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NOTICE INVITING COMMENTS ON THE DRAFT COMPANIES (INDIAN ACCOUNTING STANDARDS) AMENDMENT RULES 2016

News and Press Release - Dated:- 17-2-2016 - GOVERNMENT OF INDIA Ministry of Corporate Affairs Dated the 16th February, 2016 1. The draft Companies (Indian Accounting Standards) Amendment Rules, 2016 has been placed on the Ministry s website at www.mca.gov.in. It has been decided to invite suggestions/comments on the above draft. 3. Suggestions/comments on above mentioned draft along with justification in brief may be sent latest by 1st March, 2016 through email at cindas@mca.gov.in. It is reque .....

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Companies Act, 1956 (1 of 1956), the Central Government, in consultation with the National Advisory Committee on Accounting Standards, hereby makes the following rules, namely:- 1. Short title and commencement.-(1) These rules may be called the Companies (Indian Accounting Standards) (Amendment) Rules, 2016. (2) These rules shall come into force on the date of their publication in the Official Gazette. 2. In the Companies (Indian Accounting Standards) Rules, 2015 (hereinafter referred to as the .....

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e into force from accounting periods commencing on or after 1st April, 2018. Until the aforesaid Ind AS comes into force, the following Indian Accounting Standards (Ind AS) contained in Annexure A to these Rules shall be used by the companies to which the Ind AS are applicable for the concerned periods: (i) Indian Accounting Standard (Ind AS) 11, Construction Contacts. (ii) Indian Accounting Standard (Ind AS) 18, Revenue. 11. Consequent to the amendment specified as per Rule 2 sub rule 10 above, .....

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be substituted by the following to the extent indicated: 10(e) notes, comprising significant accounting policies and other explanatory information; 31 Some Ind ASs specify information that is required to be included in the financial statements, which include the notes. An entity need not provide a specific disclosure required by an Ind AS if the information resulting from that disclosure is not material except when required by law. This is the case even if the Ind AS contains a list of specific .....

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ent additional line items (including by disaggregating the line items listed in paragraph 54), headings and subtotals in the balance sheet when such presentation is relevant to an understanding of the entity s financial position. 82A The other comprehensive income section shall present line items for the amounts for the period of: (a) items of other comprehensive income (excluding amounts in paragraph (b)), classified by nature and grouped into those that, in accordance with other Ind ASs: (i) w .....

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85 An entity shall present additional line items (including by disaggregating the line items listed in paragraph 82), headings and subtotals in the statement of profit and loss, when such presentation is relevant to an understanding of the entity s financial performance. 113 An entity shall present notes in a systematic manner. In determining a systematic manner, the entity shall consider the effect on the understandability and comparability of its financial statements. An entity shall cross-re .....

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(b) grouping together information about items measured similarly such as assets measured at fair value; or (c) following the order of the line items in the statement of profit and loss and the balance sheet, such as: (i) statement of compliance with Ind ASs (see paragraph 16); (ii) significant accounting policies applied (see paragraph 117); (iii) supporting information for items presented in the balance sheet and in the statement of profit and loss, and in the statements of changes in equity a .....

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statements; and (b) the other accounting policies used that are relevant to an understanding of the financial statements. 119 In deciding whether a particular accounting policy should be disclosed, management considers whether disclosure would assist users in understanding how transactions, other events and conditions are reflected in reported financial performance and financial position. Each entity considers the nature of its operations and the policies that the users of its financial statemen .....

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ment between different policies they allow. For example, Ind AS 16 requires disclosure of the measurement bases used for classes of property, plant and equipment. 120 [Refer Appendix 1] 122 An entity shall disclose, along with its significant accounting policies or other notes, the judgements, apart from those involving estimations (see paragraph 125), that management has made in the process of applying the entity s accounting policies and that have the most significant effect on the amounts rec .....

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nt natures or functions. 55A When an entity presents subtotals in accordance with paragraph 55, those subtotals shall: (a) be comprised of line items made up of amounts recognised and measured in accordance with Ind AS; (b) be presented and labelled in a manner that makes the line items that constitute the subtotal clear and understandable; (c) be consistent from period to period, in accordance with paragraph 45; and (d) not be displayed with more prominence than the subtotals and totals require .....

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ls required in Ind AS for the statement of profit and loss. 85B An entity shall present the line items in the statement of profit and loss that reconcile any subtotals presented in accordance with paragraph 85 with the subtotals or totals required in Ind AS for such statement. 3. Paragraph 6 of Appendix 1 shall be substituted by the following: 6. Following paragraph numbers appear as Deleted in IAS 1. In order to maintain consistency with paragraph numbers of IAS 1, the paragraph numbers are ret .....

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ent bonds. However, for currencies other than Indian rupee for which there is deep market in high quality corporate bonds, the market yields (at the end of the reporting period) on such high quality corporate bonds denominated in that currency shall be used. The currency and term of the government bonds or corporate bonds shall be consistent with the currency and estimated term of the post-employment benefit obligations. [ 2. Paragraph 2 of Appendix 1 shall be substituted by the following: 2 Acc .....

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tures 1. Paragraphs 17(d), 27and 36 shall be substituted by the following: 17(d) The ultimate or any intermediate parent of the entity produces financial statements available for public use that comply with Ind ASs, in which subsidiaries are consolidated or are measured at fair value through profit or loss in accordance with Ind AS 110. 27 A group s share in an associate or a joint venture is the aggregate of the holdings in that associate or joint venture by the parent and its subsidiaries. The .....

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and joint ventures), after any adjustments necessary to give effect to uniform accounting policies (see paragraphs 35-36A). 36 Except as described in paragraph 36A, if an associate or a joint venture uses accounting policies other than those of the entity for like transactions and events in similar circumstances, adjustments shall be made to make the associate s or joint venture s accounting policies conform to those of the entity when the associate s or joint venture s financial statements are .....

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ries. Ind AS 34, Interim Financial Reporting 1. Paragraphs 5(e) and 16A shall be substituted by the following to the extent indicated: 5(e) notes, comprising significant accounting policies and other explanatory information; 16A In addition to disclosing significant events and transactions in accordance with paragraphs 15-15C, an entity shall include the following information, in the notes to its interim financial statements or elsewhere in the interim financial report. The following disclosures .....

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al report is incomplete. The information shall normally be reported on a financial year-to-date basis. (a) .... Ind AS 101, First-time Adoption of Indian Accounting Standards 1. Paragraph 30 shall be substituted by the following: 30 If an entity uses fair value in its opening Ind AS Balance Sheet as deemed cost for an item of property, plant and equipment or an intangible asset (see paragraphs D5 and D7), the entity s first Ind AS financial statements shall disclose, for each line item in the op .....

