a) The Ministry of Corporate Affairs on Friday, notified the Companies (Indian Accounting Standards) Amendment Rules, 2020. The Rules seek to amend the Companies (Indian Accounting Standards) Rules, 2015.
b) The Amendments have been made to the IndAS 1 related to Presentation of Financial Statements; IndAS 103 related to Business Combinations; IndAS 107 related to Financial Instruments i.e. Disclosures; IndAS 109 related to Financial Instruments; INdAS 116 related to Leases; INdAS 8 related to Operating Segments; IndAS 10 related to Events after the Reporting Period; IndAS 34 related to Interim Financial Reporting and IndAS 37 related to Provisions, Contingent Liabilities, and Contingent Assets, which are notified so far.
c) In Indian Accounting Standard (Ind AS) 103, for paragraph 3, the “an entity shall determine whether a transaction or other event is a business combination by applying the definition in this Ind AS, which requires that the assets acquired and liabilities assumed constitute a business.
d) If the assets acquired are not a business, the reporting entity shall account for the transaction or other event as an asset acquisition. Paragraphs B5–B12D provide guidance on identifying a business combination and the definition of a business,” shall be substituted.
e) In Indian Accounting Standard (Ind AS) 107, after paragraph 24G, the “Uncertainty arising from interest rate benchmark reform,” shall be inserted In Indian Accounting Standard (Ind AS) 109, after paragraph 6.7.4, the temporary exceptions from applying specific hedge accounting requirements; highly probable requirement for cash flow hedges; reclassifying the amount accumulated in the cash flow hedge reserve; assessing the economic relationship between the hedged item and the hedging instrument; designating a component of an item as a hedged item; end of application; and Transition for hedge accounting (Chapter 6) shall be inserted.
f) In Indian Accounting Standard (Ind AS) 116, in Appendix C after paragraph C20, the COVID-19 related rent concessions for lessees shall be inserted. In Indian Accounting Standard (Ind AS) 1, in paragraph 7, for the definition of the term “Material”, the “Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity,” shall be substituted.
g) In Indian Accounting Standard (Ind AS) 8, in paragraph 5, for the definition of term ‘Material’, “the term “Material”, used in this Standard shall have the same meaning as assigned to it in paragraph 7 of Ind AS 1,” shall be substituted. In Indian Accounting Standard (Ind AS) 10, for paragraph 21, “If non-adjusting events after the reporting period are material, non-disclosure could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.
h) Accordingly, an entity shall disclose the following for each material category of the non-adjusting event after the reporting period of the nature of the event; and an estimate of its financial effect, or a statement that such an estimate cannot be made,” shall be substituted.