IND AS EYE

We will discuss about the accounting treatment of upfront fee/loan processing fee paid. IGAAP: Accounting standard 16 : Borrowing costs Borrowing costs are interest and other costs incurred by an enterprise in connection with the borrowing of funds/amount. Borrowing costs may include:  (a) interest and commitment charges on bank borrowings and other short-term and long-term borrowings;  (b) amortization of discounts or premiums relating to borrowings;  (c) amortization of ancillary costs incurred in connection with the arrangement of borrowings;  (d) finance charges in respect of assets acquired under finance leases or under other similar arrangements; and  (e) exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs Upfront fee/processing fee are  recognized as an expense in the period in which they are incurred. However, to the exte...

                    Discounting of Security Deposit There are two types of deposits available 1. Interest free deposits 2. Deposits having interest. As per Ind AS 109, Interest free security deposits are discounted to bring it to the present value..The whole Ind AS speaks about Fair value. Evaluation: A company receives a security deposit as per the terms of agreement and repays the same when the agreement is ended/terminated i.e. after 5 years. For the period of 5 years the company has the company and as per the time value of money the amount repaid after 5 years is not the same amount which is received now. It involves time factor. In order to bring it to the fair value, security deposit is discounted using the Incremental borrowing rate. The difference between the discounted amount and the amount received will be accounted as income received in advance. Such amount will be transferred to p&l (in...

                           Changes in CARO,  2020                       I. Non - current assets Verification of the title deeds of the immovable properties and it’s disclosure in the financial statements Specific format for maintaining the details of the fixed assets (PPE). In case of revaluation of Property, Plant and Equipment or intangible assets, whether the revaluation is based on the valuation made by a Registered Valuer, if the change is 10% or more of the net carrying value. II. Inventory In case of working capital loan based on current assets in excess of 5 crore rupees is sanctioned from the financial institutions, the quarterly returns or statements filed by the company are in agreement with the books of accounts, if not, give details. III. Investments, loans or advances by company In case of any investments, provision of lo...