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the existence of an active market). An entity shall not use these elections for other assets or for liabilities. 3. Following paragraph 13 in Appendix 1, shall be added: 13. IAS 40, Investment Property permits both cost model and fair value model (except in some situations) for measurement of investment properties after initial recognition. Ind AS 40, Investment Property permits only the cost model. As a consequence, paragraph 30 is amended and paragraph D7 (a) is deleted. Ind AS 105, Non-curren .....

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sposal group) as held for sale or held for distribution to owners (respectively). In such cases an entity shall follow the guidance in paragraphs 27-29 to account for this change except when paragraph 26A applies. 27 The entity shall measure a non-current asset (or disposal group) that ceases to be classified as held for sale or as held for distribution to owners (or ceases to be included in a disposal group classified as held for sale or as held for distribution to owners) at the lower of: (a) .....

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nt of a non-current asset that ceases to be classified as held for sale or as held for distribution to owners in profit or loss6 from continuing operations in the period in which the criteria in paragraphs 7-9 or 12A, respectively, are no longer met. Financial statements for the periods since classification as held for sale or as held for distribution to owners shall be amended accordingly if the disposal group or non-current asset that ceases to be classified as held for sale or as held for dis .....

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ld shall continue to be measured as a group only if the group meets the criteria in paragraphs 7-9. If an entity removes an individual asset or liability from a disposal group classified as held for distribution to owners, the remaining assets and liabilities of the disposal group to be distributed shall continue to be measured as a group only if the group meets the criteria in paragraph 12A. Otherwise, the remaining non-current assets of the group that individually meet the criteria to be class .....

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to owners in accordance with paragraph 26. 2. Following paragraph 26A shall be added: 26A If an entity reclassifies an asset (or disposal group) directly from being held for sale to being held for distribution to owners, or directly from being held for distribution to owners to being held for sale, then the change in classification is considered a continuation of the original plan of disposal. The entity: (a) shall not follow the guidance in paragraphs 27-29 to account for this change. The entit .....

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e requirements in paragraphs 20-25. (c) shall not change the date of classification in accordance with paragraphs 8 and 12A. This does not preclude an extension of the period required to complete a sale or a distribution to owners if the conditions in paragraph 9 are met. Ind AS 107, Financial Instruments: Disclosures 1. Paragraph 21 shall be substituted by the following: 21 In accordance with paragraph 117 of Ind AS 1, Presentation of Financial Statements, an entity discloses its significant ac .....

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anding of the financial statements. For financial instruments, such disclosure may include: (a)-(g) ..... Paragraph 122 of Ind AS 1 also requires entities to disclose, along with its significant accounting policies or other notes, the judgements, apart from those involving estimations, that management has made in the process of applying the entity s accounting policies and that have the most significant effect on the amounts recognised in the financial statements. B30 An entity does not have a c .....

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stances to make payments in respect of the transferred financial asset in the future. The term payment in this context does not include cash flows of the transferred financial asset that an entity collects and is required to remit to the transferee. 3. In Appendix B, following paragraph B30A shall be added: B30A When an entity transfers a financial asset, the entity may retain the right to service that financial asset for a fee that is included in, for example, a servicing contract. The entity a .....

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larly, a servicer has continuing involvement for the purposes of the disclosure requirements if a fixed fee would not be paid in full because of non-performance of the transferred financial asset. In these examples, the servicer has an interest in the future performance of the transferred financial asset. This assessment is independent of whether the fee to be received is expected to compensate the entity adequately for performing the servicing. Ind AS 110, Consolidated Financial Statements 1. P .....

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investment entity and whose main purpose and activities are providing services that relate to the investment entity s investment activities (see paragraphs B85C-B85E), it shall consolidate that subsidiary in accordance with paragraphs 19-26 of this Ind AS and apply the requirements of Ind AS 103 to the acquisition of any such subsidiary. 2. Following paragraphs 4A-4B shall be added: 4A This Ind AS does not apply to post-employment benefit plans or other long-term employee benefit plans to which .....

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administrative services), either directly or through a subsidiary, to third parties as well as to its investors, even if those activities are substantial to the entity, subject to the entity continuing to meet the definition of an investment entity. B85E If an investment entity has a subsidiary that is not itself an investment entity and whose main purpose and activities are providing investment-related services or activities that relate to the investment entity s investment activities, such as .....

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n order to maintain consistency with paragraph numbers of IFRS 10, the paragraph numbers are retained in Ind AS 110: Paragraph 4(b) (ii) Paragraph 4(c) Ind AS 112, Disclosure of Interests in Other Entities 1. Paragraph 6(b) shall be substituted by the following: 6(b) an entity s separate financial statements to which Ind AS 27, Separate Financial Statements, applies. However: (i) if an entity has interests in unconsolidated structured entities and prepares separate financial statements as its on .....

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dian 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 prescribe the accounting treatment of revenue and costs associated with construction contracts. Because of the nature of the activity undertaken in construction contracts, the date at which the contract activity is entered into and the date when the activity is completed usually fall into di .....

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and expenses in the statement of profit and loss. It also provides practical guidance on the application of these criteria. Scope 1. This Standard shall be applied in accounting for construction contracts in the financial statements of contractors. 1A The impairment of any contractual right to receive cash or another financial asset arising from this Standard shall be dealt in accordance with Ind AS 109, Financial Instruments. 2. [Refer Appendix 1] Definitions 3. The following terms are used in .....

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A cost plus contract is a construction contract in which the contractor is reimbursed for allowable or otherwise defined costs, plus a percentage of these costs or a fixed fee. 4. A construction contract may be negotiated for the construction of a single asset such as a bridge, building, dam, pipeline, road, ship or tunnel. A construction contract may also deal with the construction of a number of assets which are closely interrelated or interdependent in terms of their design, technology and fu .....

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he environment following the demolition of assets. 6. Construction contracts are formulated in a number of ways which, for the purposes of this Standard, are classified as fixed price contracts and cost plus contracts. Some construction contracts may contain characteristics of both a fixed price contract and a cost plus contract, for example in the case of a cost plus contract with an agreed maximum price. In such circumstances, a contractor needs to consider all the conditions in paragraphs 23 .....

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mber of assets, the construction of each asset shall be treated as a separate construction contract when: (a) separate proposals have been submitted for each asset; (b) each asset has been subject to separate negotiation and the contractor and customer have been able to accept or reject that part of the contract relating to each asset; and (c) the costs and revenues of each asset can be identified. 9. A group of contracts, whether with a single customer or with several customers, shall be treate .....

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the additional asset shall be treated as a separate construction contract when: (a) the asset differs significantly in design, technology or function from the asset or assets covered by the original contract; or (b) the price of the asset is negotiated without regard to the original contract price. Contract revenue 11. Contract revenue shall comprise: (a) the initial amount of revenue agreed in the contract; and (b) variations in contract work, claims and incentive payments: (i) to the extent t .....

