TMI - Tax Management India. Com

Home Acts & Rules Companies Law Rules Companies (Accounting Standards) Rules, 2021 Chapters List Annexure B Accounting Standard (AS) This

  • Login

Forget password       New User/ Regiser



 

AS - 04 - Contingencies and Events Occurring After the Balance Sheet Date - Companies (Accounting Standards) Rules, 2021

Extract

..... ssurance and general insurance enterprises arising from policies issued; (b) obligations under retirement benefit plans; and (c) commitments arising from long-term lease contracts. Definitions 3. The following terms are used in this Standard with the meanings specified: 3.1 A contingency is a condition or situation, the ultimate outcome of which, gain or loss, will be known or determined only on the occurrence, or non-occurrence, of one or more uncertain future events. 3.2 Events occurring after the balance sheet date are those significant events, both favourable and unfavourable, that occur between the balance sheet date and the date on which the financial statements are approved by the Board of Directors in the case of a company, and, by .....

X X   X X   Extracts   X X   X X

Login / Subscribe to Access Full Page

AS - 04 - Contingencies and Events Occurring After the Balance Sheet Date - Companies (Accounting Standards) Rules, 2021

X X   X X   Extracts   X X   X X

..... ities, but in most circumstances, this suggests a level of precision that is not supported by the available information. The possible outcomes can, therefore, usually be generally described except where reasonable quantification is practicable. 4.4 The estimates of the outcome and of the financial effect of contingencies are determined by the judgement of the management of the enterprise. This judgement is based on consideration of information available up to the date on which the financial statements are approved and will include a review of events occurring after the balance sheet date, supplemented by experience of similar transactions and, in some cases, reports from independent experts. 5. Accounting Treatment of Contingent Losses 5.1 .....

X X   X X   Extracts   X X   X X

Login / Subscribe to Access Full Page

AS - 04 - Contingencies and Events Occurring After the Balance Sheet Date - Companies (Accounting Standards) Rules, 2021

X X   X X   Extracts   X X   X X

..... sting at the balance sheet date. 6. Accounting Treatment of Contingent Gains Contingent gains are not recognised in financial statements since their recognition may result in the recognition of revenue which may never be realised. However, when the realisation of a gain is virtually certain, then such gain is not a contingency and accounting for the gain is appropriate. 7. Determination of the Amounts at which Contingencies are included in Financial Statements 7.1 The amount at which a contingency is stated in the financial statements is based on the information which is available at the date on which the financial statements are approved. Events occurring after the balance sheet date that indicate that an asset may have been impaired, or t .....

X X   X X   Extracts   X X   X X

Login / Subscribe to Access Full Page

AS - 04 - Contingencies and Events Occurring After the Balance Sheet Date - Companies (Accounting Standards) Rules, 2021

X X   X X   Extracts   X X   X X

..... may result in a liability or a loss are not identified. Provision for these costs results in their recognition in the same accounting period in which the related transactions took place. 8. Events Occurring after the Balance Sheet Date 8.1 Events which occur between the balance sheet date and the date on which the financial statements are approved, may indicate the need for adjustments to assets and liabilities as at the balance sheet date or may require disclosure. 8.2 Adjustments to assets and liabilities are required for events occurring after the balance sheet date that provide additional information materially affecting the determination of the amounts relating to conditions existing at the balance sheet date. For example, an adjustmen .....

X X   X X   Extracts   X X   X X

Login / Subscribe to Access Full Page

AS - 04 - Contingencies and Events Occurring After the Balance Sheet Date - Companies (Accounting Standards) Rules, 2021

X X   X X   Extracts   X X   X X

..... ists at that time unless a statute requires otherwise. Such dividends are disclosed in the notes. 8.6 Events occurring after the balance sheet date may indicate that the enterprise ceases to be a going concern. A deterioration in operating results and financial position, or unusual changes affecting the existence or substratum of the enterprise after the balance sheet date (e.g., destruction of a major production plant by a fire after the balance sheet date) may indicate a need to consider whether it is proper to use the fundamental accounting assumption of going concern in the preparation of the financial statements. 9. Disclosure 9.1 The disclosure requirements herein referred to apply only in respect of those contingencies or events whic .....

X X   X X   Extracts   X X   X X

Login / Subscribe to Access Full Page

AS - 04 - Contingencies and Events Occurring After the Balance Sheet Date - Companies (Accounting Standards) Rules, 2021

X X   X X   Extracts   X X   X X

..... vidence to assist the estimation of amounts relating to conditions existing at the balance sheet date or that indicate that the fundamental accounting assumption of going concern (i.e., the continuance of existence or substratum of the enterprise) is not appropriate. 14. If an enterprise declares dividends to shareholders after the balance sheet date, the enterprise should not recognise those dividends as a liability at the balance sheet date unless a statute requires otherwise. Such dividends should be disclosed in notes. 15. Disclosure should be made in the report of the approving authority of those events occurring after the balance sheet date that represent material changes and commitments affecting the financial position of the enterpr .....

X X   X X   Extracts   X X   X X

Login / Subscribe to Access Full Page

AS - 04 - Contingencies and Events Occurring After the Balance Sheet Date - Companies (Accounting Standards) Rules, 2021

X X   X X   Extracts   X X   X X