Share with your friends

Issue no. 39 | October 2019

Issue no. 39 | October 2019

The new standard on leases, Indian Accounting Standard (Ind AS) 116, Leases is applicable to companies (following Ind AS road map) from 1 April 2019. The new standard introduces a significant change in accounting by lessees. The change in accounting involves significant judgement and requires assessment of accounting of lease at lease commencement and during the lease term. This standard would also require changes in processes and internal controls. Continuing with the series of implementation challenges, in this edition of Accounting and Auditing Update (AAU), we have covered few more key areas where companies are likely to face issues while implementing the new standard.

Ind AS 115, Revenue from Contracts with Customers brought in a new model for revenue recognition that is based on the transfer of control. It is a significant change from the earlier applicable revenue guidance and changed the way companies recognise, present and disclose their revenue. The annual reports presented by the companies for year ended 31 March 2019 are the first full set of financial statements presented by companies as per Ind AS 115 framework. In order to understand the insights that these financial statements provide on the impact of Ind AS 115 on revenue recognised, we have included an analysis of the disclosures given in the annual reports by the Nifty50 companies for the year ended 31 March 2019.

Recently, the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) considered an issue on accounting treatment of guarantee fee paid to a party other than the  lender while computing effective interest rate on financial liability. Our article on the topic covers the guidance provided by the EAC.    

As is the case each month, we have also included a regular round-up of some recent regulatory updates in India and internationally.

© 2020 KPMG Assurance and Consulting Services LLP, an Indian Limited Liability Partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG (Registered) (a partnership firm with Registration No. BA- 62445) converted into KPMG Assurance and Consulting Services LLP (a Limited Liability partnership firm) with LLP Registration No. AAT-0367 with effect from July 23, 2020.

For more detail about the structure of the KPMG global organization please visit

Connect with us