Tax Management India. Com TMI - Tax Management India. Com
Case Laws Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Manuals Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Provisions, Contingent Liabilities and Contingent Assets

Ind AS - 037 - Rules - B. Indian Accounting Standards (Ind AS) - Companies (Indian Accounting Standards) Rules, 2015 - Ind AS - 037 - Indian Accounting Standard (Ind AS) 37 (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles). Objective The objective of this Standard is to ensure that appropriate recognition criteria and measurement bases are applied to and that sufficient informati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cts under which neither party has performed any of its obligations or both parties have partially performed their obligations to an equal extent. This Standard does not apply to executory contracts unless they are onerous. 4. [Refer Appendix 1] 5[5. When another Standard deals with a specific type of provision, contingent liability or contingent asset, an entity applies that Standard instead of this Standard. For example, some types of provisions are addressed in Standards on: (a) Omitted*; (b) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the scope of Ind AS 104; (f) contingent consideration of an acquirer in a business combination (see Ind AS 103, Business Combinations); and (g) revenue from contracts with customers (see Ind AS 115, Revenue from Contracts with Customers). However, as Ind AS 115 contains no specific requirement to address contracts with customers that are, or have become, onerous, this Standard applies to such cases.] 6[***] 7 This Standard defines provisions as liabilities of uncertain timing or amount. The ter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ns for restructurings (including discontinued operations). When a restructuring meets the definition of a discontinued operation, additional disclosures may be required by Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations. Definitions 10 The following terms are used in this Standard with the meanings specified: A provision is a liability of uncertain timing or amount. A liability is a present obligation of the entity arising from past events, the settlement of which is exp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e: (a) by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities; and (b) as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities. A contingent liability is: (a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. A restructuring is a programme that is planned and controlled by management, and materially changes either: (a) the scope of a business undertaken by an entity; or (b) the manner in which that business is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ived or supplied but have not been paid, invoiced or formally agreed with the supplier, including amounts due to employees (for example, amounts relating to accrued vacation pay). Although it is sometimes necessary to estimate the amount or timing of accruals, the uncertainty is generally much less than for provisions. Accruals are often reported as part of trade and other payables, whereas provisions are reported separately. Relationship between provisions and contingent liabilities 12 In a gen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uishes between: (a) provisions - which are recognised as liabilities (assuming that a reliable estimate can be made) because they are present obligations and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations; and (b) contingent liabilities - which are not recognised as liabilities because they are either: (i) possible obligations, as it has yet to be confirmed whether the entity has a present obligation that could lead to an outflo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

event; (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation. If these conditions are not met, no provision shall be recognised. Present obligation 15 In rare cases, it is not clear whether there is a present obligation. In these cases, a past event is deemed to give rise to a present obligation if, taking account of all available evidence, it is more likely th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for example, the opinion of experts. The evidence considered includes any additional evidence provided by events after the reporting period. On the basis of such evidence: (a) where it is more likely than not that a present obligation exists at the end of the reporting period, the entity recognises a provision (if the recognition criteria are met); and (b) where it is more likely that no present obligation exists at the end of the reporting period, the entity discloses a contingent liability, u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vent (which may be an action of the entity) creates valid expectations in other parties that the entity will discharge the obligation. 18 Financial statements deal with the financial position of an entity at the end of its reporting period and not its possible position in the future. Therefore, no provision is recognised for costs that need to be incurred to operate in the future. The only liabilities recognised in an entity s balance sheet are those that exist at the end of the reporting period .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f an oil installation or a nuclear power station to the extent that the entity is obliged to rectify damage already caused. In contrast, because of commercial pressures or legal requirements, an entity may intend or need to carry out expenditure to operate in a particular way in the future (for example, by fitting smoke filters in a certain type of factory). Because the entity can avoid the future expenditure by its future actions, for example by changing its method of operation, it has no prese .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unless the decision has been communicated before the end of the reporting period to those affected by it in a sufficiently specific manner to raise a valid expectation in them that the entity will discharge its responsibilities. 21 An event that does not give rise to an obligation immediately may do so at a later date, because of changes in the law or because an act (for example, a sufficiently specific public statement) by the entity gives rise to a constructive obligation. For example, when en .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ose of this Standard, such an obligation is treated as a legal obligation. Differences in circumstances surrounding enactment make it impossible to specify a single event that would make the enactment of a law virtually certain. In many cases it will be impossible to be virtually certain of the enactment of a law until it is enacted. Probable outflow of resources embodying economic benefits 23 For a liability to qualify for recognition there must be not only a present obligation but also the pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ic benefits is remote (see paragraph 86). 24 Where there are a number of similar obligations (eg product warranties or similar contracts) the probability that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Although the likelihood of outflow for any one item may be small, it may well be probable that some outflow of resources will be needed to settle the class of obligations as a whole. If that is the case, a provision is recognised (if .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s sufficiently reliable to use in recognising a provision. 26 In the extremely rare case where no reliable estimate can be made, a liability exists that cannot be recognised. That liability is disclosed as a contingent liability (see paragraph 86). Contingent liabilities 27 An entity shall not recognise a contingent liability. 28 A contingent liability is disclosed, as required by paragraph 86, unless the possibility of an outflow of resources embodying economic benefits is remote. 29 Where an e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to determine whether an outflow of resources embodying economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognised in the financial statements of the period in which the change in probability occurs (except in the extremely rare circumstances where no reliable estimate can be made). Contingent assets 31 An entity shall not recognise a contingent a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is not a contingent asset and its recognition is appropriate. 34 A contingent asset is disclosed, as required by paragraph 89, where an inflow of economic benefits is probable. 35 Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognised in the financial statements of the period in which the change .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

