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Voices on Reporting - Special session: Focus on technology sector- Impact of recent tax amendments and certain challenge

Voices on Reporting - Special session: Focus on technol

In this session of VOR webinar, we discussed certain accounting and financial reporting impact areas of recent tax amendments and few challenges with regard to Ind AS 115, Revenue from Contracts with Customers.

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In this session of VOR webinar, we discussed certain accounting and financial reporting impact areas of recent tax amendments and few challenges with regard to Ind AS 115, Revenue from Contracts with Customers.

-Impact of recent tax amendments: On 20 September 2019, the Government of India has issued the Taxation Laws (Amendment) Ordinance, 2019 (Ordinance, 2019). This Ordinance contains substantial amendments in the Income-tax Act 1961 (the Act) and the Finance (No. 2) Act 2019.

The key amendments relate to the following:

  • Tax concession for domestic companies
  • Tax concession for new domestic manufacturing companies
  • Reduction in Minimum Alternate Tax (MAT) rate.

The impact of the amendments would depend on a company’s specific facts and circumstances. 

-Certain challenges with regard to Ind AS 115: Indian Accounting Standard (Ind AS) 115 has introduced a single comprehensive model of accounting for revenue arising from contracts with customers. Contracts in the technology sector often include multiple elements (transition and steady state maintenance contracts), variable pricings, employee rebadging in large deals etc. The application of Ind AS 115 involves significant judgements while giving effect to such transactions.

 

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