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he next. For example: (a) a contractor and a customer may agree variations or claims that increase or decrease contract revenue in a period subsequent to that in which the contract was initially agreed; (b) the amount of revenue agreed in a fixed price contract may increase as a result of cost escalation clauses; (c) the amount of contract revenue may decrease as a result of penalties arising from delays caused by the contractor in the completion of the contract; or (d) when a fixed price contra .....

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hat the customer will approve the variation and the amount of revenue arising from the variation; and (b) the amount of revenue can be reliably measured. 14. A claim is an amount that the contractor seeks to collect from the customer or another party as reimbursement for costs not included in the contract price. A claim may arise from, for example, customer caused delays, errors in specifications or design, and disputed variations in contract work. The measurement of the amounts of revenue arisi .....

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eded. For example, a contract may allow for an incentive payment to the contractor for early completion of the contract. Incentive payments are included in contract revenue when: (a) the contract is sufficiently advanced that it is probable that the specified performance standards will be met or exceeded; and (b) the amount of the incentive payment can be measured reliably. Contract costs 16. Contract costs shall comprise: (a) costs that relate directly to the specific contract; (b) costs that a .....

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sts of hiring plant and equipment; (f) costs of design and technical assistance that is directly related to the contract; (g) the estimated costs of rectification and guarantee work, including expected warranty costs; and (h) claims from third parties. These costs may be reduced by any incidental income that is not included in contract revenue, for example income from the sale of surplus materials and the disposal of plant and equipment at the end of the contract. 18. Costs that may be attributa .....

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reparation and processing of construction personnel payroll. Costs that may be attributable to contract activity in general and can be allocated to specific contracts also include borrowing costs. 19. Costs that are specifically chargeable to the customer under the terms of the contract may include some general administration costs and development costs for which reimbursement is specified in the terms of the contract. 20. Costs that cannot be attributed to contract activity or cannot be allocat .....

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tract to the final completion of the contract. However, costs that relate directly to a contract and are incurred in securing the contract are also included as part of the contract costs if they can be separately identified and measured reliably and it is probable that the contract will be obtained. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs when the contract is obtained in a subsequent .....

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case of a fixed price contract, the outcome of a construction contract can be estimated reliably when all the following conditions are satisfied: (a) total contract revenue can be measured reliably; (b) it is probable that the economic benefits associated with the contract will flow to the entity; (c) both the contract costs to complete the contract and the stage of contract completion at the end of the reporting period can be measured reliably; and (d) the contract costs attributable to the co .....

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identified and measured reliably. 25. The recognition of revenue and expenses by reference to the stage of completion of a contract is often referred to as the percentage of completion method. Under this method, contract revenue is matched with the contract costs incurred in reaching the stage of completion, resulting in the reporting of revenue, expenses and profit which can be attributed to the proportion of work completed. This method provides useful information on the extent of contract act .....

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ance with paragraph 36. 27. A contractor may have incurred contract costs that relate to future activity on the contract. Such contract costs are recognised as an asset provided it is probable that they will be recovered. Such costs represent an amount due from the customer and are often classified as contract work in progress. 28. The outcome of a construction contract can only be estimated reliably when it is probable that the economic benefits associated with the contract will flow to the ent .....

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ng the asset to be constructed; (b) the consideration to be exchanged; and (c) the manner and terms of settlement. It is also usually necessary for the entity to have an effective internal financial budgeting and reporting system. The entity reviews and, when necessary, revises the estimates of contract revenue and contract costs as the contract progresses. The need for such revisions does not necessarily indicate that the outcome of the contract cannot be estimated reliably. 30. The stage of co .....

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erformed. 31. When the stage of completion is determined by reference to the contract costs incurred to date, only those contract costs that reflect work performed are included in costs incurred to date. Examples of contract costs which are excluded are: (a) contract costs that relate to future activity on the contract, such as costs of materials that have been delivered to a contract site or set aside for use in a contract but not yet installed, used or applied during contract performance, unle .....

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be recognised as an expense immediately in accordance with paragraph 36. 33. During the early stages of a contract it is often the case that the outcome of the contract cannot be estimated reliably. Nevertheless, it may be probable that the entity will recover the contract costs incurred. Therefore, contract revenue is recognised only to the extent of costs incurred that are expected to be recoverable. As the outcome of the contract cannot be estimated reliably, no profit is recognised. However, .....

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sts incurred may not be probable and in which contract costs may need to be recognised as an expense immediately include contracts: (a) that are not fully enforceable, ie their validity is seriously in question; (b) the completion of which is subject to the outcome of pending litigation or legislation; (c) relating to properties that are likely to be condemned or expropriated; (d) where the customer is unable to meet its obligations; or (e) where the contractor is unable to complete the contract .....

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diately. 37. The amount of such a loss is determined irrespective of: (a) whether work has commenced on the contract; (b) the stage of completion of contract activity; or (c) the amount of profits expected to arise on other contracts which are not treated as a single construction contract in accordance with paragraph 9. Changes in estimates 38. The percentage of completion method is applied on a cumulative basis in each accounting period to the current estimates of contract revenue and contract .....

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39. An entity shall disclose: (a) the amount of contract revenue recognised as revenue in the period; (b) the methods used to determine the contract revenue recognised in the period; and (c) the methods used to determine the stage of completion of contracts in progress. 40. An entity shall disclose each of the following for contracts in progress at the end of the reporting period: (a) the aggregate amount of costs incurred and recognised profits (less recognised losses) to date; (b) the amount o .....

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ross amount due from customers for contract work as an asset; and (b) the gross amount due to customers for contract work as a liability. 43. The gross amount due from customers for contract work is the net amount of: (a) costs incurred plus recognised profits; less (b) the sum of recognised losses and progress billings for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceeds progress billings. 44. The gross amount due to customers for contr .....

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warranty costs, claims, penalties or possible losses. Appendix A Service Concession Arrangements This Appendix is an integral part of Indian Accounting Standard (Ind AS) Background 1 Infrastructure for public services-such as roads, bridges, tunnels, prisons, hospitals, airports, water distribution facilities, energy supply and telecommunication networks-has traditionally been constructed, operated and maintained by the public sector and financed through public budget appropriation. 2 In recent .....

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increasing its capacity) and operating and maintaining that infrastructure for a specified period of time. The operator is paid for its services over the period of the arrangement. The arrangement is governed by a contract that sets out performance standards, mechanisms for adjusting prices, and arrangements for arbitrating disputes. Such an arrangement is often described as a build-operate-transfer , a rehabilitate-operate-transfer or a publicto-private service concession arrangement. 3 A feat .....

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is a public sector entity, including a governmental body, or a private sector entity to which the responsibility for the service has been devolved. (b) the operator is responsible for at least some of the management of the infrastructure and related services and does not merely act as an agent on behalf of the grantor. (c) the contract sets the initial prices to be levied by the operator and regulates price revisions over the period of the service arrangement. (d) the operator is obliged to hand .....