period or to transfer it to a third party at that time. It will often be impossible or prohibitively expensive to settle or transfer an obligation at the end of the reporting period. However, the estimate of the amount that an entity would rationally pay to settle or transfer the obligation gives the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. 38 The estimates of outcome and financial effect are determined by the judgement of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

utcomes by their associated probabilities. The name for this statistical method of estimation is expected value . The provision will therefore be different depending on whether the probability of a loss of a given amount is, for example, 60 per cent or 90 per cent. Where there is a continuous range of possible outcomes, and each point in that range is as likely as any other, the mid-point of the range is used. Example An entity sells goods with a warranty under which customers are covered for th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

defects and 5 per cent of the goods sold will have major defects. In accordance with paragraph 24, an entity assesses the probability of an outflow for the warranty obligations as a whole. The expected value of the cost of repairs is: (75% of nil) + (20% of 1m) + (5% of 4m) = ₹ 400,000 40 Where a single obligation is being measured, the individual most likely outcome may be the best estimate of the liability. However, even in such a case, the entity considers other possible outcomes. Wher .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The provision is measured before tax, as the tax consequences of the provision, and changes in it, are dealt with under Ind AS 12. Risks and uncertainties 42 The risks and uncertainties that inevitably surround many events and circumstances shall be taken into account in reaching the best estimate of a provision. 43 Risk describes variability of outcome. A risk adjustment may increase the amount at which a liability is measured. Caution is needed in making judgements under conditions of uncerta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sequent overstatement of a provision. 44 Disclosure of the uncertainties surrounding the amount of the expenditure is made under paragraph 85(b). Present value 45 Where the effect of the time value of money is material, the amount of a provision shall be the present value of the expenditures expected to be required to settle the obligation. 46 Because of the time value of money, provisions relating to cash outflows that arise soon after the reporting period are more onerous than those where cash .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n the amount of a provision where there is sufficient objective evidence that they will occur. 49 Expected future events may be particularly important in measuring provisions. For example, an entity may believe that the cost of cleaning up a site at the end of its life will be reduced by future changes in technology. The amount recognised reflects a reasonable expectation of technically qualified, objective observers, taking account of all available evidence as to the technology that will be ava .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

new legislation is taken into consideration in measuring an existing obligation when sufficient objective evidence exists that the legislation is virtually certain to be enacted. The variety of circumstances that arise in practice makes it impossible to specify a single event that will provide sufficient, objective evidence in every case. Evidence is required both of what legislation will demand and of whether it is virtually certain to be enacted and implemented in due course. In many cases su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

andard dealing with the assets concerned. Reimbursements 53 Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision. 54 In the statement of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t in question so that the entity would have to settle the full amount if the third party failed to pay for any reason. In this situation, a provision is recognised for the full amount of the liability, and a separate asset for the expected reimbursement is recognised when it is virtually certain that reimbursement will be received if the entity settles the liability. 57 In some cases, the entity will not be liable for the costs in question if the third party fails to pay. In such a case the enti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

