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S. No.
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Issue
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Clarification
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Determination of applicability
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1.
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The companies, covered in the phase I,
would be required to convert their opening balance sheet as at 1st April 2011 in compliance
with the first set of Accounting Standards (i.e. the converged Accounting
Standards). Accordingly, companies are not required to provide comparative
figures for the year 2010-11 as first set of Accounting Standards (i.e. the
converged Accounting Standards).
Whether companies can voluntarily opt to
provide comparative figures for 2010-11 as per the first set of Accounting
Standards (i.e. the converged Accounting Standards)?
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Companies covered in Phase I will prepare
their financial statements for 2011-12 in accordance with the first set of
Accounting Standards (i.e. the converged Accounting Standards) but will show
previous years’ figures as per the financial statements for 2010-11 i.e. as
per non-converged accounting standards.
However, the entity shall have the option
to add an additional column to indicate what these figures could have been if
the first set of Accounting Standards (i.e. converged accounting standards)
had been applied in that previous year.
Companies which make this additional
disclosure will, for this purpose, convert their opening balance sheet as at
the date on which this previous year commences and, in that case, a further
conversion of the opening balance sheet for the year for which the financial
statements are prepared will not be necessary.
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2.
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Whether companies covered in 2nd
/ 3rd phase for application of the first set of Accounting Standards
(i.e. the converged Accounting Standards) can voluntarily opt to apply the
same w.e.f accounting year beginning on 1.4.2011?
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Such Companies will have an option for
application of the first set of accounting standards (i.e. the converged
Accounting Standards) only for the financial year commencing on 1st April, 2011 or thereafter.
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3.
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As per the roadmap, in phase I, the
following categories of companies (other than banking companies, insurance
companies and NBFCs) will convert their opening
balance sheet as at 1st April, 2011 in compliance with the first
set of Accounting Standards(i.e. the converged Accounting Standards)
a. Companies which are part of NSE –
Nifty 50
b. Companies which are part of BSE – Sensex 30
c. Companies whose shares or other
securities are listed on stock exchanges outside India
d. Companies, whether listed or not,
which have a net worth in excess of Rs.1,000
crores
What is the cut-off date on which the
aforesaid criteria shall be applied in order to determine the companies
falling in each of the aforesaid four categories of companies which will
convert their opening balance sheet as at 1st
April, 2011 in compliance with the first set of Accounting Standards
(i.e. the converged Accounting Standards)?
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The date for determination of the criteria
is the Balance Sheet as at 31st
March 2009 or the first Balance Sheet prepared thereafter when the
accounting year ends on another date.
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4.
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As per the proposed roadmap for Banks and
NBFCs, in phase I, the following categories will
convert their opening balance sheet as at 1st
April, 2013 in compliance with the notified accounting standards
which are converged with IFRS:
i)
Banks
All scheduled commercial banks and
those urban co-operative banks which have a net worth in excess of Rs. 300 crores will convert
their opening balance sheet as at 1st
April, 2013 in compliance with the first set of accounting standards
(i.e., converged accounting standards)
ii)
NBFCs
a. Companies which are part of NSE –
Nifty 50
b. Companies which are part of BSE – Sensex 30
c. Companies, whether listed or not,
which have a net worth in excess of Rs.1,000
crores
What is the cut-off date on which the
aforesaid criteria shall be applied in order to determine the scheduled
commercial banks/ urban co-operative Banks/ NBFCs
falling in each of the aforesaid categories which will convert their opening
balance sheet as at 1st
April, 2013 in compliance with the first set of Accounting Standards
(i.e. the converged Accounting Standards)?
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The date for determination of the
criteria is the Balance Sheet as at 31st
March 2011 or the first Balance Sheet prepared thereafter when the
accounting year ends on another date.
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Applicability for entities that are
subsidiaries, joint ventures or associates of companies covered under the
convergence roadmap
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5.
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There might be a situation where the
parent company is covered in any one of the three phases for specified class
of companies for applying the first set of Accounting Standards (i.e.
converged Accounting Standards), while the other group companies (subsidiaries,
joint ventures or associates) are not covered under such phasing plan.