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tructure, to whom it must provide them, and at what price; and (b) the grantor controls-through ownership, beneficial entitlement or otherwise- any significant residual interest in the infrastructure at the end of the term of the arrangement. 6. Infrastructure used in a public-to-private service concession arrangement for its entire useful life (whole of life assets) is within the scope of this Appendix if the conditions in paragraph 5(a) of this Appendix are met. Paragraphs AG1-AG8 of the Appli .....

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ccounting for infrastructure that was held and recognised as property, plant and equipment by the operator before entering the service arrangement. The derecognition requirements of Indian Accounting Standards (as set out in Ind AS 16 ) apply to such infrastructure. 9 This Appendix does not specify the accounting by grantors. Issues 10 This Appendix sets out general principles on recognising and measuring the obligations and related rights in service concession arrangements. Requirements for dis .....

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Accounting Principles Treatment of the operator s rights over the infrastructure 11 Infrastructure within the scope of this Appendix shall not be recognised as property, plant and equipment of the operator because the contractual service arrangement does not convey the right to control the use of the public service infrastructure to the operator. The operator has access to operate the infrastructure to provide the public service on behalf of the grantor in accordance with the terms specified in .....

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nd AS 18 for the services it performs. If the operator performs more than one service (ie construction or upgrade services and operation services) under a single contract or arrangement, consideration received or receivable shall be allocated by reference to the relative fair values of the services delivered, when the amounts are separately identifiable. The nature of the consideration determines its subsequent accounting treatment. The subsequent accounting for consideration received as a finan .....

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asset, or (b) an intangible asset. 16 The operator shall recognise a financial asset to the extent that it has an unconditional contractual right to receive cash or another financial asset from or at the direction of the grantor for the construction services; the grantor has little, if any, discretion to avoid payment, usually because the agreement is enforceable by law. The operator has an unconditional right to receive cash if the grantor contractually guarantees to pay the operator (a) speci .....

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ight to receive cash because the amounts are contingent on the extent that the public uses the service. 18 If the operator is paid for the construction services partly by a financial asset and partly by an intangible asset it is necessary to account separately for each component of the operator s consideration. The consideration received or receivable for both components shall be recognised initially at the fair value of the consideration received or receivable. 19 The nature of the consideratio .....

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cified level of serviceability or (b) to restore the infrastructure to a specified condition before it is handed over to the grantor at the end of the service arrangement. These contractual obligations to maintain or restore infrastructure, except for any upgrade element (see paragraph 14 of this Appendix), shall be recognised and measured in accordance with Ind AS 37, ie at the best estimate of the expenditure that would be required to settle the present obligation at the end of the reporting p .....

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al asset 23 Ind AS 32, Ind AS 107 and Ind AS 109 apply to the financial asset recognised under paragraphs 16 and 18 of this Appendix. 24 The amount due from or at the direction of the grantor is accounted for in accordance with Ind AS 109 at: (a) amortised cost; (b) fair value through other comprehensive income; or (c) fair value through profit or loss. 25 If the amount due from the grantor is measured at amortised cost or fair value through other comprehensive income, Ind AS 109 requires intere .....

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e items to which the operator is given access by the grantor for the purposes of the service arrangement are not recognised as property, plant and equipment of the operator. The grantor may also provide other items to the operator that the operator can keep or deal with as it wishes. If such assets form part of the consideration payable by the grantor for the services, they are not government grants as defined in Ind AS 20. They are recognised as assets of the operator, measured at fair value on .....

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ructure, to whom it must provide them, and at what price; and (b) the grantor controls-through ownership, beneficial entitlement or otherwise-any significant residual interest in the infrastructure at the end of the term of the arrangement. AG2 The control or regulation referred to in condition (a) could be by contract or otherwise (such as through a regulator), and includes circumstances in which the grantor buys all of the output as well as those in which some or all of the output is bought by .....

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egulator, for example by a capping mechanism. However, the condition shall be applied to the substance of the agreement. Non-substantive features, such as a cap that will apply only in remote circumstances, shall be ignored. Conversely, if for example, a contract purports to give the operator freedom to set prices, but any excess profit is returned to the grantor, the operator s return is capped and the price element of the control test is met. AG4 For the purpose of condition (b), the grantor s .....

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retains both the degree of control described in paragraph 5(a) of Appendix A and any significant residual interest in the infrastructure, the operator is only managing the infrastructure on the grantor s behalf-even though, in many cases, it may have wide managerial discretion. AG6 Conditions (a) and (b) together identify when the infrastructure, including any replacements required (see paragraph 21 of Appendix A), is controlled by the grantor for the whole of its economic life. For example, if .....

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aragraph 5(a) of Appendix A and partly unregulated. However, these arrangements take a variety of forms: (a) any infrastructure that is physically separable and capable of being operated independently and meets the definition of a cash-generating unit as defined in Ind AS 36 shall be analysed separately if it is used wholly for unregulated purposes. For example, this might apply to a private wing of a hospital, where the remainder of the hospital is used by the grantor to treat public patients. .....

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ovide ancillary unregulated services described in paragraph AG7 (b). In either case, there may in substance be a lease from the grantor to the operator; if so, it shall be accounted for in accordance with Ind AS 17. Information note 2 References to Indian Accounting Standards that apply to typical types of public-to-private arrangements This note accompanies, but is not part of, Appendix A. The table sets out the typical types of arrangements for private sector participation in the provision of .....

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rvice and/or maintenance contract (specific tasks eg debt collection) Rehabilitate - operate - transfer Build - operate - transfer Build - own - operate 100% Divestment/ Privatisation/ Corporation Asset ownership Grantor Operator Capital investment Grantor Operator Demand risk Shared Grantor Operator and/or Grantor Operator Typical duration 8-20 years 1-5 years 25-30 years Indefinite (or may be limited by licence) Residual interest Grantor Operator Relevant Indian Accounting Standards Ind AS 17 .....

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treatment and supply facilities, motorways, car parks, tunnels, bridges, airports and telecommunication networks. Examples of arrangements that are not service concession arrangements include an entity outsourcing the operation of its internal services (eg employee cafeteria, building maintenance, and accounting or information technology functions). 2. A service concession arrangement generally involves the grantor conveying for the period of the concession to the operator: (a) the right to prov .....

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concession period. 3. The common characteristic of all service concession arrangements is that the operator both receives a right and incurs an obligation to provide public services. 4. The issue is what information should be disclosed in the notes in the financial statements of an operator and a grantor. 5. Certain aspects and disclosures relating to some service concession arrangements are addressed by Indian Accounting Standards (eg Ind AS 16 applies to acquisitions of items of property, pla .....

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in determining the appropriate disclosures in the notes. An operator and a grantor shall disclose the following in each period: (a) a description of the arrangement; (b) significant terms of the arrangement that may affect the amount, timing and certainty of future cash flows (eg the period of the concession, re-pricing dates and the basis upon which re-pricing or re-negotiation is determined); (c) the nature and extent (eg quantity, time period or amount as appropriate) of: (i) rights to use s .....

