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Issue 14 | September 2017

Indian Accounting Standards (Ind AS) mandate preparation of Consolidated Financial Statements (CFS). An important element of preparing CFS is the accounting and presentation of Non-Controlling Interests (NCI). Though owners of NCI do not control an entity, they still represent equity interest. Therefore, in this edition of Accounting and Auditing Update (AAU), we highlight certain practical application areas associated with the accounting and presentation of NCI e.g. manner of attribution of profits and losses, impact of potential voting rights, sale/purchase of equity to/from NCI, etc. The article also captures the detailed disclosure requirements relating each material subsidiary e.g. presentation of summarised financial information, significant restrictions and judgements.

The Companies Act, 2013 (2013 Act) article provides an overview of the 2013 Act’s requirements with respect to depreciation and also integrates the guidance provided in the application guide and guidance note on accounting of depreciation issued by the Institute of Chartered Accountants of India (ICAI).

This publication also carries an article on goodwill impairment accounting under Ind AS. Under Ind AS, goodwill arises when there is a business combination and also assets are no longer amortised but tested for impairment annually. Impairment testing requires entities to exercise considerable judgement and there is a need to use assumptions that represent realistic future expectations. Additionally, certain disclosures relating to goodwill e.g. sensitivity analysis and estimate of recoverable amount are most challenging. Therefore, our article elaborates on the key considerations and disclosures that an entity should focus while conducting a goodwill impairment test.

Our publication also carries a regular synopsis of recent regulatory updates in India and internationally along with an article highlighting key clarifications provided by ICAI in its education material on Ind AS 16, Property, Plant and Equipment.