economic benefits will be required to settle the obligation, the provision shall be reversed. 60 Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as borrowing cost. Use of provisions 61 A provision shall be used only for expenditures for which the provision was originally recognised. 62 Only expenditures that relate to the original provision are set against it. Setting expenditures against a provis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

operation may be impaired. An entity tests these assets for impairment under Ind AS 36, Impairment of Assets. Onerous contracts 66 If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision. 67 Many contracts (for example, some routine purchase orders) can be cancelled without paying compensation to the other party, and therefore there is no obligation. Other contracts establish both rights and obligations for each of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. 69 Before a separate provision for an onerous contract is established, an entity recognises any impairment loss that has occurred on assets dedicated to that contract (see Ind AS 36). Restructuring 70 The following are examples of events that may fall under the definition of restructuring: (a) sale or termination of a line of business; (b) t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

et out how the general recognition criteria apply to restructurings. 72 A constructive obligation to restructure arises only when an entity: (a) has a detailed formal plan for the restructuring identifying at least: (i) the business or part of a business concerned; (ii) the principal locations affected; (iii) the location, function, and approximate number of employees who will be compensated for terminating their services; (iv) the expenditures that will be undertaken; and (v) when the plan will .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ligation to restructure only if it is made in such a way and in sufficient detail (ie setting out the main features of the plan) that it gives rise to valid expectations in other parties such as customers, suppliers and employees (or their representatives) that the entity will carry out the restructuring. 74 For a plan to be sufficient to give rise to a constructive obligation when communicated to those affected by it, its implementation needs to be planned to begin as soon as possible and to be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fore the end of the reporting period does not give rise to a constructive obligation at the end of the reporting period unless the entity has, before the end of the reporting period: (a) started to implement the restructuring plan; or (b) announced the main features of the restructuring plan to those affected by it in a sufficiently specific manner to raise a valid expectation in them that the entity will carry out the restructuring. If an entity starts to implement a restructuring plan, or anno .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mployee representatives for termination payments, or with purchasers for the sale of an operation, may have been concluded subject only to board approval. Once that approval has been obtained and communicated to the other parties, the entity has a constructive obligation to restructure, if the conditions of paragraph 72 are met. 77 In some countries, the ultimate authority is vested in a board whose membership includes representatives of interests other than those of management (eg employees) or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sale until a purchaser has been identified and there is a binding sale agreement. Until there is a binding sale agreement, the entity will be able to change its mind and indeed will have to take another course of action if a purchaser cannot be found on acceptable terms. When the sale of an operation is envisaged as part of a restructuring, the assets of the operation are reviewed for impairment, under Ind AS 36. When a sale is only part of a restructuring, a constructive obligation can arise f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

networks. These expenditures relate to the future conduct of the business and are not liabilities for restructuring at the end of the reporting period. Such expenditures are recognised on the same basis as if they arose independently of a restructuring. 82 Identifiable future operating losses up to the date of a restructuring are not included in a provision, unless they relate to an onerous contract as defined in paragraph 10. 83 As required by paragraph 51, gains on the expected disposal of as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d (e) the increase during the period in the discounted amount arising from the passage of time and the effect of any change in the discount rate. Comparative information is not required. 85 An entity shall disclose the following for each class of provision: (a) a brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits; (b) an indication of the uncertainties about the amount or timing of those outflows. Where necessary to provide ad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

here practicable: (a) an estimate of its financial effect, measured under paragraphs 36-52; (b) an indication of the uncertainties relating to the amount or timing of any outflow; and (c) the possibility of any reimbursement. 87 In determining which provisions or contingent liabilities may be aggregated to form a class, it is necessary to consider whether the nature of the items is sufficiently similar for a single statement about them to fulfil the requirements of paragraphs 85(a) and (b) and 8 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gent liability. 89 Where an inflow of economic benefits is probable, an entity shall disclose a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect, measured using the principles set out for provisions in paragraphs 36-52. 90 It is important that disclosures for contingent assets avoid giving misleading indications of the likelihood of income arising. 91 Where any of the information required by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, together with the fact that, and reason why, the information has not been disclosed. 7[Transitional Provisions 93 * 94 * Effective date 95 * 96 * 97 * 98 * 99 * 100 As a consequence of issuance of Ind AS 115, Revenue from Contracts with Customers, paragraph 5 is amended and paragraph 6 is deleted. An entity shall apply those amendments when it applies Ind AS 115.] 1 The interpretation of probable in this Standard as more likely than not does not necessarily apply in other Indian Accounting Sta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