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all disclose the amount of revenue and profits or losses recognized in the period on exchanging construction services for a financial asset or an intangible asset. 7 The disclosures required in accordance with paragraph 6 of this Appendix shall be provided individually for each service concession arrangement or in aggregate for each class of service concession arrangements. A class is a grouping of service concession arrangements involving services of a similar nature (eg toll collections, telec .....

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unting Standard. The purpose of this Appendix is only to bring out the differences, if any, between Indian Accounting Standard (Ind AS) 11 and the corresponding International Accounting Standard (IAS) 11, Construction Contracts, IFRIC 12, Service Concession Arrangements and SIC 29, Service Concession Arrangements: Disclosures Comparison with IAS 11, Construction Contracts, IFRIC 12, Service Concession Arrangements and SIC 29, Service Concession Arrangements: Disclosures 1. The transitional provi .....

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d of Statement of comprehensive income . 3. Paragraph 2 of IAS 11 which states that IAS 11 supersedes the earlier version of IAS 11 is deleted in Ind AS 11 as this is not relevant in Ind AS 11. However, paragraph number 2 is retained in Ind AS 11 to maintain consistency with paragraph numbers of IAS 11. Indian Accounting Standard (Ind AS) 18 Revenue (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate t .....

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es in the course of ordinary activities of an entity and is referred to by a variety of different names including sales, fees, interest, dividends and royalties. The objective of this Standard is to prescribe the accounting treatment of revenue arising from certain types of transactions and events. The primary issue in accounting for revenue is determining when to recognise revenue. Revenue is recognised when it is probable that future economic benefits will flow to the entity and these benefits .....

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recognition of interest. However, the following are dealt in accordance with Ind AS 109, Financial Instruments: (a) measurement of interest charges for the use of cash or cash equivalents or amounts due to the entity; and (b) recognition and measurement of dividend. 1B The impairment of any contractual right to receive cash or another financial asset arising from this Standard shall be dealt in accordance with Ind AS 109, Financial Instruments. 2 [Refer Appendix 1] 3 Goods includes goods produce .....

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services of project managers and architects. Revenue arising from these contracts is not dealt with in this Standard but is dealt with in accordance with the requirements for construction contracts as specified in Ind AS 11 Construction Contracts. 5 The use by others of entity assets gives rise to revenue in the form of: (a) interest-charges for the use of cash or cash equivalents or amounts due to the entity; (b) royalties-charges for the use of long-term assets of the entity, for example, pat .....

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Insurance Contracts; (d) changes in the fair value of financial assets and financial liabilities or their disposal (see Ind AS 109 Financial Instruments); (e) changes in the value of other current assets; (f) initial recognition and from changes in the fair value of biological assets related to agricultural activity (see Ind AS 41 Agriculture); (g) initial recognition of agricultural produce (see Ind AS 41); and (h) the extraction of mineral ores. Definitions 7 The following terms are used in th .....

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rement) 8 Revenue includes only the gross inflows of economic benefits received and receivable by the entity on its own account. Amounts collected on behalf of third parties such as sales taxes, goods and services taxes and value added taxes are not economic benefits which flow to the entity and do not result in increases in equity. Therefore, they are excluded from revenue. Similarly, in an agency relationship, the gross inflows of economic benefits include amounts collected on behalf of the pr .....

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or receivable taking into account the amount of any trade discounts and volume rebates allowed by the entity. 11 In most cases, the consideration is in the form of cash or cash equivalents and the amount of revenue is the amount of cash or cash equivalents received or receivable. However, when the inflow of cash or cash equivalents is deferred, the fair value of the consideration may be less than the nominal amount of cash received or receivable. For example, an entity may provide interest-free .....

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b) a rate of interest that discounts the nominal amount of the instrument to the current cash sales price of the goods or services. The difference between the fair value and the nominal amount of the consideration is recognised as interest revenue in accordance with Ind AS 109. 12 When goods or services are exchanged or swapped for goods or services which are of a similar nature and value, the exchange is not regarded as a transaction which generates revenue. This is often the case with commodit .....

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ived cannot be measured reliably, the revenue is measured at the fair value of the goods or services given up, adjusted by the amount of any cash or cash equivalents transferred. Identification of the transaction 13 The recognition criteria in this Standard are usually applied separately to each transaction. However, in certain circumstances, it is necessary to apply the recognition criteria to the separately identifiable components of a single transaction in order to reflect the substance of th .....

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t the same time, enter into a separate agreement to repurchase the goods at a later date, thus negating the substantive effect of the transaction; in such a case, the two transactions are dealt with together. Sale of goods 14 Revenue from the sale of goods shall be recognised when all the following conditions have been satisfied: (a) the entity has transferred to the buyer the significant risks and rewards of ownership of the goods; (b) the entity retains neither continuing managerial involvemen .....

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ances of the transaction. In most cases, the transfer of the risks and rewards of ownership coincides with the transfer of the legal title or the passing of possession to the buyer. This is the case for most retail sales. In other cases, the transfer of risks and rewards of ownership occurs at a different time from the transfer of legal title or the passing of possession. 16 If the entity retains significant risks of ownership, the transaction is not a sale and revenue is not recognised. An enti .....

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llation is a significant part of the contract which has not yet been completed by the entity; and (d) when the buyer has the right to rescind the purchase for a reason specified in the sales contract and the entity is uncertain about the probability of return. 17 If an entity retains only an insignificant risk of ownership, the transaction is a sale and revenue is recognised. For example, a seller may retain the legal title to the goods solely to protect the collectability of the amount due. In .....

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nt factors. 18 Revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the entity. In some cases, this may not be probable until the consideration is received or until an uncertainty is removed. For example, it may be uncertain that a foreign governmental authority will grant permission to remit the consideration from a sale in a foreign country. When the permission is granted, the uncertainty is removed and revenue is recognised. Ho .....

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uding warranties and other costs to be incurred after the shipment of the goods can normally be measured reliably when the other conditions for the recognition of revenue have been satisfied. However, revenue cannot be recognised when the expenses cannot be measured reliably; in such circumstances, any consideration already received for the sale of the goods is recognised as a liability. Rendering of services 20 When the outcome of a transaction involving the rendering of services can be estimat .....

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g period can be measured reliably; and (d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.3 21 The recognition of revenue by reference to the stage of completion of a transaction is often referred to as the percentage of completion method. Under this method, revenue is recognised in the accounting periods in which the services are rendered. The recognition of revenue on this basis provides useful information on the extent of service acti .....

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in revenue, the uncollectible amount, or the amount in respect of which recovery has ceased to be probable, is recognised as an expense, rather than as an adjustment of the amount of revenue originally recognised. 23 An entity is generally able to make reliable estimates after it has agreed to the following with the other parties to the transaction: (a) each party s enforceable rights regarding the service to be provided and received by the parties; (b) the consideration to be exchanged; and (c .....

