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Thread: 05 - Indian Accounting Standard (Ind AS) 10 - Earlier Accounting standard (4) - Events after the Reporting Period

  1. #11
    IND-AS
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    Thumbs up Non-adjusting events after the reporting period of Indian Accounting Standard (Ind AS) 10 - Earlier Accounting standard (4)

    Non-adjusting events after the reporting period of Indian Accounting Standard (Ind AS) 10 - Earlier Accounting standard (4)

    Events after the Reporting Period

    Disclosure


    Non-adjusting events after the reporting period

    21. If non-adjusting events after the reporting period are material, non-disclosure could influence the economic decisions that users make on the basis of the financial statements. Accordingly, an entity shall disclose the following for each material category of non-adjusting event after the reporting period:

    (a) the nature of the event; and
    (b) an estimate of its financial effect, or a statement that such an estimate cannot be made.

    22. The following are examples of non-adjusting events after the reporting period that would generally result in disclosure:

    (a) a major business combination after the reporting pe riod Ind AS103 Business Combinations requires specific disclosures in such cases) or disposing of a major subsidiary;
    (b) announcing a plan to discontinue an operation;
    (c) major purchases of assets, classification of assets as held for sale in accordance with Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations , other disposals of assets, or expropriation of major assets by government;
    (d) the destruction of a major production plant by a fire after the reporting period;
    (e) announcing, or commencing the implementation of, a major restructuring (see Ind AS 37);
    (f) major ordinary share transactions and potential ordinary share transactions after the reporting period Ind AS 33 Earnings per Share requires an entity to disclose a description of such transactions, other than when such transactions involve capitalisation or bonus issues, share splits or reverse share splits all of which are required to be adjusted under Ind AS 33);
    (g) abnormally large changes after the reporting period in asset prices or for eign exchange rates;
    (h) changes in tax rates or tax laws enacted or announced after the reporting period that have a significant effect on current and deferred tax assets and liabilities (see Ind AS 12 Income Taxes);
    (i) entering into significant commitments or contingent liabilities, for example, by issuing significant guarantees; and
    (j) commencing major litigation arising solely out of events that occurred after the reporting period.

    Last edited by IND-AS; 29-01-2011 at 06:16 PM.

  2. #12
    IND-AS
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    Thumbs up Appendix - A of Indian Accounting Standard (Ind AS) 10 - Earlier Accounting standard (4) - Events after the Reporting Period

    Appendix - A of Indian Accounting Standard (Ind AS) 10 - Earlier Accounting standard (4)

    Events after the Reporting Period


    Appendix - A


    Distribution of Non-cash Assets to Owners1This Appendix is an integral part of Ind AS 10.

    Background

    1 Sometimes an entity distributes assets other than cash (non -cash assets) as dividends to its owners2 acting in their capacity as owners. In those situations, an entity may also give its owners a choice of receiving either non-cash assets or a cash alternative.

    2. Indian Accounting Standards (Ind ASs) do not provide guidance on how an entity should measure distributions to its owners (commonly referred to as dividends). Ind AS 1 requires an entity to present details of dividends recognised as distributions to owners either in the statement of changes in equity presented as a part of the balance sheet or in the notes to the financial statements.

    Scope

    3. This Appendix applies to the following types of non -reciprocal distributions of assets by an entity to its owners acting in their capacity as owners:

    (a) distributions of non-cash assets (eg items of property, plant and equipment, businesses as defined in Ind AS 103, ownership interests in another entity o r disposal groups as defined in Ind AS 105; and
    (b) distributions that give owners a choice of receiving either non -cash assets or a cash alternative.

    4. This Appendix applies only to distributions in which all owners of the same class of equity instruments are treated equally.

    5. This Appendix does not apply to a distribution of a non -cash asset that is ultimately controlled by the same party or parties before and after the distribution. This exclusion applies to the separate, individual and consolid ated financial statements of an entity that makes the distribution.

    6. In accordance with paragraph 5, this Appendix does not apply when the non -cash asset is ultimately controlled by the same parties both before and after the distribution. Paragraph B2 of Ind AS 103 states that ‘A group of individuals shall be regarded as controlling an entity when, as a result of contractual arrangements, they collectively have the power to govern its financial and operating policies so as to obtain benefits from its act ivities.’ Therefore, for a distribution to be outside the scope of this Appendix on the basis that the same parties control the asset both before and after the distribution, a group of individual shareholders receiving the distribution must have, as a resu lt of contractual arrangements, such ultimate collective power over the entity making the distribution.