funds , is to segregate assets to fund some or all of the costs of decommissioning plant (such as a nuclear plant) or certain equipment (such as cars), or in undertaking environmental rehabilitation (such as rectifying pollution of water or restoring mined land), together referred to as decommissioning . 2 Contributions to these funds may be voluntary or required by regulation or law. The funds may have one of the following structures: (a) funds that are established by a single contributor to f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o make additional contributions, for example, in the event of the bankruptcy of another contributor. (c) funds that are established with multiple contributors to fund their individual or joint decommissioning obligations when the required level of contributions is based on the current activity of a contributor and the benefit obtained by that contributor is based on its past activity. In such cases there is a potential mismatch in the amount of contributions made by a contributor (based on curre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the fund s governing documents and any applicable legislation or other regulations. (c) the contributors retain the obligation to pay decommissioning costs. However, contributors are able to obtain reimbursement of decommissioning costs from the fund up to the lower of the decommissioning costs incurred and the contributor s share of assets of the fund. (d) the contributors may have restricted access or no access to any surplus of assets of the fund over those used to meet eligible decommission .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ht to distributions once all the decommissioning has been completed or on winding up the fund, may be an equity instrument within the scope of Ind AS 109 and is not within the scope of this Appendix. Issues 6 The issues addressed in this Appendix are: (a) how should a contributor account for its interest in a fund? (b) when a contributor has an obligation to make additional contributions, for example, in the event of the bankruptcy of another contributor, how should that obligation be accounted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt Arrangements, and Ind AS 28, Investments in Associates and Joint Ventures. If it does, the contributor shall account for its interest in the fund in accordance with those Standards. 9 If a contributor does not have control or joint control of, or significant influence over, the fund, the contributor shall recognise the right to receive reimbursement from the fund as a reimbursement in accordance with Ind AS 37. This reimbursement shall be measured at the lower of: (a) the amount of the decomm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ple, in the event of the bankruptcy of another contributor or if the value of the investment assets held by the fund decreases to an extent that they are insufficient to fulfil the fund s reimbursement obligations, this obligation is a contingent liability that is within the scope of Ind AS 37. The contributor shall recognise a liability only if it is probable that additional contributions will be made. Disclosure 11 A contributor shall disclose the nature of its interest in a fund and any restr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ctrical and Electronic Equipment2 This Appendix is an integral part of the Ind AS. Background 1 Paragraph 17 of Ind AS 37 specifies that an obligating event is a past event that leads to a present obligation that an entity has no realistic alternative to settling. 2 Paragraph 19 of Ind AS 37 states that provisions are recognised only for obligations arising from past events existing independently of an entity s future actions . 3 The European Union s Directive on Waste Electrical and Electronic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e is deemed to give rise to historical waste for the purposes of the Directive. 4 The Directive states that the cost of waste management for historical household equipment should be borne by producers of that type of equipment that are in the market during a period to be specified in the applicable legislation of each Member State (the measurement period). The Directive states that each Member State shall establish a mechanism to have producers contribute to costs proportionately e.g. in proport .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

only the measurement of the liability, which is not within the scope of this Appendix. Scope 6 This Appendix provides guidance on the recognition, in the financial statements of producers, of liabilities for waste management under the EU Directive on WE&EE in respect of sales of historical household equipment. 7 This Appendix addresses neither new waste nor historical waste from sources other than private households. The liability for such waste management is adequately covered in Ind AS 37. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mp;EE what constitutes the obligating event in accordance with paragraph 14(a) of Ind AS 37 for the recognition of a provision for waste management costs: the manufacture or sale of the historical household equipment? participation in the market during the measurement period? the incurrence of costs in the performance of waste management activities? Accounting Principles 9 Participation in the market during the measurement period is the obligating event in accordance with paragraph 14(a) of Ind .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent of the particular period in which the activities to perform the waste management are undertaken and the related costs incurred. Appendix C Levies This Appendix is an integral part of the Ind AS. Background 1. A government may impose a levy on an entity. An issue arises when to recognise a liability to pay a levy that is accounted for in accordance with Ind AS 37, . Scope 2. This Appendix addresses the accounting for a liability to pay a levy if that liability is within the scope of Ind AS 37 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in accordance with legislation (ie laws and/or regulations), other than: (a) those outflows of resources that are within the scope of other Standards (such as income taxes that are within the scope of Ind AS 12, Income Taxes); and (b) fines or other penalties that are imposed for breaches of the legislation. Government refers to government, government agencies and similar bodies whether local, national or international. 5. A payment made by an entity for the acquisition of an asset, or for the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