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asures reliably the services performed. Depending on the nature of the transaction, the methods may include: (a) surveys of work performed; (b) services performed to date as a percentage of total services to be performed; or (c) the proportion that costs incurred to date bear to the estimated total costs of the transaction. Only costs that reflect services performed to date are included in costs incurred to date. Only costs that reflect services performed or to be performed are included in the e .....

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cognition of revenue is postponed until the significant act is executed. 26 When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable. 27 During the early stages of a transaction, it is often the case that the outcome of the transaction cannot be estimated reliably. Nevertheless, it may be probable that the entity will recover the transaction costs incurred. .....

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longer exist, revenue is recognised in accordance with paragraph 20 rather than in accordance with paragraph 26. Interest and Royalties 29 Revenue arising from the use by others of entity assets yielding interest and royalties shall be recognised on the bases set out in paragraph 30 when: (a) it is probable that the economic benefits associated with the transaction will flow to the entity; and (b) the amount of the revenue can be measured reliably. 30 Revenue shall be recognised on the followin .....

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enue on some other systematic and rational basis. 34 Revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow to the entity. However, when an uncertainty arises about the collectibility of an amount already included in revenue, the uncollectible amount, or the amount in respect of which recovery has ceased to be probable, is recognised as an expense, rather than as an adjustment of the amount of revenue originally recognised. Disclosure .....

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nges of goods or services included in each significant category of revenue. 36 An entity discloses any contingent liabilities and contingent assets in accordance with Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets. Contingent liabilities and contingent assets may arise from items such as warranty costs, claims, penalties or possible losses. Appendix A Revenue-Barter Transactions Involving Advertising Services Issue 1 An entity (Seller) may enter into a barter transaction to .....

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ising services in the course of its ordinary activities recognises revenue under Ind AS 18 from a barter transaction involving advertising when, amongst other criteria, the services exchanged are dissimilar (paragraph 12 of Ind AS 18) and the amount of revenue can be measured reliably (paragraph 20(a) of Ind AS 18.This Appendix only applies to an exchange of dissimilar advertising services. An exchange of similar advertising services is not a transaction that generates revenue under Ind AS 18. 4 .....

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that: (a) involve advertising similar to the advertising in the barter transaction; (b) occur frequently; (c) represent a predominant number of transactions and amount when compared to all transactions to provide advertising that is similar to the advertising in the barter transaction; (d) involve cash and/or another form of consideration (eg marketable securities, nonmonetary assets, and other services) that has a reliably measurable fair value; and (e) do not involve the same counterparty as i .....

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cified minimum number or value of award credits before they are able to redeem them. Award credits may be linked to individual purchases or groups of purchases, or to continued custom over a specified period. The entity may operate the customer loyalty programme itself or participate in a programme operated by a third party. The awards offered may include goods or services supplied by the entity itself and/or rights to claim goods or services from a third party. Scope 3 This Appendix applies to .....

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obligation to provide free or discounted goods or services ( awards ) in the future should be recognised and measured by: (i) allocating some of the consideration received or receivable from the sales transaction to the award credits and deferring the recognition of revenue (applying paragraph 13 of Ind AS 18); or (ii) providing for the estimated future costs of supplying the awards (applying paragraph 19 of Ind AS 18); and (b) if consideration is allocated to the award credits: (i) how much sho .....

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the other components of the sale. 6 The consideration allocated to the award credits shall be measured by reference to their fair value. 7 If the entity supplies the awards itself, it shall recognise the consideration allocated to award credits as revenue when award credits are redeemed and it fulfils its obligations to supply awards. The amount of revenue recognised shall be based on the number of award credits that have been redeemed in exchange for awards, relative to the total number expect .....

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d to the award credits and the amount payable to the third party for supplying the awards; and (ii) recognise this net amount as revenue when the third party becomes obliged to supply the awards and entitled to receive consideration for doing so. These events may occur as soon as the award credits are granted. Alternatively, if the customer can choose to claim awards from either the entity or a third party, these events may occur only when the customer chooses to claim awards from the third part .....

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ot yet been recognised as revenue plus any further consideration receivable when the customer redeems the award credits), the entity has onerous contracts. A liability shall be recognised for the excess in accordance with Ind AS 37. The need to recognise such a liability could arise if the expected costs of supplying awards increase, for example if the entity revises its expectations about the number of award credits that will be redeemed. Application guidance on Appendix B This application guid .....

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f the award credits takes into account, as appropriate: (a) the amount of the discounts or incentives that would otherwise be offered to customers who have not earned award credits from an initial sale; (b) the proportion of award credits that are not expected to be redeemed by customers; and (c) non-performance risk. If customers can choose from a range of different awards, the fair value of the award credits reflects the fair values of the range of available awards, weighted in proportion to t .....

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ph 6 of Appendix B and is most appropriate in the circumstances. Appendix C Transfers of Assets from Customers Background 1 In the utilities industry, an entity may receive from its customers items of property, plant and equipment that must be used to connect those customers to a network and provide them with ongoing access to a supply of commodities such as electricity, gas or water. Alternatively, an entity may receive cash from customers for the acquisition or construction of such items of pr .....

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cess to the supply of goods or services and will be the recipient of those goods or services. However, for convenience this Appendix refers to the entity transferring the asset as the customer. Scope 4 This Appendix applies to the accounting for transfers of items of property, plant and equipment by entities that receive such transfers from their customers. 5 Agreements within the scope of this Appendix are agreements in which an entity receives from a customer an item of property, plant and equ .....

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ovide the customer with ongoing access to a supply of goods or services, or to do both. 7 This Appendix does not apply to agreements in which the transfer is either a government grant as defined in Ind AS 20 or infrastructure used in a service concession arrangement that is within the scope of Appendix A of Ind AS 11 Service Concession Arrangements. Issues 8 The Appendix addresses the following issues: (a) Is the definition of an asset met? (b) If the definition of an asset is met, how should th .....

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sferred item meets the definition of an asset set out in the Framework for the Preparation and Presentation of Financial Statements issued by the Institute of Chartered Accountants of India. Paragraph 49(a) of the Framework states that an asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. In most circumstances, the entity obtains the right of ownership of the transferred item of property, plant and e .....

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hold it, or distribute it to owners. The entity that receives from a customer a transfer of an item of property, plant and equipment shall consider all relevant facts and circumstances when assessing control of the transferred item. For example, although the entity must use the transferred item of property, plant and equipment to provide one or more services to the customer, it may have the ability to decide how the transferred item of property, plant and equipment is operated and maintained and .....

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e in accordance with paragraph 24 of that Standard. How should the credit be accounted for? 12 The following discussion assumes that the entity receiving an item of property, plant and equipment has concluded that the transferred item should be recognised and measured in accordance with paragraphs 9-11. 13 Paragraph 12 of Ind AS 18 states that When goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is regarded as a transaction which generates reven .....

