Companies in India are in the process of evaluating the impact of the novel coronavirus (COVID-19) on their business operations and performance. Therefore, it becomes imperative for companies to reflect these impacts and consequent steps taken to address them adequately in their financial reporting. Recently, the Institute of Chartered Accountants of India (ICAI) has issued a guidance on Indian Accounting Standards (Ind AS) which highlights specific requirements of accounting standards that may need special attention while preparing and reporting financial information during current times. In this edition of Accounting and Auditing Update (AAU), we discuss ICAI guidance on some of the key requirements of Ind AS to be considered by companies in their financial reporting.
The shift in the benchmark interest rates (such as Interbank Offered Rates (IBORs)) with ‘alternative nearly risk-free interest rates’ is expected to pose stability and liquidity risks for global markets and introduces financial risks and accounting challenges to all companies with IBOR exposures- banks and corporates alike. To address the financial reporting issues that could arise from the replacement of interest rate benchmarks, recently, the International Accounting Standards Board (IASB) has issued an exposure draft and proposed reliefs, amendments and clarifications in certain International Financial Reporting Standards (IFRS). Our article on the topic provides an overview of the proposals made by IASB in its exposure draft to address the post-replacement issues and initial steps taken in India by the Reserve Bank of India and Indian Banking Association.
In this edition, we have also summarised some of the key updates issued by the Securities and Exchange Commission (SEC) for the companies following US GAAP framework such as revised definition of accelerated flier, guidance on management’s discussion and analysis and Brexit-related disclosures. The article also covers results of KPMG U.S.’s analysis of Critical Audit Matters (CAMs) reported in the auditors’ report of large accelerated filers.
As is the case each month, we have also included a regular round-up of some recent regulatory updates in India and internationally.