MCA Amends Companies (Indian Accounting Standards) Amendment Rules 2022 in consultation with NFRA

The Ministry of Corporate Affairs (MCA) Notifies Companies (Indian Accounting Standards) Amendment Rules 2022.

The Notification is Given Below:

G.S.R 255(E).——In exercise of the powers conferred by section 133 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government, in consultation with the National Financial Reporting Authority, hereby makes the following rules further to amend the Companies (Indian Accounting Standards) Rules, 2015, namely:-

1. Short title and commencement.- (1) These rules may be called the Companies (Indian Accounting Standards) Amendment Rules, 2022.

(2) They shall come into force with effect from 1st day of April, 2022.

2. In the Companies (Indian Accounting Standards) Rules, 2015, in the “Annexure”, under the heading “B. Indian Accounting Standards (Ind AS)”,-

(A) in “Indian Accounting Standard (Ind AS) 101″, –

(i) after paragraph 39AF, the following shall be inserted, namely:-

“39AG Annual Improvements to Ind AS (2021), amended paragraph D1(f) and added paragraph D13A. An entity shall apply that amendment for annual reporting periods beginning on or after 1st April, 2022.”;

(ii) in Appendix D, in paragraph D1, for sub-item (f), the following shall be substituted, namely:-

“(f) cumulative translation differences (paragraphs D12–D13A); “;

(iii) in Appendix D, after paragraph D13, the following shall be inserted, namely:-

“D13A Instead of applying paragraph D12 or paragraph D13, a subsidiary that uses the exemption in paragraph D16(a) may elect, in its financial statements, to measure cumulative translation differences for all foreign operations at the carrying amount that would be included in the parent‘s consolidated financial statements, based on the parent‘s date of transition to Ind ASs, if no adjustments were made for consolidation procedures and for the effects of the business combination in which the parent acquired the subsidiary. A similar election is available to an associate or joint venture that uses the exemption in paragraph D16(a).”

(B) in “Indian Accounting Standard (Ind AS) 103”, –

(i) for paragraph 11, the following shall be substituted, namely:-

“11 To qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual Framework) issued by the Institute of Chartered Accountants of India at the acquisition date. For example, costs the acquirer expects but is not obliged to incur in the future to effect its plan to exit an activity of an acquiree or to terminate the employment of or relocate an acquiree‘s employees are not liabilities at the acquisition date. Therefore, the acquirer does not recognise those costs as part of applying the acquisition method. Instead, the acquirer recognises those costs in its post combination financial statements in accordance with other Ind AS.”;

(ii) for paragraph 14, the following shall be substituted, namely:-

“14 Paragraphs B31–B40 provide guidance on recognising intangible assets. Paragraphs 21A–28B specify the types of identifiable assets and liabilities that include items for which this Ind AS provides limited exceptions to the recognition principle and conditions.”;

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