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the customer with ongoing access to a supply of goods or services, or both. In accordance with paragraph 13 of Ind AS 18, the entity shall identify the separately identifiable services included in the agreement. 15 Features that indicate that connecting the customer to a network is a separately identifiable service include: (a) a service connection is delivered to the customer and represents stand-alone value for that customer; (b) the fair value of the service connection can be measured reliabl .....

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services arises from the terms of the entity s operating licence or other regulation rather than from the agreement relating to the transfer of an item of property, plant and equipment is that customers that make a transfer pay the same price as those that do not for the ongoing access, or for the goods or services, or for both. Revenue recognition 18 If only one service is identified, the entity shall recognise revenue when the service is performed in accordance with paragraph 20 of Ind AS 18. .....

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l be recognised for that service is generally determined by the terms of the agreement with the customer. If the agreement does not specify a period, the revenue shall be recognised over a period no longer than the useful life of the transferred asset used to provide the ongoing service. How should the entity account for a transfer of cash from its customer? 21 When an entity receives a transfer of cash from a customer, it shall assess whether the agreement is within the scope of this Appendix i .....

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atters contained in other Indian Accounting Standards This Appendix is an integral part of Indian Accounting Standard 18. This appendix lists the appendices which are part of other Indian Accounting Standards and make reference to Ind AS 18, Revenues 1. Appendix A, Service Concession Arrangements contained in Ind AS 11 Construction Contracts. 2. Appendix B, Evaluating the Substance of Transactions Involving the Legal Form of a Lease contained in Ind AS 17 Leases. Appendix 1 Note: This appendix i .....

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n in IAS 18, SIC 13 and IFRIC 13 have not been given in Ind AS 18, since all transitional provisions related to Ind ASs, wherever considered appropriate have been included in Ind AS 101, First-time Adoption of Indian Accounting Standards corresponding to IFRS 1, First-time Adoption of International Financial Reporting Standards. 2. On the basis of principles of the IAS 18, IFRIC 15 on Agreement for Construction of Real Estate prescribes that construction of real estate should be treated as sale .....

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leted in Ind AS 18 as this is not relevant in Ind AS 18. However, paragraph number 2 is retained in Ind AS 18 to maintain consistency with paragraph numbers of IAS 18. 4. Paragraph number 31 appear as Deleted in IAS 18. In order to maintain consistency with paragraph numbers of IAS 18, the paragraph number is retained in Ind AS 18. 5. Paragraph 30(c), 32, 35 b(iii), 35b(v) appear as Deleted in Ind AS 18 which addresses revenue in form of interest and dividend. The recognition, measurement of div .....

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ash or another financial asset arising from this standard, shall be dealt in accordance with Ind AS 109, Financial Instruments. Annexure B [See rule 3] Amendments in other Indian Accounting Standards as a consequence to introduction of Ind AS 11, Construction Contracts and Ind AS 18, Revenue in place of Ind AS 115, Revenue from Contract with Customers Ind AS 1, Presentation of Financial Statements 1. Paragraph 34 shall be substituted by the following to the extent indicated: 34 Ind AS 18, Revenu .....

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on or other event, by netting any income with related expenses arising on the same transaction. For example: (a) an entity presents gains and losses on the disposal of non-current assets, including investments and operating assets, by deducting from the proceeds on disposal the carrying amount of the asset and related selling expenses; and (b) .... Ind AS 2, Inventories 1. Paragraphs 2(a), 8, 19, 29 and 37 shall be substituted by the following: 2(a) work in progress arising under construction co .....

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ies include the costs of the service, as described in paragraph 19, for which the entity has not yet recognised the related revenue (see Ind AS 18, Revenue). 19 To the extent that service providers have inventories, they measure them at the costs of their production. These costs consist primarily of the labour and other costs of personnel directly engaged in providing the service, including supervisory personnel, and attributable overheads. Labour and other costs relating to sales and general ad .....

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elating to the same product line that have similar purposes or end uses, are produced and marketed in the same geographical area, and cannot be practicably evaluated separately from other items in that product line. It is not appropriate to write inventories down on the basis of a classification of inventory, for example, finished goods, or all the inventories in a particular operating segment. Service providers generally accumulate costs in respect of each service for which a separate selling p .....

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. Ind AS 12, Income Taxes 1. Paragraph 59(a) shall be substituted by the following: 59(a) Royalty or dividend revenue is received in arrears and is included in accounting profit on a time apportionment basis in accordance with Ind AS 18, Revenue, or Ind AS 109, Financial Instruments, as relevant, but is included in taxable profit (tax loss) on a cash basis; and Ind AS 16, Property, Plant and Equipment 1. Paragraphs 68A, 69, 72 shall be substituted by the following: 68A However, an entity that, i .....

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he disposal of an item of property, plant and equipment may occur in a variety of ways (eg by sale, by entering into a finance lease or by donation). In determining the date of disposal of an item, an entity applies the criteria in Ind AS 18 for recognising revenue from the sale of goods. Ind AS 17 applies to disposal by a sale and leaseback. 72 The consideration receivable on disposal of an item of property, plant and equipment is recognised initially at its fair value. If payment for the item .....

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n Arrangements: Disclosures contained in Ind AS 11, Construction Contracts. Ind AS 17, Leases 1. Paragraph 8 of Appendix B shall be substituted by the following to the extent indicated: 8. The criteria in paragraph 20 of Ind AS 18, Revenue, shall be applied to the facts and circumstances of each arrangement in determining when to recognise a fee as income that an Entity might receive. Factors such as whether there is continuing involvement in the form of significant future performance obligation .....

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pendix A of Ind AS 11, Service Concession Arrangements. 3. Paragraphs 1 and 2 of Appendix D shall be substituted by the following: 1 Appendix A, Service Concession Arrangements contained in Ind AS 11, Construction Contacts. 2 Appendix B, Service Concession Arrangements: Disclosures contained in Ind AS 11, Construction Contacts Ind AS 23, Borrowing Costs 1. Paragraph 2 of Appendix A shall be substituted by the following: 2 Appendix A, Service Concession Arrangements contained in Ind AS 11, Constr .....

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or sale of goods on trade credit. 2. In Appendix B, paragraph 1 shall be substituted by the following: 1. Appendix A, Service Concession Arrangements contained in Ind AS 11, Construction Contracts. Ind AS 34, Interim Financial Reporting 1. Paragraphs 15B(b) shall be substituted by the following: 15B(b) recognition of a loss from the impairment of financial assets, property, plant and equipment, intangible assets, or other assets, and the reversal of such an impairment loss; 2. Paragraph 16A(l) .....

