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Thread: 01 - Indian Accounting Standard (Ind-AS) 101 - First-time Adoption of Indian Accounting Standards

  1. #21
    IND-AS
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    Thumbs up Appendix - D of Indian Accounting Standard (Ind-AS) 101- First-time Adoption of Indian Accounting Standards

    Appendix - D of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards


    Appendix - D

    Exemptions from other Ind-ASs


    This appendix is an integral part of this Ind-AS.

    D1. An entity may elect to use one or more of the following exemptions:

    (a) share-based payment transactions (paragraphs D2 and D3);
    (b) insurance contracts (paragraph D4);
    (c) deemed cost (paragraphs D5–D8A);
    (d) leases (paragraphs D9 and D9A);
    (e) employee benefits (paragraphs D10 and D11);
    (f) cumulative translation differences and accumulated exchange differences (paragraphs D12 -D13A);
    (g) investments in subsidiaries, jointly control led entities and associates (paragraphs D14 and D15);
    (h) assets and liabilities of subsidiaries, associates and joint ventures (paragraphs D16 and D17);
    (i) compound financial instruments (paragraph D18);
    (j) designation of previously recognised financial instruments (paragraph D19-D 19B);
    (k) fair value measurement of financial assets or financial liabilities at initial recognition (paragraph D20);
    (l) decommissioning liabilities included in the cost of property, plant and equipment (paragraphs D21 and D21A);
    (m) financial assets or intangible assets accounted for in accordance with Appendix A to Ind AS 11 Service Concession Arrangements (paragraph D22);
    (n) borrowing costs (paragraph D23);
    (o) transfers of assets from customers (paragraph D24).
    (p) extinguishing financial liabilities with equity instruments (paragraph D25); and
    (q) non-current assets held for sale and discontinued operations (paragraph D26).

    An entity shall not apply these exemptions by analogy to other items.

    Share-based payment transactions

    D2. A first-time adopter is encouraged, but not required, to apply Ind AS 102 Share-based Payment to equity instruments that vested before date of transition to Ind-ASs. However, if a first-time adopter elects to apply Ind AS 102 to such equity instruments, it may do so only if the entity has disclosed publicly the fair value of those equity instruments, determined at the measurement date, as defined in Ind AS 102. For all grants of equity instruments to which Ind AS 102 has not been applied i.e. equity instruments vested but not settled before date of transition to Ind -ASs, a first-time adopter shall nevertheless disclose the information required by paragraphs 44 and 45 of Ind AS 102. If a first-time adopter modifies the terms or conditions of a grant of equity instruments to which Ind AS 102 has not been applied, the entity is not required to apply paragraphs 26 – 29 of Ind AS 102 if the modification occurred before the date of transition to Ind-ASs.

    D3. A first-time adopter is encouraged, but not required, to apply Ind AS 102 to liabilities arising from share-based payment transactions that were settled before the date of transition to Ind -ASs.


  2. #22
    IND-AS
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    Thumbs up Insurance contracts of Indian Accounting Standard (Ind-AS) 101 - First-time Adoption of Indian Accounting Standards

    Insurance contracts of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards

    Appendix - D


    Insurance contracts

    D4. An entity shall apply Ind AS 104 Insurance Contracts for annual periods beginning on or after date of transition to Ind -AS. Earlier application is encouraged. If an entity applies this Ind AS 104 for an earlier period, it shall disclose that fact.

    In applying paragraph 39(c)(iii), of Ind AS 104 an entity need not disclose information about claims development that occurred earlier than five years before the end of the first financial year in which it applies Ind AS 104 . Furthermore, if it is impracticable, when an entity first applies Ind AS 104 , to prepare information about claims development that occurred before the beginning of the earliest period for which an entity presents information that complies with this Ind AS , the entity shall disclose that fact.

    When an insurer changes its accounting policies for insurance liabilities, it is permitted, but not required, to reclassify some or all of its financial assets as 'at fair value through profit or loss'. This reclassification is permitted if an insurer changes accounting policies when it first applies Ind AS 104 and if it makes a subsequent policy change permitted by paragraph 22. The reclassification is a change in accounting policy and Ind AS 8 applies.


