CA ROHIT UPADHYAYA

BDO has released IFRS Accounting Standards In Practice - IFRS 18 Presentation and Disclosure in Financial Statements (Presentation in the Statement of Profit or Loss). This publication is an in depth and comprehensive guide to the requirements of IFRS 18 applicable to the preparation of the statement of profit or loss and includes dozens of flowcharts, examples and practical insights about how IFRS 18 will affect entities that apply IFRS Accounting Standards. https://lnkd.in/dMBpGVMU Abdallah Farhat CPA, CVA, CFE Haitham El Khatib, CPA Nariman Shoukry , CPA, ESAA #accounting #IFRS #IFRS18 #disclosures #reporting #finance #Kuwait

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BDO has released IFRS Accounting Standards In Practice - IFRS 18 Presentation and Disclosure in Financial Statements (Presentation in the Statement of Profit or Loss). This publication is an in depth and comprehensive guide to the requirements of IFRS 18 applicable to the preparation of the statement of profit or loss and includes dozens of flowcharts, examples and practical insights about how IFRS 18 will affect entities that apply IFRS Accounting Standards. 👉 Read more: https://lnkd.in/dc5BPbWi

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❓ Whether "Disallowing the RP debit from the ECrL" as per R-86A = "Making Debit entries in the ECrL by the department"? 🖋 Ans - "Making Debit Entries in ECrL by the department" will tantamount to permanent recovery of the input tax credit and certainly permanent recovery is governed by the statutory provisions (Section 73 of 74 of CGST Act) and it certainly travels beyond the plain language and underlined intent Rule 86A. 🔥 If no ITC was available in the credit ledger, the rules does not provide for insertion of negative balance in the ledger! Department can only block ITC, if available and cannot make a debit entry! Case Law - M/s Laxmi Fine Chem (Telangana HC) dt 18-3-24

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🌟 Important Update from the IASB: New Accounting Standards Released 🌟 In April 2024, the International Accounting Standards Board (IASB) introduced two groundbreaking accounting standards that will shape the future of financial reporting: 📌 IFRS 18 — Presentation and Disclosure in Financial Statements 📌 IFRS 19 — Subsidiaries without Public Accountability 🔍 Effective Date: These standards will take effect for reporting periods beginning on or after January 1, 2027, providing organizations with a transition period of nearly three years to prepare. 📊IFRS 18: This standard will replace IAS 1 and bring substantial changes to the structure and format of financial statements. A key enhancement is the requirement to group assets, liabilities, equity, income, expenses, and cash flows based on shared characteristics, improving clarity and comparability. Source: https://lnkd.in/dP-9bVaV 🏢IFRS 19: This new standard, tailored for specific types of organizations, outlines disclosure requirements for subsidiaries that do not have public accountability. It aims to reduce the reporting burden while maintaining the quality and usefulness of financial information. Source: https://lnkd.in/gGH8f26i As professionals in the ever-evolving field of accounting and finance, staying informed about these developments is crucial. Let's embrace these changes to enhance the transparency and comparability of financial statements. #IFRS18 #IFRS19 #Accounting #Finance #IASB #IFRS #FinancialReporting #Transparency #Compliance

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Core principle of IFRS 15 Accounting requirements for revenue The five-step model framework The core principle of IFRS 15 is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is delivered in a five-step model framework: [IFRS 15:IN7] Identify the contract(s) with a customer A contract with a customer will be within the scope of IFRS 15 if all the following conditions are met: [IFRS 15:9] the contract has been approved by the parties to the contract; each party’s rights in relation to the goods or services to be transferred can be identified; the payment terms for the goods or services to be transferred can be identified; the contract has commercial substance; and it is probable that the consideration to which the entity is entitled to in exchange for the goods or services will be collected. Identify the performance obligations in the contract Determine the transaction price Allocate the transaction price to the performance obligations in the contract Recognize revenue when (or as) the entity satisfies a performance obligation Superseded Standards IFRS 15 replaces the following standards and interpretations: IAS 11 Construction contracts IAS 18 Revenue IFRIC 13 Customer Loyalty Programmes IFRIC 15 Agreements for the Construction of Real Estate IFRIC 18 Transfers of Assets from Customers SIC-31 Revenue - Barter Transactions Involving Advertising Services

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نسخة ٢٠٢٤ من افضل ملخصات المعايير من مكتب BDO IFRS Accounting Standards At a Glance - 30 June 2024 IFRS Accounting Standards At a Glance has been compiled to assist in gaining a high level overview of International Financial Reporting Standards (IFRSs), including International Accounting Standards and Interpretations. IFRS Accounting Standards At a Glance includes all IFRS Accounting Standards issued and amended to 30 June 2024.

