This edition of Accounting and Auditing Update (AAU) analyses the impact of a Goods and Services Tax (GST) on Ind AS financial reporting.
This edition of Accounting and Auditing Update (AAU) analyses the impact of a Goods and Services Tax (GST) on Ind AS financial reporting. GST is a destination based consumption tax which brings about a paradigm shift in the present indirect tax regime by subsuming most of the indirect taxes. GST integrates multiple indirect taxes (viz. central levies such as excise duty, service tax, and also state levies such as value added tax, octroi, entry tax, etc.). It fundamentally impacts all aspects of business and extends beyond taxation.
As banks transition to Ind AS, they would need to compute effective interest on floating rate financial instruments under Ind AS 109, Financial Instruments. This a complex area of implementation and the standard does not prescribe an approach to compute Effective Interest Rate (EIR) in the case of floating rate financial instruments. In our article, we discuss alternative methods that banks may adopt for computing the EIR on floating-rate instruments held by them.
While transitioning to Ind AS, selection and application of accounting policies is an important area of judgement for entities. An entity should consider materiality of transactions, events and conditions while formulating accounting policies, and apply accounting policies consistently to similar transactions. Our article emphasises the manner of selection and application of accounting policies along with disclosure requirements and how to present changes when there is a change in accounting policy.
Under the Companies Act, 2013 (2013 Act) section, we describe a provision relating to declaration and payment of dividend. The article also compares the requirements of the 2013 Act with the Securities and Exchange Board of India’s (SEBI) regulations with regard to dividend.
Our publication also carries a regular synopsis of recent regulatory updates in India and internationally.
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