The Ministry of Corporate Affairs on 24th July, 2020 notified the Companies (Indian Accounting Standards) Amendment Rules, 2020, thereby amending the Rules of 2015. The entities must apply these amendments to business
combinations, whose acquisition date is on or after the start of the first annual reporting period beginning on 1st April, 2020 and to asset acquisitions that take place on or after that period. The amendment introduces following changes to the Rules:
- The new Rules amend Indian Accounting Standards 107 that relates to disclosures to be made in respect of financial instruments by introducing a provision specifying the disclosures to be made where there is uncertainty due to Interest Rate Benchmark Reform
- The new Rules amend Indian Accounting Standards 109 providing detailed provisions for temporary exceptions from applying specific hedge accounting requirements and transition for hedge accounting. These must be applied by entities for annual periods starting on or after 1st April, 2020.
- Indian Accounting Standard 116 has been amended to provide that subject to specified conditions, any rent concession due to COVID-19 may, if the lessee so elects, not be assessed as a lease modification. This is subject to disclosures to be made by the lessee and shall apply to annual reporting periods on or after 1 st April, 2020 or where the lessee has not approved the financial statements prior to this amendment, it may be applied for such periods from 1 st April, 2019.
- In Indian Accounting Standards 1 and 8, changes have been made to the definition of material in relation to material information.
- Changes have also been made to Accounting Standards 10, 34, and 37 relating to Events after the Reporting Period, Interim Financial Reporting, and Provisions, Contingent Liabilities and Contingent Assets
Click here to read the amendment.
