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TMI BlogCompanies (Indian Accounting Standards) Amendment Rules, 2021.X X X X Extracts X X X X X X X X Extracts X X X X ..... ments (paragraphs B8-B8C); ; (ii) for heading before paragraph B8, the following shall be substituted, namely:- Classification and measurement of financial instruments ; (B) in Indian Accounting Standard (Ind AS) 102 , - (i) after paragraph 63D, the following shall be inserted, namely:- 63E Amendments to References to the Conceptual Framework in Ind AS issued in 2021 amended the footnote to the definition of an equity instrument in Appendix A. An entity shall apply that amendment for annual periods beginning on or after 1 April, 2021. An entity shall apply the amendment to Ind AS 102 retrospectively, in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors. However, if an entity determines that retrospective application would be impracticable or would involve undue cost or effort, it shall apply the amendment to Ind AS 102 by reference to paragraphs 23 28, 50 53 and 54F of Ind AS 8. ; (ii) in Appendix A, for the footnote relating to equity instrument , the following shall be substituted, namely:- * The Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual Framework) issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsive income, rather than profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts Standard is issued; and give companies whose activities are predominantly connected with insurance an optional temporary exemption from applying IFRS 9 until 2023. The above optional temporary exemptions have not been provided under Ind AS 104. In the context of optional temporary exemptions from applying IFRS 9, paragraphs 3 and 5 have been amended and paragraphs 20A-20Q, 35A-35N, 39B-39M, 46-49 have been added in IFRS 4. Since temporary optional exemptions have not been provided under Ind AS 104, these paragraphs have not been included in Ind AS 104. However, paragraph numbers have been retained in Ind AS 104 to maintain consistency with IFRS 4. Amendments to Interest Rate Benchmark Reform-Phase 2 added paragraphs 20R-20S in IFRS 4 which prescribes that an insurer applying the temporary exemption from IFRS 9 shall read certain paragraph references of IAS 39 in place of paragraph references of IFRS 9. Since temporary optional exemptions have not been provided under Ind AS 104, these paragraphs have not been included in Ind AS 104. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responding to IFRS 1, First-time Adoption of International Financial Reporting Standards. ; (G) in Indian Accounting Standard (Ind AS) 107 , - (i) in paragraph 24G, in item (c), for the words, figures, brackets and letter paragraph 6.7.4(b) of Ind AS 109 , the words, figures and letters paragraph 6.7.4 of Ind AS 109 shall be substituted.; (ii) after paragraph 24H, the following shall be inserted, namely:- Additional disclosures related to interest rate benchmark reform 24I To enable users of financial statements to understand the effect of interest rate benchmark reform on an entity s financial instruments and risk management strategy, an entity shall disclose information about: (a) the nature and extent of risks to which the entity is exposed arising from financial instruments subject to interest rate benchmark reform, and how the entity manages these risks; and (b) the entity s progress in completing the transition to alternative benchmark rates, and how the entity is managing the transition. 24J To meet the objectives in paragraph 24I, an entity shall disclose: (a) how the entity is managing the transition to alternative benchmark rates, its p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounting Standard (Ind AS) 109 , - (i) after paragraph 5.4.4, the following shall be inserted, namely:- Changes in the basis for determining the contractual cash flows as a result of interest rate benchmark reform 5.4.5 An entity shall apply paragraphs 5.4.6‒5.4.9 to a financial asset or financial liability if, and only if, the basis for determining the contractual cash flows of that financial asset or financial liability changes as a result of interest rate benchmark reform. For this purpose, the term ‗interest rate benchmark reform refers to the market-wide reform of an interest rate benchmark as described in paragraph 6.8.2. 5.4.6 The basis for determining the contractual cash flows of a financial asset or financial liability can change: (a) by amending the contractual terms specified at the initial recognition of the financial instrument (for example, the contractual terms are amended to replace the referenced interest rate benchmark with an alternative benchmark rate); (b) in a way that was not considered by-or contemplated in-the contractual terms at the initial recognition of the financial instrument, without amending the contractual terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph 5.4.7 to the changes required by interest rate benchmark reform. The entity shall then apply the applicable requirements in this Standard to any additional changes to which the practical expedient does not apply. If the additional change does not result in the derecognition of the financial asset or financial