial performance and position and to compare that company with other companies. New Revenue Standard brings in a comprehensive and robust framework (‘5 Step’ Model) for recognition, measurement and disclosure of revenue. Particularly, Ind AS 115:

i) Improves comparability of revenue across entities, industries, global capital markets;

ii) Prescribes only one underlying principle for revenue recognition i.e. transfer of control over goods/services and replaces the ‘fair value’ concept with ‘Transactions Price’ which is better suited for measurement of revenue;

iii) Eliminates Reduces interpretations/guidance by bringing in clarity in areas such as multiple element contracts/bundled products, licensing, royalties for intellectual properties, financing components, variable consideration; and

iv) Requires more improved disclosures to help investors and analysts better under standard entity’s revenue.

CA. Naveen N.D. Gupta, President, ICAI said, “ICAI is committed to enhance the quality of financial reporting in India and align in with the best global practices so that the nation and it’s economy benefits from high quality globally acceptable financial reporting standards formulated on transparent and fair basis. ICAI strongly believes remaining converged with IFRS Standards at all times will enable Indian entities to raise funds at globally competitive rates by eliminating country specific discount phenomena such as India discount, Korea discount etc.”

CA. S. B. Zaware, Chairman, Accounting Standards Board, ICAI added, “ICAI continues to play sheet anchor role in the Financial Reporting Standards setting framework as enshrined in Section 133 of the Companies Act 2013.”

Related Posts:

Companies (Ind AS) Amendment Rules, 2017

Companies (Ind AS) Amendment Rules, 2016

Companies (Ind AS) Rules 2015

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