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Ind AS amendments including accounting for rent concessions and interest rate benchmark reforms

Ind AS amendments including accounting

This issue of First Notes aim to provide an overview of the amendments made to Ind AS.

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Indian Accounting Standards (Ind AS) are largely converged with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). In the recent past, IASB along with IFRS Interpretations Committee (IFRIC) has issued various amendments to IFRS as part of annual improvement process or as specific amendments.

In line with the amendments made to IFRS, on 24 July 2020, the Ministry of Corporate Affairs (MCA) has issued amendments to certain Ind AS. Some of the important amendments relate to:

  • Ind AS 1, Presentation of Financial Statements and Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Error: Refined definition of term ‘material’
  • Ind AS 103, Business Combinations: Revised definition of a ‘business’ and introduction of an optional concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business
  • Ind AS 109, Financial Instruments: Modification to some specific hedge accounting requirements to provide relief to the potential effects of uncertainty caused by the interest rate benchmark (IBOR) reform
  • Ind AS 116, Leases: Practical expedient which permits lessees not to account for COVID-19 related rent concessions as a lease modification.

The amendments are effective from annual reporting periods beginning on or after 1 April

2020. However, with respect to Ind AS 116, in case a lessee has not yet approved the financial statements for issue before the issuance of the amendments, then the same may be applied for annual reporting periods beginning on or after 1 April 2019.

This issue of First Notes aim to provide an overview of the amendments made to Ind AS.

To access the text of the MCA notification, please click here.

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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.

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