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Implementation of Indian Accounting Standards (Ind AS)

RBI - RBI/2016-17/34 - Dated:- 4-8-2016 - RBI/2016-17/34 RBI/2016-17/DBR.FID.No. 1/01.02.000/2016-17 August 04, 2016 All India Financial Institutions (Exim Bank, NABARD, NHB and SIDBI) Madam / Dear Sir, The Ministry of Corporate Affairs (MCA), Government of India has notified the Companies (Indian Accounting Standards) Rules, 2015 on February 16, 2015. A reference is also invited to the Press Release dated January 18, 2016 issued by the MCA outlining the roadmap for implementation of Internation .....

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ection issued by the Reserve Bank in this regard, in the following manner: (i) AIFIs shall comply with the Indian Accounting Standards (Ind AS) for financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter. Ind AS shall be applicable to both standalone financial statements and consolidated financial statements. Comparatives shall mean comparative figures for the preceding accounting period. (ii) AIFIs s .....

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4. Ind AS implementation is likely to significantly impact the financial reporting systems and processes and, as such, these changes need to be planned, managed, tested and executed in advance of the implementation date. Each AIFI is advised to set up a Steering Committee headed by an official of the rank of an Executive Director (or equivalent) comprising members from cross-functional areas of the AIFI to immediately initiate the implementation process. The name and details of the designated of .....

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nting policies, preparation of disclosures, documentation, preparation of proforma Ind AS financial statements, timing the changeover to Ind AS, and dry-run of accounting systems and end-to-end reporting process before the actual conversion. b) Systems and processes: Evaluate system changes - assessment of processes requiring changes, issues having significant impact on information systems (including IT systems), and develop/strengthen data capture system, where required. c) Business Impact: Pro .....

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assess the impact of the Ind AS implementation on their financial position including the adequacy of capital, taking into account the Basel III capital requirements, as and when these are made applicable to the AIFIs, and submit quarterly progress reports to their Boards. AIFIs also need to be in preparedness to submit proforma Ind AS financial statements as per the formats given in Annex I to IV, and the associated guidance given in Annex V, to the Reserve Bank from the half-year ended Septembe .....

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itate the implementation process by holding periodic meetings with AIFIs. The Reserve Bank shall issue necessary instructions/guidance/clarifications on relevant aspects as and when required. 7. AIFIs shall disclose in their Annual Report, the strategy for Ind AS implementation, including the progress made in this regard. These disclosures shall be made from the financial year 2016-17 until full implementation. 8. The Boards of the AIFIs shall have the ultimate responsibility in determining the .....

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General Manager in Charge, Department of Banking Regulation, Central Office, Reserve Bank of India, Mumbai. NHB shall submit Proforma Ind AS Financial statements for the half year ended December 31, 2016 latest by February 28, 2017. AIFIs shall be guided by the Ind ASs notified by the Ministry of Corporate Affairs, Government of India under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016, as amended from time to time, i .....

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inancial statements shall be as on December 31, 2016 instead of September 30, 2016 and July 01, 2016 instead of April 01, 2016) 3. The formats as per the Annexes are solely for the preparation and submission of proforma Ind AS financial statements to the Reserve Bank. The formats for the Ind AS financial statements for the accounting periods beginning April 1, 2018 shall be notified separately. It is also clarified that AIFIs shall continue to be guided by the extant instructions issued vide the .....

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ted proforma Ind AS financial statements for the half year ended September 30, 2016 are permitted to submit only standalone financial statements. However, AIFIs shall submit both proforma Ind AS standalone and consolidated financial statements in the subsequent periods. 6. AIFIs shall disclose significant accounting policies including, inter alia, the following: (i) financial assets and financial liabilities, including use of fair value option in designating financial assets or financial liabili .....

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nformation provided should include both discussion of the judgment required and how it is applied in determining the allowance. The treatment for non-fund based facilities. The methodology for computation of ECL for revolving credit facilities. The areas where the AIFIs intends to refine work on in this ECL estimate and the work plan / timeline to achieve it. The impact of movement from the current approach to the ECL approach- reconciliation of the stock of provisions under the current reportin .....

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dit loss methodologies commensurate with the size, complexity, and risk profile specific to individual AIFIs. AIFIs may also note that the Reserve Bank shall finalise the policy on expected credit loss provisioning, taking into account the impairment requirements under Ind AS 109, after due deliberations, and considering various factors including, inter alia, the inputs as above. AIFIs are therefore advised to maintain flexibility while designing the systems and processes in this regard. (iii) d .....

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ptember 30, 2016, the notional date of transition to Ind ASs shall be the beginning of business as on April 01, 2016 (or equivalently close of business as on March 31, 2016/June 30, 2016 for NHB). This however, does not change the date of transition for the purpose of preparation of Ind AS financial statements for the accounting periods beginning April 1, 2018, which shall be as per the provisions of Ind AS 101 First Time Adoption of Indian Accounting Standards. 8. The Proforma Ind ASs Financial .....

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