Page 2 - 33. FR RTP NOV. 22
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PAPER –1: FINANCIAL REPORTING PART – I
Amendments applicable from November, 2022 examination
Companies (Indian Accounting Standards) (Amendment) Rules, 2022
MCA has issued Companies (Indian Accounting Standards) (Amendment) Rules, 2022 to amend Companies
(Indian Accounting Standards) Rules, 2015 vide notification G.S.R. 255(E) dated 23rd March, 2022. These
amendments are generally brought by MCA to keep uniformity between Ind AS and IFRS. However, this time
MCA has come out with a carve out in Ind AS 16. These amendments come into effect from 1st April, 2022
and is applicable for the financial year 2022-2023 onwards for the financial statements prepared on the basis
of Ind AS. Following are the areas in which the amendments have been brought in by the MCA through this
notification:
Amendment to Ind AS 16 ―Property, Plant and Equipment‖ on accounting of proceeds from selling of items
produced during testing and carve out in this regard from IAS 16 .
Amendment to Ind AS 37 ―Provisions, Contingent Liabilities and Contingent Assets‖ on determination of
cost of fulfilling a contract for measurement of provision for an onerous contract.
Amendments to Ind AS 103 ―Business Combinations‖ with reference to Conceptual Framework for Financial
Reporting and insertion of certain paragraphs under exceptions to recognition principle on liabilities,
contingent liabilities and contingent assets
Annual improvements to Ind AS (2021) in Ind AS 101 ―First Time Adoption of Indian Accounting
Standards‖, Ind AS 109 ―Financial Instruments‖ and Ind AS 41 ―Agriculture‖.
The key amendments to Ind AS pursuant to the Companies (Indian Accounting Standards) (Amendments)
Rules, 2022 are explained below:
Ind AS Significant amendment made in 2022
Ind AS 16, ―Property, Para 17(e) of Ind AS 16 has been amended by adding a clarification
Plant and Equipment‖ that the excess of net proceeds from sale of items produced during
testing will not be credited to Profit or loss i.e. it will be deducted
from the cost of an item of property, plant and equipment.
Ind AS Significant amendment made in 2022
However, amendment made in IAS 16 by IASB prohibited deduction of proceeds of
items produced during testing from cost of an item of property, plant and
equipment.
This differential treatment in IAS 16 and Ind AS 16 has led to a carve out, which
will have consequential impact on depreciation, impairment and deferred tax.
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