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his Standard. For example, some types of provisions are addressed in Standards on: (a) construction contracts (see Ind AS 11, Construction Contracts); (b) income taxes (see Ind AS 12, Income Taxes); (c) leases (see Ind AS 17, Leases). However, as Ind AS 17 contains no specific requirements to deal with operating leases that have become onerous, this Standard applies to such cases; (d) employee benefits (see Ind AS 19, Employee Benefits); (e) insurance contracts (see Ind AS 104, Insurance Contrac .....

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This Standard does not address the recognition of revenue. Ind AS 18, Revenue, identifies the circumstances in which revenue is recognised and provides practical guidance on the application of the recognition criteria. This Standard does not change the requirements of Ind AS 18. 2. Paragraph (i) of Appendix D shall be substituted by the following: (i) Appendix A, Service Concession Arrangements and Appendix B, Service Concession Arrangements: Disclosures, contained in Ind AS 11, Construction Con .....

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AS 11, Construction Contracts). 2. Paragraph 3(i) shall be deleted. 3. Paragraphs 114 and 116 shall be substituted by the following: 114 The disposal of an intangible asset may occur in a variety of ways (eg by sale, by entering into a finance lease, or by donation). In determining the date of disposal of such an asset, an entity applies the criteria in Ind AS 18, Revenue, for recognising revenue from the sale of goods. Ind AS 17 applies to disposal by a sale and leaseback. 116 The consideration .....

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AS 38 does not apply to intangible assets held by an entity for sale in the ordinary course of business (see Ind AS 2 and Ind AS 11) or leases that fall within the scope of Ind AS 17. Accordingly, this Appendix does not apply to expenditure on the development or operation of a web site (or web site software) for sale to another entity. When a web site is leased under an operating lease, the lessor applies this Appendix. When a web site is leased under a finance lease, the lessee applies this App .....

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so Ind AS 18, Revenue); 9(b) property being constructed or developed on behalf of third parties (see Ind AS 11, Construction Contracts). 67 The disposal of an investment property may be achieved by sale or by entering into a finance lease. In determining the date of disposal for investment property, an entity applies the criteria in Ind AS 18 for recognising revenue from the sale of goods. Ind AS 17 applies to a disposal effected by entering into a finance lease and to a sale and leaseback. 70 T .....

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S 101, First-time Adoption of Indian Accounting Standards 1. In Appendix D, paragraphs D1(m) and D22 along with its heading shall be substituted by the following to the extent indicated: D1(m) financial assets or intangible assets accounted for in accordance with Appendix A to Ind AS 11 Service Concession Arrangements (paragraph D22); Financial assets or intangible assets accounted for in accordance with Appendix A, Service Concession Arrangements to Ind AS 11 D22 A first-time adopter may apply .....

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uations and other information needed to apply the Appendix to past transfers were obtained at the time those transfers occurred. An entity shall disclose the date from which the Appendix D of Ind AS 18 was applied. 4. In Appendix 1, paragraph 10 shall be substituted by the following: 10 IFRS 9 Financial Instruments is effective from annual period beginning on or after January 1, 2018. As the above said standard is not yet effective consequential amendments due to this standard have not been inco .....

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ed in this standard. However, in order to maintain consistency with paragraph numbers of IFRS 1, the paragraph numbers are retained in Ind AS 101. Ind AS 103, Business Combinations 1. Paragraph 56 shall be substituted by the following: 56 After initial recognition and until the liability is settled, cancelled or expires, the acquirer shall measure a contingent liability recognised in a business combination at the higher of: (a) the amount that would be recognised in accordance with Ind AS 37; an .....

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4(c) contractual rights or contractual obligations that are contingent on the future use of, or right to use, a non-financial item (for example, some licence fees, royalties, contingent lease payments and similar items), as well as a lessee s residual value guarantee embedded in a finance lease (see Ind AS 17, Leases, Ind AS 18, Revenue, and Ind AS 38, Intangible Assets). 2. In Appendix B, paragraphs B7(b), B18(h) and B21 shall be substituted by the following: B7(b) If Ind AS 18, Revenue applied .....

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ods sold by a manufacturer, dealer or retailer are within the scope of this Ind AS. However, product warranties issued directly by a manufacturer, dealer or retailer are outside its scope, because they are within the scope of Ind AS 18 and Ind AS 37. B21 If the contracts described in paragraph B19 do not create financial assets or financial liabilities, Ind AS 18 applies. Under Ind AS 18, revenue associated with a transaction involving the rendering of services is recognised by reference to the .....

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ragraphs shall include those rights unless otherwise specified 2. Paragraph 2 of Appendix C shall be substituted by the following: 2. Appendix A, Service Concession Arrangements, contained in Ind AS 11, Construction Contracts Ind AS 109, Financial Instruments 1. Paragraphs 2.1(j), 2.2, 4.2.1(c)(ii), 4.2.1(d)(ii), 5.1.1, 5.1.3, 5.5.1, 5.5.15 shall be substituted by the following: 2.1(j) rights and obligations within the scope of Ind AS 11, Construction Contracts, and Ind AS 18, Revenue, that are .....

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rdance with the principles of Ind AS 18. 4.2.1(d)(ii) the amount initially recognised (see paragraph 5.1.1) less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 18. 5.1.1. At initial recognition, an entity shall measure a financial asset or financial liability at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable t .....

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s measure the loss allowance at an amount equal to lifetime expected credit losses for: (a) trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 11 and Ind AS 18. (b) lease receivables that result from transactions that are within the scope of Ind AS 17, if the entity chooses as its accounting policy to measure the loss allowance at an amount equal to lifetime expected credit losses. That accountin .....

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t risk;4 (b) equity instrument; (c) fair value; (d) financial asset; (e) financial instrument; (f) financial liability . 3. In Appendix B, paragraphs B2.2, B2.5(a)(ii), B2.5(c), B3.2.13(a) and B5.4.3 shall be substituted by the following: B2.2 This Standard does not change the requirements relating to royalty agreements based on the volume of sales or service revenues that are accounted for under Ind AS 18, Revenue. B2.5(a)(ii) the amount initially recognised less, when appropriate, the cumulati .....

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transferred asset at the date of the transfer is measured at the lower of (i) the carrying amount of the asset and (ii) the maximum amount of the consideration received in the transfer that the entity could be required to repay ( the guarantee amount ). The associated liability is initially measured at the guarantee amount plus the fair value of the guarantee (which is normally the consideration received for the guarantee). Subsequently, the initial fair value of the guarantee is recognised in p .....

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ill be entered into; and (c) loan syndication fees received by an entity that arranges a loan and retains no part of the loan package for itself (or retains a part at the same effective interest rate for comparable risk as other participants). 4. Paragraph 2 of Appendix E shall be substituted by the following: 2. Appendix A, Service Concession Arrangements contained in Ind AS 11, Construction Contracts 5. Paragraph 3 of Appendix 1shall be added namely:- 3 Following paragraphs deal with Ind AS 11 .....

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