Page 1 of 4 1234 LastLast
Results 1 to 10 of 33

Thread: 32 Accounting Standard AS 32 – Financial Instruments: Disclosures AS 32

  1. #1
    AAS
    Guest

    Thumbs up 32 Accounting Standard AS 32 – Financial Instruments: Disclosures AS 32

    Accounting Standard (AS) 32 Financial Instruments: Disclosures


    (This Accounting Standard includes paragraphs set in bold italic type and plain type, which have equal authority. Paragraphs in bold italic type indicate the main principles. This Accounting Standard should be read in the context of its objective and the Preface to the Statements of Accounting Standards1.)


    Accounting Standard (AS) 32, Financial Instruments: Disclosures, issued by the Council of the Institute of Chartered Accountants of India, comes into effect in respect of accounting periods commencing on or after 1-4-2009 and will be recommendatory in nature for an initial period of two years. This Accounting Standard will become mandatory2 in respect of accounting periods commencing on or after 1-4-2011 for all commercial, industrial and business entities except to a Small and Medium-sized Entity, as defined below:

    (i) Whose equity or debt securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India;

    (ii) which is not a bank (including a co-operative bank), financial institution or any entity carrying on insurance business;

    (iii) whose turnover (excluding other income) does not exceed rupees fifty crore in the immediately preceding accounting year;

    (iv) which does not have borrowings (including public deposits) in excess of rupees ten crore at any time during the immediately preceding accounting year; and

    (v) which is not a holding or subsidiary entity of an entity which is not a small and medium-sized entity.

    For the above purpose an entity would qualify as a Small and Medium-sized Entity, if the conditions mentioned therein are satisfied as at the end of the relevant accounting period.

    Where in respect of an entity there is a statutory requirement for disclosing any financial instrument in a particular manner as asset, liability or equity and/or for disclosing income, expenses, gains or losses relating to a financial instrument in a particular manner as income/expense or as distribution of profits, the entity should disclose that instrument and/or income, expenses, gains or losses relating to the instrument in accordance with the requirements of the statute governing the entity. Until the relevant statute is amended, the entity disclosing that instrument and/ or income, expenses, gains or losses relating to the instrument in accordance with the requirements thereof will be considered to be complying with this Accounting Standard, in view of paragraph 4.1 of the Preface to the Statements of Accounting Standards which recognises that where a requirement of an Accounting Standard is different from the applicable law, the law prevails.


    The following is the text of the Accounting Standard.
    Last edited by passionateamit; 07-08-2010 at 12:41 PM.

  2. #2
    AAS
    Guest

    Default Objective Accounting Standard (AS) 32 Financial Instruments Disclosures

    Objective Accounting Standard (AS) 32 Financial Instruments Disclosures


    1. The objective of this Standard is to require entities to provide disclosures in their financial statements that enable users to evaluate:

    (a) the significance of financial instruments for the entity’s financial position and performance; and

    (b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the reporting date, and how the entity manages those risks.


    2. The principles in this Accounting Standard complement the principles for recognising, measuring and presenting financial assets and financial liabilities in Accounting Standard (AS) 30, Financial Instruments: Recognition and Measurement and Accounting Standard (AS) 31, Financial Instruments: Presentation.

  3. #3
    AAS
    Guest

    Default Scope of Accounting Standard (AS) 32 Financial Instruments Disclosures

    Scope of Accounting Standard (AS) 32 Financial Instruments Disclosures



    3. This Accounting Standard should be applied by all entities to all types of financial instruments, except:


    (a) those interests in subsidiaries, associates and joint ventures that are accounted for in accordance with AS 21, Consolidated Financial Statements and Accounting for Investment in Subsidiaries in Separate Financial Statements, AS 23, Accounting for Investments in Associates, or AS 27, Financial Reporting of Interests in Joint Ventures. However, in some cases, AS 21, AS
    23 or AS 27 permits or requires an entity to account for an interest in a subsidiary, associate or joint venture using Accounting Standard (AS) 30, Financial Instruments: Recognition and

    Measurement; in those cases, entities should apply the disclosure requirements in AS 21, AS 23 or AS 27 in addition to those in this Accounting Standard. Entities should also apply this Accounting Standard to all derivatives linked to interests in subsidiaries, associates or joint ventures unless the derivative meets the definition of an equity instrument in AS 31.