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#ias20 #governmentgrant #accountingstandard #fasb IAS 20 - GOVERNMENT GRANTS 1. Government grants require entity to comply with conditions relating to entity's operating activities IAS 20 does not cover following situations: 1. GG in financial statements reflecting effects of changing prices 2. Gov assistance in case of tax breaks 3. Gov assistance in a government owned entity, either Govt is owner or part owner Entity should not recognize GG until: 1. Entity will comply with any conditions attached to the Grant (Grant can be given at beginning or at end (cannot recognize unless received and conditions complied) 2. Grant is actually received 3. Even Grant is received but entity do not comply or no assurance that it will comply with the conditions attached to the grant 4. No difference in treatment of grant if received in cash or reduction of liability, manner of receipt is irrelevant 5. If there is no assurance that entity will comply with the conditions or probability is less related contingencies has to be recognized under IAS 37 Provisions, Contingent liab, contingent assets, once grant is recognized 6. Forgivable loan: Means loan with conditions if you fulfill conditions attached to loan, loan will be waived off. It should be treated as GG if there is assurance that entity will meet the conditions of forgiveness, if u don’t fulfill, return back the loan. Accounting treatment: Income approach:  - Grant is credited to P&L over one or more periods, IAS 20 requires using income approach Why to P&L: Grants are earned by complying conditions so costs incurred are compensated with the income earned by way of GG hence it can be recorded in P&L Consider GG received at once as Deferred revenue as it is not incurred Year 1 Dr Bank 40,000 (Asset) Cr Deferred revenue 40,000 (Liab) At the end - decrease liability and increase revenue Dr Deferred revenue 10,000 Cr Revenue 10,000 Grants relating to depreciable asset:  1. Deduct the grant from the asset value and arrive carrying value of asset Dr Asset 7mn, Cr Bank 7mn Grant should be recognized in P&L over the period in which asset is depreciated in proportion to depreciation. Presentation of Grants relating to Assets: Two choices where GG related to assets should be shown in Balance sheet 1. Set up Grant as Deferred income Dr Asset 10mn, Cr Bank 7mn (paid by u), Cr deferred income 3m(GG)(liab) 2. Deduct the grant from the asset value and arrive carrying value of asset Dr Asset 7mn , Cr Bank 7mn Presentation of Grants relating to Income: Method a: Present as a credit separately or under other income Method b: Deduct from related expense Disclosure 1. Accounting policy method, including method of presentation 2. Nature and amount of Grant received, and assistance received. 3. Unfulfilled conditions create provision under IAS 37 or disclosure the issue as there is change in accounting estimate

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Expected Credit Loss (ECL) Model: IFRS 9 introduces an ECL model, which is forward-looking and requires entities to recognize credit losses at each reporting date, even if no actual loss event has occurred. This model applies to financial assets, including trade receivables, lease receivables, and contract assets under IFRS 15. Simplified Approach for Trade Receivables For trade receivables (and some contract assets and lease receivables), IFRS 9 permits a simplified approach to calculate ECL, which simplifies the process of recognizing impairments. Under the simplified approach, companies do not need to track changes in credit risk but can recognize a lifetime ECL from initial recognition. This is usually implemented through a provision matrix, estimating potential losses based on historical data, adjusted for forward-looking information. Provision Matrix for Accounts Receivable: The provision matrix approach segments AR by age (such as current, 30 days past due, 60 days past due, etc.) and applies a specific loss rate to each category. Historical credit loss data is adjusted for factors such as economic changes or industry-specific risks. Companies then estimate the percentage of loss for each category and apply it to their receivables, recording the total amount as a provision. Steps to Apply the Simplified Approach Gather Historical Loss Data: Analyze past data to understand historical losses on receivables. Segment Receivables: Divide AR based on aging categories (e.g., 0–30 days, 31–60 days, etc.). Determine Loss Rates: Adjust historical loss rates based on current economic conditions and forward-looking information. Calculate ECL and Record Provision: Apply the adjusted loss rates to each segment’s outstanding balance to determine the ECL and record the provision. 5. Journal Entries At the reporting date, companies record the ECL as an allowance (or provision) for credit losses on AR: Dr. Bad Debt Expense (P&L) Cr. Allowance for Expected Credit Losses (Balance Sheet) 6. Subsequent Measurement and Updates IFRS 9 requires that the ECL calculation be updated regularly to reflect changes in credit risk. #ECL #IFRS9

