Ind AS 115, Revenue from Contracts with Customers introduces a single comprehensive model of accounting for revenue arising from contracts with customers and would supersede the current revenue recognition guidance. In the real estate and construction sector, accounting for sales contracts is likely to change due to the application of a new revenue recognition standard. In this edition of Accounting and Auditing Update (AAU), we highlights the significant areas where revenue recognition under real estate and construction sector is expected to change due to implementation of Ind AS 115. This standard is applicable to Indian companies covered in the Ind AS road map from 1 April 2018.
The new Standard on Auditing (SA) 701, Communicating Key Audit Matters in the Independent Auditor’s Report would be applicable to listed companies and certain other companies from 1 April 2018. The new SA opens the door for an auditor to give users more insight into the audit and improve transparency. The article on this topic aims to highlight significant changes expected in the auditor’s report due to communication of key audit matters.
On transition to Ind AS, banks would need to determine whether securitisation transactions entered through trusts or special purpose vehicles would need to be derecognised or consolidated. Our article describes with the help of an illustrative whether a certain securitisation transaction would meet the criteria for derecognition of a financial instrument and application of control definition on such special purpose entities or trusts.
This publication also cast lens on accounting for income taxes. The article covers two practical scenarios: the first one relates to accounting for income taxes in any interim period and second one is accounting for deferred taxes in a business combination involving entities under common control.
Our publication also carries a regular synopsis of some recent regulatory updates in India and internationally.