In such a scenario, whether it would be
permissible for the companies, which are not individually covered under the
phasing plan for application of the first set of Accounting Standards (i.e.
converged Accounting Standards), to voluntarily opt for application of the
first set of Accounting standards(i.e. converged Accounting Standards, even
for their standalone financial statements?
May also clarify the position in a situation
where the phasing plan for application of the first set of Accounting
Standards (i.e. the converged Accounting Standards) gets attracted to one of the entity in
the group while the parent company is not covered.
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The criteria is
to be considered for each company's standalone accounts. The companies covered in a particular phase
having subsidiaries, joint ventures or associates not covered in those
phase/phases will prepare their consolidated financial statements according
to the first set of Accounting standards (i.e. the converged Accounting
Standards)
When one or more companies in a group
fall in a phase other than the phase applicable to the parent company, they
will continue to prepare standalone accounts according to the phase
applicable to them but the parent may need to make amendments to these
accounts for the purposes of consolidation as per converged accounting
standards. Such subsidiaries, joint
ventures or associate companies may have the option for early adoption of
converged accounting standards.
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Discontinuing use of the first set of
Accounting Standards(i.e. the converged Accounting Standards)
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6.
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Once a company gets covered in the
specified class of companies in any one of the phases, as identified in the
roadmap issued by the Ministry and converts its opening Balance Sheet as per the
specified date in accordance with the
first set of Accounting Standards(i.e. the converged Accounting Standards),
whether it would have to continue to follow the same set of accounting standards
in the future as well even if it no longer satisfies the specified criteria?
Will it be possible for such a company to revert to existing Indian
accounting standards?
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Once a company starts following the first
set of Accounting standards (i.e. the converged Accounting Standards) on the
basis of the eligibility criteria, it will be required to follow such
Accounting standards for all the subsequent financial statements even if any
of the eligibility criteria does not subsequently apply to it.
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Calculation of net worth
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7.
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What are the rules for calculation of
qualifying net worth to be recommended to the companies in order to determine
their applicability for applying the first set of Accounting Standards (i.e.
converged accounting standards)?
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For the purpose of calculation of
qualifying net worth of companies, the following rules will apply:
a.
The net worth will be calculated as per the audited balance sheet of
the company as at 31st March 2009 or the first balance sheet for
accounting periods which end after that date.
b.
The net worth will be calculated as the Share Capital plus Reserves
less Revaluation Reserve, Miscellaneous Expenditure and Debit Balance of the
Profit and Loss Account.
c.
For companies which are not in existence on 31st March 2009, the net worth will be calculated on the basis of the
first balance sheet ending after that date.
The calculation of net worth is for the
purpose of the criteria only since "net worth" is a part of the
criteria.
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8.
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What are the rules for calculation of
qualifying net worth to be recommended to the scheduled commercial Banks/
urban co-operative Banks/ NBFCs in order to
determine their applicability for applying the first set of Accounting
Standards (i.e. the converged Accounting Standards)?
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For the purpose of calculation of
qualifying net worth of scheduled commercial Banks/ urban co-operative Banks/ NBFCs, the following rules will apply:
a.
The net worth will be calculated as per the audited balance sheet of
the scheduled commercial Banks/ urban co-operative Bank/NBFC as at 31st March 2011 or the first balance sheet for accounting periods which
ends after that date.
b.
The net worth will be calculated as the Share Capital plus Reserves
less Revaluation Reserve, Miscellaneous Expenditure and Debit Balance of the
Profit and Loss Account.
c.
For scheduled commercial Banks/ urban co-operative Banks/NBFCs which are not in existence on 31st March 2011, the net worth will be calculated on the basis of the
first balance sheet ending after that date.
The calculation of net worth is for the
purpose of the criteria only since "net worth" is a part of the
criteria.
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Removal of options
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9.
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In case the notified converged accounting
standard is not fully consistent with the IAS/IFRS (i.e., despite
intention to converge, some deviations remain), as issued by the IASB, it is
presumed that Indian companies will continue to follow the first set of
Accounting Standards (i.e. converged accounting standards) as notified by the
Government of India and not adopt IFRS in toto.
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Companies will follow the first set of
Accounting Standards (i.e. the converged Accounting Standards) and not the IFRS.
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