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Issue no. 34 | May 2019

Issue no. 34 | May 2019

The new leases standard (Ind AS 116, Leases) is applicable from 1 April 2019. To ease the implementation, the standard provides different transition options and practical expedients, which can be elected independently of each other or can also be elected on a lease-by-lease basis.

The new leases standard (Ind AS 116, Leases) is applicable from 1 April 2019.

The new leases standard (Ind AS 116, Leases) is applicable from 1 April 2019. To ease the implementation, the standard provides different transition options and practical expedients, which can be elected independently of each other or can also be elected on a lease-by-lease basis. The choice of transition option and practical expedient selected will affect the costs and timing of implementation of the standard. These choices will also affect financial statements for years to come. In this edition of Accounting and Auditing Update (AAU), we have included an article which discusses in detail the different transition options available to an entity under Ind AS 116 with the help of practical examples.

Recently, IFRS Interpretations Committee (IFRIC) published a new guidance, IFRIC 23, Uncertainties over Income Tax Treatments. The interpretation clarifies how to apply the recognition and measurement requirements in International Accounting Standard (IAS) 12, Income Taxes when there is uncertainty over income tax treatments. This guidance has also been incorporated in Ind AS. Similar guidance is available in US GAAP. Our article on the topic discusses the guidance provided by the interpretation under IFRS/Ind AS as well as under US GAAP with the help of examples.

Based on the review of major interest rate benchmarks e.g. LIBOR, EURIBOR, etc., the Financial Stability Board (FSB) recommended replacement of existing interest rate benchmarks, such as Inter-Bank Offer Rates (IBORs) with alternative, nearly risk-free interest rates (alternate interest rates) that are based to a greater extent on transaction data. The International Accounting Standards Board (IASB) has added a project to consider the effects of IBOR reforms on financial reporting. This edition of AAU carries an article which discusses the accounting risks posed by these reforms, and the steps taken by IASB to mitigate these risks.

Our publication also carries a regular synopsis of some recent regulatory updates.
 

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