Page 3 - 33. FR RTP NOV. 22

Ind AS 37 Paragraph 68A has been inserted which clarifies which cost needs to be considered
―Provisions, in the costs to fulfil a contract while determining whether the contract as onerous.
Contingent As per the amendment made in 2022, both the incremental costs to fulfil a
Liabilities and contract and allocation of directly attributable costs will form part of the cost used
Contingent Assets‖ for determination of onerous contract.
Para 69 has been amended by replacing ―assets dedicated to the contract‖ to
―assets used in fulfilling the contract‖. This amendment requires to take into
consideration the impairment loss on all the assets whose cost will be considered
in assessing the contract as onerous.
These amendments are prospective from 1st April, 2022 with cumulative effect
recognised in the opening balance of retained earnings or other component of
equity, as appropriate on 1st April, 2022. Comparative period financials not to be
restated.

Ind AS 103 In March, 2018, IASB revised Conceptual Framework for Financial Reporting.
―Business Accordingly, ICAI in August, 2020 came out with the revised Conceptual Framework
Combinations‖ for Financial Reporting (the Conceptual Framework) under Ind AS.
The amendments made in Ind AS 103 is due to change in reference to Conceptual
Framework without change in the accounting requirements for business
combinations.
Due to revision in the Conceptual Framework, there were certain accounting
implications to contingent liabilities and levies within the scope of Ind AS 37 and
Appendix C ―Levies‖.
As per it, the assets and liabilities in a business combination are recognised if they
meet the definition of an asset or liability as per

Ind AS Significant amendment made in 2022
the Conceptual Framework. The timing of recognition of a levy may
sometimes be different due to specific guidance given in Appendix C.
Therefore, while recognizing levies at the acquisition date, an acquirer might
recognise at the acquisition date a liability to pay a levy that it would not
recognise subsequently when applying Appendix C ―Levies‖. This difference
would arise because an entity might recognise a liability earlier by applying
the Conceptual Framework. This liability would be derecognized immediately
afterwards when principles of Appendix C are applied, and the entity would
recognise a so-called Day 2 gain.
Therefore, to resolve this implication, Ind AS 103 has been amended with
regards to recognition exception for contingent liabilities and levies by
inserting para 21A to 21C. An exception has been added to the requirements
of para 11 of Ind AS 103 for liabilities and contingent liabilities that would
be within the scope of Ind AS 37 or Appendix C if incurred separately,
rather than assumed in a business combination.
Further, Ind AS 103 prohibited the recognition of contingent assets even
prior to the 2022 amendments. However, prohibition was not stated
explicitly in Ind AS 103 itself. Therefore, para 23A has been inserted in Ind
AS 103 to explicitly prohibit recognition of contingent asset.
Ind AS 101 ―First Para D13 of Ind AS 101 provides an exemption to a first -time adopter of Ind
time adoption of AS with regard to cumulative translation differences on the date of

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