Government alters the rules concerning to Indian Accounting Standards

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The government has changed the rules and regulations concerning numerous Indian Accounting Standards (Ind AS).  It involves those connected to interest rate benchmark reform. The Indian Accounting Standards (Ind AS) are intersected with the International Financial Reporting Standards (IFRS). The main thing in the amended rules are organizations that need to prepare further disclosures associated with interest rate benchmark reform. Because  these permit the end-users of financial statements to realise the effect of interest

That is the institutions must reveal the type and length of main threats and risks to which they are showing arising from those financial instruments subject to interest rate benchmark reform, and how the institutions will cope up with these risks. The Ministry of Corporate Affairs informed the companies (Indian Accounting Standards) Rules, 2021 on the last day. And these alterations have been made after negotiations with the National Financial Reporting Authority (NFRA).

The Partner & National Leader of Financial Accounting Advisory Services (FAAS), Sandip Khetan at EY India, told that the ministry has provided the second phase alterations to interest rate benchmark reform and as a result of this creates changes to Ind AS 109, Ind AS 107, Ind AS 104 and Ind AS 116. In the revised rules, the institutions are required to disclose more related to interest rates benchmarks for easy understanding about the changes of interests among the users of financial instruments.

In the Phase 2 amendments, he pointed out that it initiates the new extents of judgement and organisations are required to ensure that they have suitable accounting policies and governance in place. And for the extra negotiations, organizations must assure that they can meet and attend compliant information. Organizations must reveal the nature and length of risks from financial instruments subjected to interest rate benchmark reform, and how the institutions will manage it. 

Amid others, there are amends in the basis for deciding the contractual cash flows consequently interest rate benchmark reform. Prateek Agarwal, Partner at Nangia & Co LLP, notified that these will help the users of financial statements to understand the effect of these alterations. That means the rate of the organization’s progress in finishing the changes to other benchmark rates.

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