liability, the entity shall apply paragraph 5.4.3 or paragraph B5.4.6, as applicable, to account for that additional change. If the additional change results in the derecognition of the financial asset or financial liability, the entity shall apply the derecognition requirements. ; (ii) in paragraph 5.5.8, the words impairment gain or loss , shall be in italics; (iii) in paragraph 6.5.10, the words effective interest rate , shall be in italics; (iv) after paragraph 6.8.12, the following shall be inserted, namely:- 6.8.13 An entity shall prospectively cease applying paragraphs 6.8.7 and 6.8.8 at the earlier of: (a) when changes required by interest rate benchmark reform are made to the non-contractually specified risk component applying paragraph 6.9.1; or (b) when the hedging relationship in which the non-contractually specified risk component is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed item or hedging instrument. For the avoidance of doubt, such an amendment to the formal designation of a hedging relationship constitutes neither the discontinuation of the hedging relationship nor the designation of a new hedging relationship. 6.9.5 If changes are made in addition to those changes required by interest rate benchmark reform to the financial asset or financial liability designated in a hedging relationship (as described in paragraphs 5.4.6 5.4.8) or to the designation of the hedging relationship (as required by paragraph 6.9.1), an entity shall first apply the applicable requirements in this Standard to determine if those additional changes result in the discontinuation of hedge accounting. If the additional changes do not result in the discontinuation of hedge accounting, an entity shall amend the formal designation of the hedging relationship as specified in paragraph 6.9.1. 6.9.6 Paragraphs 6.9.7 6.9.13 provide exceptions to the requirements specified in those paragraphs only. An entity shall apply all other hedge accounting requirements in this Standard, including the qualifying criteria in paragraph 6.4.1, to hedging relationships that were directly af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hedging relationship in its entirety. An entity also shall apply the requirements in paragraphs 6.5.8 and 6.5.11 to account for ineffectiveness related to the hedging relationship in its entirety. Designation of risk components 6.9.11 An alternative benchmark rate designated as a non-contractually specified risk component that is not separately identifiable (see paragraphs 6.3.7(a) and B6.3.8) at the date it is designated shall be deemed to have met that requirement at that date, if, and only if, the entity reasonably expects the alternative benchmark rate will be separately identifiable within 24 months. The 24-month period applies to each alternative benchmark rate separately and starts from the date the entity designates the alternative benchmark rate as a non-contractually specified risk component for the first time (ie the 24-month period applies on a rate-by-rate basis). 6.9.12 If subsequently an entity reasonably expects that the alternative benchmark rate will not be separately identifiable within 24 months from the date the entity designated it as a non-contractually specified risk component for the first time, the entity shall cease applying the requirement i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty reinstates a discontinued hedging relationship, the entity shall read references in paragraphs 6.9.11 and 6.9.12 to the date the alternative benchmark rate is designated as a non-contractually specified risk component for the first time as referring to the date of initial application of these amendments (ie the 24-month period for that alternative benchmark rate designated as a non-contractually specified risk component begins from the date of initial application of these amendments). 7.2.46 An entity is not required to restate prior periods to reflect the application of these amendments. The entity may restate prior periods if, and only if, it is possible without the use of hindsight. If an entity does not restate prior periods, the entity shall recognise any difference between the previous carrying amount and the carrying amount at the beginning of the annual reporting period that includes the date of initial application of these amendments in the opening retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application of these amendments. ; (vii) in Appendix A,- (a) for the heading effecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision-making needs of users and no less reliable**, or more reliable and no less relevant to those needs. An entity shall judge relevance and reliability using the criteria in paragraph 10 of Ind AS 8. (K) in Indian Accounting Standard (Ind AS) 115 ,- (i) in Appendix D, after paragraph 27, the following shall be inserted, namely;- Effective date 28 [Refer Appendix 1] 28A-28C [Refer Appendix 1] 28D Ind AS 115 amended paragraphs 13 15, 18 20 and 27 of Appendix D (which was earlier notified as Appendix A of erstwhile Ind AS 11). An entity shall apply those amendments when it applies Ind AS 115. 