Ind AS 1 - Presentation of Financial Statements: in recent years - Finance Ppl

**************************************** Calender container- CSS BEGINS *******************************************/ **************************************** Email Subscription- CSS BEGINS *******************************************/ #mc_embed_signup{ .widget iframe, .widget img { max-width: 100%; } #mc_embed_signup{ img { max-width: 100%; vertical-align: middle; border: 0; } #magazine-left { width: 45%; float: left; } #magazine-right { width: 45%; float: right; } } **************************************** Slider Img- CSS BEGINS *******************************************/ **************************************** Scroll- CSS BEGINS *******************************************/ --> /**************************************** HOW NO SIDEBARS-in POST PAGES- CSS BEGINS *******************************************/ /**************************************** SHOW NO SIDEBARS-in CONTACT PAGE- CSS BEGINS *******************************************/ /**************************************** SHOW NO SIDEBARS-in quick run page- CSS BEGINS *******************************************/ /***************************************************** SHOW NO HEADING/TITLE in PROFILE Menu PAGES- CSS BEGINS *****************************************************/ /*************************************************** SERVICES PAGE -CSS BEGINS *****************************************************/ /******************************************** PROFILE PAGE- PADDING - CSS STARTS ****************************************/ /**************************************** SHOW NO SIDEBARS-in INTERVIEW HELPER- CSS BEGINS *******************************************/ /**************************************** SHOW NO SIDEBARS-in ONLINE CLASSES ENROLLMENT FORM- CSS BEGINS *******************************************/ / **************************************** RESOURCES- CSS BEGINS *******************************************/ /*-------TYPOGRAPHY AND SHORTCODES BEGINS--------*/ /*------TYPOGRAPHY AND SHORT CODES ENDS------*/ /******************************************** TEMPLATE SKIN BEGINS ****************************************/ /******************************************** TEMPLATE SKIN ENDS ***************************************************/ /*=============================GOOGLE ANALYTICS JAVA SCRIPT BEGINS==================================*/ //]]> /*=============================GOOGLE ANALYTICS JAVA SCRIPT ENDS==================================*/ /*************************************** HEAD OF THE TEMPLATE BEGINS ******************************************/

Ind AS 1 - Presentation of Financial Statements: in recent years

Following are the amendments w.r.t Ind AS 1 – Presentation of Financial Statements, in last few years

  1. General Clarification on classification of liabilities as current or non-current: ( applicable to all liabilities)
  2. Specific treatment for non-current liabilities with covenants: Is specific rule for liabilities subject to covenants.
  3. Shift from “significant accounting policies disclosure to material accounting policy information disclosure.
Lets look into the details

    Amendment listed as 1 and 2 here are two separate but related amendments dealing with classification and third one deals with disclosure.

  1. Clarification on liability Classification:

    Old rule before amendment: Basically, liabilities were classified as C or NC based on whether they were due within next 12 months. But the guidance was unclear, about how to treat situations where entity has rights to defer settlement or when refinancing arrangements existed.

    New rule:   The amendment clarified that liabilities should be classified as current or non‑current based on whether the entity has right at the reporting date to defer settlement for at least 12 months. Meaning, if a liability is due within 12 months but the entity has the right at the reporting date to defer settlement for at least 12 months, then the liability is classified as non‑current.

  2. Treatment of Non-current liabilities with covenants:

    Old rule:  Did not specify how to treat covenant conditions or breaches of covenants when classifying liabilities. Meaning, If a covenant was breached at the reporting date, companies treated the liability as current (since the lender could demand repayment).
    But para 73 of Ind AS-1 allowed a liability to remain non‑current if the lender gave a waiver or grace period after the reporting date but before approval of financial statements.

    New rule: Amendment provides that, Covenants that must be complied with, on or before the reporting date, affect classification. So, Breaches at the reporting date make the liability current, regardless of waivers obtained later.
    Covenants tested after the reporting date doesn’t change classification, but they require disclosure of risk.

  3. Shift from significant accounting policies to material accounting policy information:

    Old rule:  Significant accounting policies
    Companies often disclosed all policies they considered notable or significant as far as the company is concerned, even if they weren’t truly relevant to user/reader of the financial statements. This led to long, page full note.

    New rule :   Material accounting policy information
    Now, disclosure is required only if the policy is material. What is material? Material info means, if omitting or misstating it could reasonably influence the decisions of users of the financial statements.