  3. #23
    IND-AS
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    Thumbs up Deemed cost of Indian Accounting Standard (Ind-AS) 101 - First-time Adoption of Indian Accounting Standards

    Deemed cost of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards

    Appendix - D


    Deemed cost


    D5. A first-time adopter may elect to measure an item of property, plant and equipment at the date of transition to Ind-ASs at its fair value and use that fair value as its deemed cost at that date.

    D6. A first-time adopter may elect to use a previous GAAP revaluation of an item of property, plant and equipment at, or before, the date of transition to Ind-ASs as deemed cost at the date of the revaluation, if the revaluation was, at the date of the revaluation, broadly comparable to:
    (a) fair value; or
    (b) cost or depreciated cost in accordance with Ind -ASs, adjusted to reflect, for example, changes in a general or specific price index.

    D7. The elections in paragraphs D5A and D6 are also available for:

    (a) investment property, accounted for in accordance with the cost model in Ind AS 40 Investment Property; and
    (b) intangible assets that meet:
    (i) the recognition criteria in Ind AS 38 (including reliable measurement of original cost); and
    (ii) the criteria in Ind AS 38 for revaluation (including the existence of an active market).

    An entity shall not use these elections for other assets or for liabilities.

    D7A. A first-time adopter may elect to continue with the carrying value as at the date of transition to Ind-AS, for all of its property, plant and equipment as recognised in the financial statements as at the end of the financial year ending as at March 31, 2007 or relevant date immediately preceding date where it has a different financial year, e.g., December 31, 2006 and which were measured as per the previous GAAP and use that as its deemed cost as at the date of transition to Ind-AS after making necessary adjustments on the date of transition in accordance with paragraph D21 and D21A of this standard. In the consolidated financial statements of an entity where property, plant and equipment of subsidiary, joint venture or associate have been measured as per the previous GAAP for the purpose of consolidation then the amounts so used for the purpose of consolidation should be considered for the aforesaid optional exemption.

    If an entity is preparing its consolidated financial statements for the first time and if any of its subsidiary, jointly controlled entity or associate has not measured property, plant and equipment in accordance with the previous GAAP, then to that extent the first time adopter should recompute carrying values of the property, plant and equipment in accordance with the principles of Ind AS 16: Property, Plant and Equipment as on the date of transition to Ind-AS after considering the first time adoption exemption available in this standard for that subsidiary, jointly controlled entity or associate.

    The above option can also be availed for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Property.

    D8 A first-time adopter may have established a deemed cost in accordance with previous GAAP for some or all of its assets and liabilities by measuring them at their fair value at one particular date because of an event such as a privatisation or initial public offering. It may use such event-driven fair value measurements as deemed cost for Ind -ASs at the date of that measurement.

    D8A. Under some GAAPs exploration and development costs for oil and gas properties in the development or production phases are accounted for in cost centres that include all properties in a large geographical area. A first-time adopter using such accounting under previous GAAP may elect to measure oil and gas assets at the date of transition to Ind -ASs on the following basis:

    (a) exploration and evaluation assets at the amount determined under the entity’s previous GAAP; and
    (b) assets in the development or production phases at the amount determined for the cost centre under the entity’s previous GAAP. The entity shall allocate this amount to the cost centre’s underlying assets pro rata using reserve volumes or reserve values as of that date.

    The entity shall test exploration and evaluation assets and assets in the development and production phases for impairment at the date of transition to Ind-ASs in accordance with Ind AS 106 Exploration for and Evaluation of Mineral Resources or Ind AS 36 respectively and, if necessary, reduce the amount determined in accordance with (a) or (b) above. For the purposes of this paragraph, oil and gas assets comprise only those assets used in the exploration, evaluation, development or production of oil and gas.

    D8B. Some entities hold items of property, plant and equipment or intangible assets that are used, or were previously used, in operations subject to rate regulation. The carrying amount of such items might include amounts that were determined under previous GAAP but do not qualify for capitalisation in accordance with Ind -ASs. If this is the case, a first - time adopter may elect to use the previous GAAP carrying amount of such an item at the date of transition to Ind-ASs as deemed cost. If an entity applies this exemption to an item, it need not apply it to all items. At the date of transition to Ind-ASs, an entity shall test for impairment in accordance with Ind AS 36 each item for which this exemption is used. For the purposes of this paragraph, operations are subject to rate regulation if they provide goods or services to customers at prices (i.e. rates) established by an authorised body empowered to establish rates that bind the customers and that are designed to recover the specific costs the entity incurs in providing the regulated goods or services and to earn a specified return. The specified return could be a minimum or range and need not be a fixed or guaranteed return.