    (b) employers’ rights and obligations arising from employee benefit plans, to which AS 15, Employee Benefits, applies.

    (c) contracts for contingent consideration in a business combination4. This exemption applies only to the acquirer.

    (d) insurance contracts as defined in Accounting Standard on Insurance Contracts. However, this Accounting Standard applies to derivatives that are embedded in insurance contracts if Accounting Standard (AS) 30, Financial

    Instruments: Recognition and Measurement, requires the entity to account for them separately. Moreover, an issuer should apply this Accounting Standard to financial guarantee contracts if the issuer applies AS 30 in recognising and measuring the contracts, but should apply the Accounting Standard on Insurance Contracts if the issuer elects, in accordance with the Accounting
    Standard on Insurance Contracts, to apply that Accounting Standard in recognising and measuring them.


    (e) financial instruments, contracts and obligations under share-based payment transactions except that this Accounting Standard applies to contracts within the scope of paragraphs 4 to 6 of AS 30.


    4. This Accounting Standard applies to recognised and unrecognised financial instruments. Recognised financial instruments include financial assets and financial liabilities that are within the scope of AS 30. Unrecognised financial instruments include some financial instruments that, although outside the scope of AS 30, are within the scope of this Accounting Standard (such as some loan commitments).


    5. This Accounting Standard applies to contracts to buy or sell a non-financial item that are within the scope of AS 30 (see paragraphs 4-6 of AS 30).

  4. #4
    AAS
    Guest

    Default Classes of financial instruments and level of disclosure

    Classes of financial instruments and level of disclosure


    6. When this Accounting Standard requires disclosures by class of financial instrument, an entity should group financial instruments into classes that are appropriate to the nature of the information disclosed and that take into account the characteristics of those financial instruments. An entity should provide sufficient information to permit reconciliation to the line items presented in the balance sheet.

  5. #5
    AAS
    Guest

    Default Significance of financial instruments for financial position and performance of Accounting Standard (AS) 32 Financial Instruments Disclosures

    Significance of financial instruments for financial position and performance of Accounting Standard (AS) 32 Financial Instruments Disclosures


    7. An entity should disclose information that enables users of its financial statements to evaluate the significance of financial instruments for its financial position and performance.


    Balance sheet

    Categories of financial assets and financial liabilities

    8. The carrying amounts of each of the following categories, as defined in AS 30, should be disclosed either on the face of the balance sheet or in the notes:

    (a) financial assets at fair value through profit or loss, showing separately

    (i) those designated as such upon initial recognition and

    (ii) those classified as held for trading in accordance with AS 30;

    (b) held-to-maturity investments;

    (c) loans and receivables;

    (d) available-for-sale financial assets;

    (e) financial liabilities at fair value through profit or loss, showing separately


    (i) those designated as such upon initial recognition and

    (ii) those classified as held for trading in accordance with AS 30; and

    (f) financial liabilities measured at amortised cost.

  6. #6
    AAS
    Guest

    Default Financial assets or financial liabilities at fair value through profit or loss

    Financial assets or financial liabilities at fair value through profit or loss

    9. If the entity has designated a loan or receivable (or group of loans or receivables) as at fair value through profit or loss, it should disclose:

    (a) the maximum exposure to credit risk (see paragraph 36(a)) of the loan or receivable (or group of loans or receivables) at the reporting date.

    (b) the amount by which any related credit derivatives or similar instruments mitigate that maximum exposure to credit risk.

    (c) the amount of change, during the period and cumulatively, in the fair value of the loan or receivable (or group of loans or receivables) that is attributable to changes in the credit risk of the financial asset determined either:

    (i) as the amount of change in its fair value that is not attributable to changes in market conditions that give rise to market risk; or

    (ii) using an alternative method the entity believes more faithfully represents the amount of change in its fair value that is attributable to changes in the credit risk of the asset.


    Changes in market conditions that give rise to market risk include changes in an observed(benchmark) interest rate, commodity price, foreign exchange rate or index of prices or rates.


    (d) the amount of the change in the fair value of any related credit derivatives or similar instruments that has occurred during the period and cumulatively since the loan or receivable was designated.