od create a constructive obligation to pay a levy that will be triggered by operating in that future period? (c) does the going concern assumption imply that an entity has a present obligation to pay a levy that will be triggered by operating in a future period? (d) does the recognition of a liability to pay a levy arise at a point in time or does it, in some circumstances, arise progressively over time? (e) what is the obligating event that gives rise to the recognition of a liability to pay a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d and the calculation of that levy is based on the revenue that was generated in a previous period, the obligating event for that levy is the generation of revenue in the current period. The generation of revenue in the previous period is necessary, but not sufficient, to create a present obligation. 9. An entity does not have a constructive obligation to pay a levy that will be triggered by operating in a future period as a result of the entity being economically compelled to continue to operat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt is the generation of revenue over a period of time, the corresponding liability is recognised as the entity generates that revenue. 12. If an obligation to pay a levy is triggered when a minimum threshold is reached, the accounting for the liability that arises from that obligation shall be consistent with the principles established in paragraphs 8-14 of this Appendix (in particular, paragraphs 8 and 11). For example, if the obligating event is the reaching of a minimum activity threshold (su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d; and (b) shall be recognised if a present obligation to pay the levy exists at the end of the interim reporting period. 14. An entity shall recognise an asset if it has prepaid a levy but does not yet have a present obligation to pay that levy. Appendix D References to matters contained in other Indian Accounting Standards This Appendix is an integral part of the Ind AS. This appendix lists the appendices which are part of other Indian Accounting Standards and makes references to Ind AS 37, . .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Indian Accounting Standard. The purpose of this Appendix is only to bring out the major differences, if any, between Indian Accounting Standard (Ind AS) 37 and the corresponding International Accounting Standard (IAS) 37, , IFRIC 5, Rights to Interests arising from Decommissioning Restoration and Environmental Rehabilitation Funds, IFRIC 6, Liabilities arising from Participating in Specific Market-Waste electrical and Electronic Equipment and IFRIC 21, Levies, issued by the International Acc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g, term balance sheet is used instead of Statement of financial position and Statement of profit and loss is used instead of Statement of comprehensive income . Words approval of the financial statements for issue have been used instead of authorisation of the financial statements for issue in the context of financial statements considered for the purpose of events after the reporting period. 9[3. The following paragraph numbers have been omitted in IAS 37. In order to maintain consistency with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of International Financial Reporting Standards and paragraph related to Effective date are not relevant in Indian context. However, in order to maintain consistency with paragraph numbers of IAS 37, these paragraph numbers are retained in Ind AS 37.] ******************** Notes:- 1. Substituted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 before it was read as, "5 When another Standard deals with a specific type of provision, contingent liability or contingent asset, an entity applies .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is Standard applies to of an insurer, other than those arising from its contractual obligations and rights under insurance contracts within the scope of Ind AS 104; (f) contingent consideration of an acquirer in a business combination (see Ind AS 103, Business Combinations); and (g) revenue from contracts with customers (see Ind AS 115, Revenue from Contracts with Customers). However, as Ind AS 115 contains no specific requirements to address contracts with customers that are, or have become, on .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t) - Dated 30-3-2016 before it was read as, "3 The following paragraph numbers appear as Deleted in IAS 37. In order to maintain consistency with paragraph numbers of IAS 37, the paragraph numbers are retained in Ind AS 37 : (i) paragraph 1(b) (ii) paragraph 4 (iii) paragraph 5(a) (iv) paragraph 6" 5. Substituted vide F. No. 01/01/2009-CL-V(Part VI) - Dated 28-03-2018, w.e.f. 1st day of April, 2018, before it was read as, 1[5. When another Standard deals with a specific type of provisi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 
 


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version