  4. #24
    IND-AS
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    Thumbs up Leases of Indian Accounting Standard (Ind-AS) 101 - First-time Adoption of Indian Accounting Standards

    Leases of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards

    Appendix - D


    Leases

    D9. A first-time adopter may apply paragraphs 6-9 of the Appendix C of Ind AS 17 Determining whether an Arrangement contains a Lease to determine whether an arrangement existing at the date of transition to Ind-ASs contains a lease on the basi s of facts and circumstances existing at the date of transition to Ind -AS except where the effect is expected to be not material. .

    D9A. If a first-time adopter made the same determination of whether an arrangement contained a lease in accordance with previous GAAP as that required by Appendix C of Ind AS 17 - but at a date other than that required by D9 above, the first -time adopter need not reassess that determination when it adopts Ind-ASs. For an entity to have made the same determination of whether the arrangement contained a lease in accordance with previous GAAP, that determination would have to have given the same outcome as that resulting from applying Ind AS 17 Leases and Appendix C of Ind AS 17-.


  5. #25
    IND-AS
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    Thumbs up Employee benefits of Indian Accounting Standard (Ind-AS) 101 - First-time Adoption of Indian Accounting Standards

    Employee benefits of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards

    Appendix - D


    Employee benefits

    D10. [Refer to Appendix 1]

    D11. An entity may disclose the amounts required by paragraph 120A(p) of Ind AS 19 as the amounts are determined for each accounting period prospectively from the date of transition to Ind -ASs.

    D11A. Ind AS 19 requires recognition of actuarial gains and losses for post employment defined benefit plans and other long -term employment benefit plans in other comprehensive income immediately and are not reclassified to profit or loss in a subsequent period. However, a first-time adopter may elect to recognise all cumulative actuarial gains and losses subsequent to the date of transition to Ind -AS in other comprehensive income.


  6. #26
    IND-AS
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    Thumbs up Cumulative translation differences of Indian Accounting Standard (Ind-AS) 101 - First-time Adoption of Indian Accounting Standards

    Cumulative translation differences of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards

    Appendix - D


    Cumulative translation differences

    D12. Ind AS 21 requires an entity:

    (a) to recognise some translation differences in other comprehensive income and accumulate these in a separate component of equity; and

    (b) on disposal of a foreign operation, to reclassify the cumulative translation difference for that foreign operation (including, if applicable, gains and losses on related hedges ) from equity to profit or loss as part of the gain or loss on disposal.

    D13. However, a first-time adopter need not comply with these requirements for cumulative translation differences that existed at the date of transition to Ind-ASs. If a first-time adopter uses this exemption:

    (a) the cumulative translation differences for all foreign operations are deemed to be zero at the date of transition to Ind -ASs; and
    (b) the gain or loss on a subsequent disposal of any foreign operation shall exclude translation differences that arose before the date of transition to Ind-ASs and shall include later translation differences.

    D13A. On the date of transition, if there are long -term monetary assets or long term monetary liabilities mentioned in paragraph 29A of Ind AS 21, an entity may exercise the option mentioned in that paragraph either retrospectively or prospectively. If this option is exercised prospectively, the accumulated exchange differences in respect of those items are deemed to be zero on the date of transition.


  7. #27
    IND-AS
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    Thumbs up Investments in subsidiaries, jointly controlled entities and associates of Indian Accounting Standard (Ind-AS) 101

    Investments in subsidiaries, jointly controlled entities and associates of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards

    Appendix - D


    Investments in subsidiaries, jointly controlled entities and associates

    D14. When an entity prepares separate financial statements, Ind AS 27 requires it to account for its investments in subsidiaries, jointly controlled entities and associates either:

    (a) at cost; or
    (b) in accordance with Ind AS 39.