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On 14th October 2024, The ICAI issued two new standards whose effective date is yet to be notified. These are - SQM 1, “Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements” - SQM 2, Engagement Quality Reviews These standards aim to strengthen quality management practices within firms and ensure robust engagement quality reviews. Once notified, they will replace the existing SQC 1, which will remain applicable until the effective date of the new standards. SQM-1 deals with a firm’s responsibilities to design, implement and operate a system of quality management for audits or reviews of financial statements or other assurance or related services engagements. SQM-2 deals with the appointment and eligibility of the engagement quality reviewer and the engagement quality reviewer’s responsibilities relating to the performance and documentation of an engagement quality review. On the side, the Public Company Accounting Oversight Board (“PCAOB” or the “Board”) is adopting a new quality control standard, together with other amendments to PCAOB standards, rules, and forms. The existing interim quality control standards, i.e. QC 20, QC 30 and QC 40, will be rescinded on December 15, 2025, and replaced with QC 1000 “A Firm’s System of Quality Control”, and that will - supersede current PCAOB quality control standards with an integrated, risk-based standard, QC 1000 “A Firm’s System of Quality Control”, that would apply to all registered public accounting firms; - create reporting requirements on quality control matters and a new, non-public reporting form, Form QC; - expand the auditor’s responsibility to monitor for and respond to deficiencies on completed engagements under an amended and retitled AS 2901 “Responding to Engagement Deficiencies After Issuance of the Auditor’s Report” and related amendments to attestation standards for broker-dealer engagements. - supersede existing standard ET 102 “Integrity and Objectivity” with a new standard, EI 1000 “Integrity and Objectivity”, to better align our ethics requirements with the scope, approach, and terminology of QC 1000; and However, The National Financial Reporting Authority (NFRA) is understood to have taken strong objections to the Institute of Chartered Accountants of India’s (ICAI) recent revision of a clutch of audit standards, calling it “illegal.” The authority is likely to take the matter up with the government. (Source Financial Express)  #qualitycontrol #SQM #QC1000 #pcaob #icai #nfra

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🌟IFRS 18 - New Standard On Presentation And Disclosure In Financial Statements 2024 🌟 Refine your financial reporting skills with our upcoming webinar on IFRS 18, focusing on the new standards for presentation and disclosure in financial statements. 🔍 What You'll Learn: 1️⃣ Understand the new layout and components of the statement of performance under IFRS 18, designed to enhance transparency and clarity for stakeholders. 2️⃣ Grasp the principles of aggregation and disaggregation critical for precise financial reporting. 3️⃣ Classify operating, investing, and financing activities according to the updated IFRS 18 criteria. 4️⃣ Explore management-defined performance measures and their impact on financial health. 5️⃣ Analyse how IFRS 18 integrates with existing financial reporting standards. 👤 Presenter: Prof Hentie van Wyk 👉 Register Now: https://lnkd.in/db49hmdi 📕 Read more on Accounting Weekly | CIBA: https://lnkd.in/dYPG5HxQ #ifrs18 #financialreporting #professionaldevelopment #transparency

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NO to Prior period expenses all must have learnt in IFRS & Ind AS prior period expenses are not allowed you need to restate previous year/s and adjust opening equity But do we all know, impact & background of such provision if yes, then you have learnt real IFRS / Ind AS (in substance, not just in form) here is tip for same having worked in industry for 30 year of which as CFO/Finance director for 13 years out of that a honest confession - boss / owner / Seth wants to show profits to bring IPO - if auditor is friendly, then do in connivance - if auditor is not, then do secretively - do not record expenses - do not make provisions - postpone dates of signing services received to April - extend quality inspection dates of material received - supplier billing may be march dates, but despatch stamp of receiving bill will be April - convert immediate cost to period nature costs - create approving authority many levels for expense authorisations, leading to approvals in April May or even post audit - claim - non-receipt of branch data (this was very easy in manual days) and what not, post IFRS / Ind AS every CFO is so fed up and scared of postponing expenses and even incomes that utmost precaution is taken to ensure all recordings are done metaculously even auditors find difficult to justify all such reasons and those who know constructive obligations, look for substance of every transactions LEARN IFRS / Ind AS in substance with practical examples of WHAT IT WAS? and WHAT IT IS NOW? Transparency is NAME OF THE GAME Call dimple 9167146714 or WhatsApp me on 9167446744 to learn such 100s of points in substance than ROTE-learning Rammohan Bhave CA CMA CS Limca record holder on IFRS licenced by IFRS® foundation body and Register Learning Partners of ACCA London Shruti Walunj Aditi Patole DEBANJAN CHAKRABARTI Shruti Bendugade Siddhi Gaikar Nimish Patil Teena Chugh Manali Salunkhe Saish K. Prasanna Adhav Janhavi Patil Rohan Chavan Pratiksha Chaudhari @Smita Mukherjee @Manoj Karnik @PRIYA BENNETT