28E [Refer Appendix 1] 28F Ind AS 116, amended paragraph AG8. An entity shall apply that amendment when it applies Ind AS 116. ; (ii) in Appendix 1,- (a) in paragraph 6, (i) for the opening paragraph, the following shall be substituted, namely:- 6. Paragraphs C1B, C8A and C9 of Appendix C and paragraphs 28 and 28E of Appendix D related to effective date and transition have been deleted due to following reasons: ; (ii) after item (b), the following shall be inserted, namely:- (c) Paragraphs 28 and 28E of Appendix D are not relevant in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) after paragraph C1A, the following shall be inserted, namely:- C1B Interest Rate Benchmark Reform-Phase 2, which amended Ind AS 109, Ind AS 107, Ind AS 104 and Ind AS 116, added paragraphs 104 106 and C20C C20D. An entity shall apply these amendments for annual reporting periods beginning on or after the 1 st April 2021. C1C Covid-19-Related Rent Concessions beyond 30 June 2021, amended paragraph 46B and added paragraphs C20BA C20BC. A lessee shall apply that amendment for annual reporting periods beginning on or after the 1st April 2021. In case a lessee has not yet approved the financial statements for issue before the issuance of this amendment, then the same may be applied for annual reporting periods beginning on or after April 1, 2020. ; (b) after paragraph C20B, the following shall be inserted, namely:- C20BA A lessee shall apply Covid-19-Related Rent Concessions beyond 30 June 2021 (see paragraph C1C) retrospectively, recognising the cumulative effect of initially applying that amendment as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the annual reporting period in which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ework shall be substituted; (vi) in paragraph 28, for the word Framework , the words Conceptual Framework shall be substituted; (vii) in paragraph 89, for the word Framework s , the words Conceptual Framework s shall be substituted; (viii) in paragraph 95, for the words hedged forecast cash flow affect , the words hedged forecast cash flows affect shall be substituted; (ix) for paragraph 139S, the following shall be substituted, namely:- 139S Amendments to References to the Conceptual Framework in Ind AS issued in 2021, amended paragraphs 15, 19 20, 23 24, 28 and 89. An entity shall apply those amendments for annual periods beginning on or after the 1st April, 2021. An entity shall apply the amendments to Ind AS 1 retrospectively in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors. However, if an entity determines that retrospective application would be impracticable or would involve undue cost or effort, it shall apply the amendments to Ind AS 1 by reference to paragraphs 23 28, 50 53 and 54F of Ind AS 8. ; (x) in Appendix 1,for paragraph 10, the following shall be substituted, namely:- 10 Paragraphs 139 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appendix 1,for paragraph 5, the following shall be substituted, namely:- 5. Paragraphs 54-54E of IAS 8 related to Effective date and transition have not been included in Ind AS 8 as these are not relevant in Indian context. However, in order to maintain consistency with paragraph numbers of IAS 8, these paragraph numbers are retained in Ind AS 8. ; (O) in Indian Accounting Standard (Ind AS) 12 , in paragraph 29, in sub-item (i) of item (a), for the word and symbol differences. appearing at the end of second sentence, the words and symbol and differences; and shall be substituted; (P) in Indian Accounting Standard (Ind AS) 16 , in paragraph 6, for the words Recoverable amount is the higher of an asset s fair value less costs to sell and its value in use . , the words Recoverable amount is the higher of an asset s fair value less costs of disposal and its value in use . shall be substituted; (Q) in Indian Accounting Standard (Ind AS) 27 , in paragraph 15, for the words and figures paragraphs 16 and 17 , the word and figures paragraphs 16-17 shall be substituted; (R) in Indian Accounting Standard (Ind AS) 28 , in paragraph 42, for the words co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m liability , after the word liability , the symbol * with corresponding following footnote shall be inserted, namely:- * The definition of a liability in this Standard is not revised following the revision of the definition of a liability in the Conceptual Framework for Financial Reporting under Indian Accounting Standards issued in 2021 by the Institute of Chartered Accountants of India. ; (U) in Indian Accounting Standard (Ind AS) 38 , - (i) in paragraph 8, in the definition of the term Asset , after the word Asset , the symbol * with corresponding following footnote shall be inserted, namely:- * The definition of an asset in this Standard is not revised following the revision of the definition of an asset in the Conceptual Framework for Financial Reporting under Indian Accounting Standards issued in 2021 by the Institute of Chartered Accountants of India. ; (ii) in paragraph 114, for the words, letters and figure Ind AS 115, Revenue from Contracts with Customers , the word, letters and figure Ind AS 115 shall be substituted; (iii) in Appendix A,- (a) for paragraph 5, the following shall be substituted, namely:- 5 This Appendix does not ap ..... 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