    D15. If a first-time adopter measures such an investment at cost in accordance with Ind AS 27, it shall measure that investment at one of the following amounts in its separate opening Ind-AS Balance Sheet:

    (a) cost determined in accordance with Ind AS 27; or
    (b) deemed cost. The deemed cost of such an investment shall be its:

    (i) fair value (determined in accordance with Ind AS 39 ) at the entity’s date of transition to Ind-ASs in its separate financial statements; or
    (ii) previous GAAP carrying amount at that date.

    A first-time adopter may choose either (i) or (ii) above to measure its investment in each subsidiary, jointly controlled entity or associate that it elects to measure using a deemed cost.


  8. #28
    IND-AS
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    Thumbs up Assets and liabilities of subsidiaries, associates and joint ventures of Indian Accounting Standard (Ind-AS) 101

    Assets and liabilities of subsidiaries, associates and joint ventures of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards

    Appendix - D


    Assets and liabilities of subsidiaries, associates and joint ventures

    D16. If a subsidiary becomes a first -time adopter later than its parent, the subsidiary shall, in its financial statements, measure its assets and liabilities at either:

    (a) the carrying amounts 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; or

    (b) the carrying amounts required by the rest of this Ind -AS, based on the subsidiary’s date of transition to Ind -ASs. These carrying amounts could differ from those described in (a):

    (i) when the exemptions in this Ind-AS result in measurements that depend on the date of transition to Ind-ASs.
    (ii) when the accounting policies used in the subsidiary’s financial statements differ from those in the consolidated financial statements. For example, the subsidiary may use as its accounting policy the cost model in Ind AS 16 Property, Plant and Equipment, whereas the group may use the revaluation model.
    A similar election is available to an associate or joint venture that becomes a first-time adopter later than an entity that has significant influence or joint control over it.

    D17. However, if an entity becomes a first -time adopter later than its subsidiary (or associate or joint venture) the entity shall, in its consolidated financial statements, measure the assets and liabilities of the subsidiary (or associate or joint venture) at the same carrying amounts as in the financial statements of the subsidiary (or associate or joint venture), after adjusting for consolidation and equity accounting adjustments and for the effects of the business combination in which the entity acquired the subsidiary.


  9. #29
    IND-AS
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    Thumbs up Compound financial instruments of Indian Accounting Standard (Ind-AS) 101 - First-time Adoption of Indian Accounting Standards

    Compound financial instruments of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards

    Appendix - D


    Compound financial instruments

    D18. Ind AS 32 Financial Instruments: Presentation requires an entity to split a compound financial instrument at inception into separate liability and equity components. If the liability component is no longer outstanding, retrospective application of Ind AS 32 involves separating two portions of equity. The first portion is in retained earnings and represents the cumulative interest accreted on the liability component. The other portion represents the original equity component. However, in accordance with this Ind-AS, a first-time adopter need not separate these two portions if the liability component is no longer outstanding a t the date of transition to Ind-ASs.


  10. #30
    IND-AS
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    Thumbs up Designation of previously recognised financial instruments of Indian Accounting Standard (Ind-AS) 101

    Designation of previously recognised financial instruments of Indian Accounting Standard (Ind-AS) 101

    First-time Adoption of Indian Accounting Standards

    Appendix - D


    Designation of previously recognised financial instruments

    D19. An entity is permitted to designate financial asset and liability in accordance with Ind AS 39 as on the date of transition to Ind -AS’s. Accordingly

    (a) an entity is permitted to make an available -for-sale designation at the date of transition to Ind-ASs.
    (b) an entity is permitted to designate, at the date of transition to Ind - ASs, any financial asset or financial liability as at fair value through profit or loss provided the asset or liability meets the criteria as per Ind AS 39 at that date.

    D19A. Financial instruments carried at amortised cost should be measured in accordance with Ind-AS 39 from the date of recognition of financial instruments unless it is impracticable (as defined in Ind AS 8) for an entity to apply retrospectively the effective interest method or the impairment requirements in paragraphs 58 –65 and AG84–AG93 of Ind AS 39.If it is impracticable then the fair value of the financial asset at the date of transition to Ind-ASs shall be the new amortised cost of that financial asset at the date of transition to Ind -ASs.

    D19B. Financial instruments measured at fair value shall be measured at fair value as on the date of transition to Ind-AS.


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