    10. If the entity has designated a financial liability as at fair value through profit or loss in accordance with paragraph 8.2 of AS 30, it should disclose:

    (a) the amount of change, during the period and cumulatively, in the fair value of the financial liability that is attributable to changes in the credit risk of that liability determined either:

    (i) as the amount of change in its fair value that is not attributable to changes in market conditions that give rise to market risk (See Appendix B, paragraph B4); or

    (ii) using an alternative method the entity believes more faithfully represents the amount of change in its fair value that is attributable to changes in the credit risk of the liability.


    Changes in market conditions that give rise to market risk include changes in a benchmark interest rate, the price of another entity’s financial instrument, a commodity price, a foreign exchange rate or an index of prices or rates. For contracts that include a unit-linking feature, changes in market conditions include changes in the performance of the related internal or external investment fund.

    (b) the difference between the financial liability’s carrying amount and the amount the entity would be contractually required to pay at maturity to the holder of the obligation.


    11. The entity should disclose:

    (a) the methods used to comply with the requirements in paragraphs 9(c) and 10(a).

    (b) if the entity believes that the disclosure it has given to comply with the requirements in paragraph 9(c) or 10(a) does not faithfully represent the change in the fair value of the financial asset or financial liability attributable to changes in its credit risk, the reasons for reaching this conclusion and the factors it believes are relevant.

  7. #7
    AAS
    Guest

    Default Reclassification of Accounting Standard (AS) 32 Financial Instruments Disclosures

    Reclassification of Accounting Standard (AS) 32 Financial Instruments Disclosures


    12. If the entity has reclassified a financial asset as one measured:

    (a) at cost or amortised cost, rather than at fair value; or

    (b) at fair value, rather than at cost or amortised cost, it should disclose the amount reclassified into and out of each category and the reason for that reclassification (see paragraphs 57-60 of AS 30).

  8. #8
    AAS
    Guest

    Default Derecognition of Accounting Standard (AS) 32 Financial Instruments Disclosures

    Derecognition of Accounting Standard (AS) 32 Financial Instruments Disclosures


    13. An entity may have transferred financial assets in such a way that part or all of the financial assets do not qualify for derecognition (see paragraphs 15-37 of AS 30). The entity should disclose for each class of such financial assets:

    (a) the nature of the assets;

    (b) the nature of the risks and rewards of ownership to which the entity remains exposed;

    (c) when the entity continues to recognise all of the assets, the carrying amounts of the assets and of the associated liabilities; and

    (d) when the entity continues to recognise the assets to the extent of its continuing involvement, the total carrying amount of the original assets, the amount of the assets that the entity continues to recognise, and the carrying amount of the associated liabilities.

  9. #9
    AAS
    Guest

    Default Collateral of Accounting Standard (AS) 32 Financial Instruments Disclosures

    Collateral of Accounting Standard (AS) 32 Financial Instruments Disclosures


    14. An entity should disclose:

    (a) the carrying amount of financial assets it has pledged as collateral for liabilities or contingent liabilities, including amounts that have been reclassified in accordance with paragraphs 37(a) of AS 30; and


    (b) the terms and conditions relating to its pledge.

    15. When an entity holds collateral (of financial or non-financial assets) and is permitted to sell or repledge the collateral in the absence of default by the owner of the collateral, it should disclose:

    (a) the fair value of the collateral held;

    (b) the fair value of any such collateral sold or repledged, and whether the entity has an obligation to return it; and

    (c) the terms and conditions associated with its use of the collateral.

  10. #10
    AAS
    Guest

    Default Allowance account for credit losses of Accounting Standard (AS) 32 Financial Instruments Disclosures

    Allowance account for credit losses of Accounting Standard (AS) 32 Financial Instruments Disclosures


    16. When financial assets are impaired by credit losses and the entity records the impairment in a separate account (eg an allowance account used to record individual impairments or a similar account used to record a collective impairment of assets) rather than directly reducing the carrying amount of the asset, it should disclose a reconciliation of changes in that account during the period for each class of financial assets.

Tags for this Thread

Bookmarks

Posting Permissions

  • Register / Login to post new threads
  • Register / Login to post replies
  • Register / Login to post attachments
  • You may not edit your posts
  •