    7. In accordance with paragraph 5, this Appendix does not apply when an entity distributes some of its ownership interests in a subsidiary but retains control of the subsidiary. The entity making a distribution that results in the entity recognising a non -controlling interest in its subsidiary accounts for the distribution in accordance with Ind AS 27.

    8. This Appendix addresses only the accounting by an entity that makes a non-cash asset distribution. It does not address the accounting by shareholders who receive such a distribution.

    Issues


    9 When an entity declares a distribution and has an obligation to distribute the assets concerned to its owners, it must recognise a liability for the dividend payable. Consequently, this Appendix addresses the following issues:

    (a) When should the entity recognise the dividend payable?
    (b) How should an entity measure the dividend payable?
    (c) When an entity settles the dividend payable, how should it account for any difference between the carrying amount of the assets distributed and the carrying amount of the dividend payable?

    Accounting Principles

    When to recognise a dividend payable


    10. The liability to pay a dividend shall be recognised when the dividend is appropriately authorised and is no longer at the discretion of the entity, which is the date:

    (a) when declaration of the dividend, eg by management or the board of directors, is approved by the relevant authority, eg the shareholders, if the jurisdiction requires such approval, or
    (b) when the dividend is declared, eg by management or the board of directors, if the jurisdiction does not require further approval.

    Measurement of a dividend payable

    11. An entity shall measure a liability to distribute non -cash assets as a dividend to its owners at the fair value of the assets to be distributed.

    12. If an entity gives its owners a choice of receiving either a non -cash asset or a cash alternative, the entity shall estimate the dividend payable by considering both the fair value of each alternative and the associated probability of owners selecting each alternative.

    13. At the end of each reporting period and at the date of settlement, the entity shall review and adjust the carrying amount of the dividend payable, with any changes in the carrying amount of the dividend payable recognised in equity as adjustments to the amount of the distribution.

    Accounting for any difference between the ca rrying amount of the assets distributed and the carrying amount of the dividend payable when an entity settles the dividend payable


    14. When an entity settles the dividend payable, it shall recognise the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the dividend payable in profit or loss.

    Presentation and disclosures


    15. An entity shall present the difference described in paragraph 14 as a separate line item in profit or loss.

    16. An entity shall disclose the following information, if applicable:

    (a) the carrying amount of the dividend payable at the beginning and end of the period;
    and
    (b) the increase or decrease in the carrying amount recognised in the period in accordance with paragraph 13 as result of a change in the fair value of the assets to be distributed.

    17 If, after the end of a reporting period but before the financial statements are approved for issue, an entity declares a dividend to distribute a non -cash asset, it shall disclose:

    (a) the nature of the asset to be distributed;
    (b) the carrying amount of the asset to be distributed as of the end of the reporting period; and
    (c) the estimated fair value of the asset to be distributed as of the end of the reporting period, if it is different from its carrying amount, and the information about the method used to determine that fair value required by Ind AS 107 paragraph 27(a) and (b).

    Illustrative examples

    These examples accompany, but are not part of this appendix

    For Illustrative examples u Can download this in pdf format

    Attached Files Attached Files

  3. #13
    IND-AS
    Guest

    Thumbs up Appendix -1 of Indian Accounting Standard (Ind AS) 10 - Earlier Accounting standard (4) - Events after the Reporting Period

    Appendix -1 of Indian Accounting Standard (Ind AS) 10 - Earlier Accounting standard (4)

    Events after the Reporting Period


    Appendix -1

    Note
    : This Appendix is not a part of the Indian Accounting Standard. The purpose of this Appendix is only to bring out the differences, if any, between Indian Accounting Standard (Ind AS) 10 and the corresponding International Accounting Standard (IAS) 10, Events after the Reporting Period.

    Comparison with IAS 10, Events after the Reporting Period and IFRIC Interpretation 17

    1. Different terminology is used in this standard, e.g., the term ‘balance sheet’ is used instead of ‘Statement of financial position’. The words ‘approval of the financial statements for issue have been used instead of ‘authorisation of the financial statements for issue’ in the context of financial statements considered for the purpose of eve nts after the reporting period.



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