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Major key of IFRS ... Principle-Based Approach: Unlike rule-based accounting systems, IFRS relies on broad principles and objectives rather than specific rules, allowing for professional judgment in financial reporting. Fair Presentation and Compliance: Financial statements must present a true and fair view of an entity’s financial position, performance, and cash flows, and comply with all applicable IFRS standards. Accrual Basis: Financial statements should be prepared using the accrual basis of accounting, meaning that transactions and events are recognized when they occur, not necessarily when cash is received or paid. Going Concern: An entity is assumed to be a going concern and will continue in operation for the foreseeable future, unless there is evidence to the contrary. Materiality and Aggregation: Only information that is material (i.e., could influence the decision of users) needs to be disclosed separately. Immaterial information can be aggregated with similar items. Consistency of Presentation: The presentation and classification of items in the financial statements should be consistent from one period to the next unless a change is justified. Comparative Information: Entities must disclose comparative information for previous periods, which helps users understand trends over time. Revenue Recognition: Revenue is recognized when it is probable that future economic benefits will flow to the entity and these benefits can be measured reliably. The specifics are governed by IFRS 15: Revenue from Contracts with Customers. Financial Instruments: The classification, recognition, and measurement of financial instruments are covered under IFRS 9, which provides guidelines on how to account for financial assets and liabilities. Business Combinations: IFRS 3 covers the accounting for business combinations, requiring that they be accounted for using the acquisition method. Impairment of Assets: IAS 36 prescribes the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amount. Leases: IFRS 16 provides guidelines for lease accounting, requiring lessees to recognize assets and liabilities for most leases on the balance sheet. Disclosure Requirements: Entities are required to disclose information that helps users understand the financial performance, financial position, and changes in financial position. This includes detailed notes and explanations to the financial statements. Segment Reporting: IFRS 8 requires entities to provide information about their different business segments, allowing users to understand the different areas of the business. These key principles ensure that financial statements prepared under IFRS are transparent, comparable, and provide a true and fair view of an entity’s financial performance and position.

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when the auditor is unable to obtain sufficient appropriate audit evidence, and concludes that possible effect on financial statements of undetected misstatement could be MATERIAL and PERVASIVE which type of opinion is ?

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Scope of IAS 36 - Impairment of Assets: IAS 36, Impairment of Assets, establishes principles for ensuring that assets are not carried in the financial statements at amounts exceeding their recoverable amounts. The standard mandates rigorous testing for impairment to prevent overstatement of asset values. Its scope is delineated as follows: Assets Within the Scope of IAS 36: IAS 36 applies to all assets except those explicitly scoped out by the standard. Key asset categories subject to its provisions include: -Property, Plant, and Equipment (accounted for under IAS 16). -Intangible Assets, whether acquired or internally generated (IAS 38). -Investment Property carried under the cost model (IAS 40). -Right-of-Use Assets arising from leases (IFRS 16). -Goodwill arising from business combinations. -Investments in Subsidiaries, Joint Ventures, and Associates, as recognized under IAS 27, IAS 28, and IAS 31. Assets Excluded from IAS 36: IAS 36 explicitly excludes certain assets, for which impairment considerations are governed by other standards. These include: -Inventories (IAS 2), for which lower of cost and net realizable value principles apply. -Deferred Tax Assets (IAS 12), which are tested under tax-specific recoverability rules. -Assets Arising from Employee Benefits (IAS 19). -Financial Assets, including those within the scope of IFRS 9, subject to expected credit loss models. -Investment Property measured at fair value (IAS 40). -Biological Assets related to agricultural activity (IAS 41). -Insurance Contract Assets as per IFRS 4 or IFRS 17. -Non-Current Assets Held for Sale and Discontinued Operations (IFRS 5). Key Objective: IAS 36 enforces a disciplined approach to determining whether the carrying amounts of assets exceed their recoverable amounts, defined as the higher of fair value less costs of disposal and value in use. Any excess carrying amount is recognized as an impairment loss to reflect the economic reality of reduced asset utility or valuation.

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