Convergence to IND AS 16

Download or read book Convergence to IND AS 16 written by Poonam Dugar and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: With integrated global economies and cross-border mergers and acquisitions, uniformity of financial reporting by Indian companies is inevitable for the authenticity of their financial statements worldwide. The emergence of International Financial Reporting Standards (IFRS) marks the biggest revolution in financial reporting, though not without posing challenges of convergence in India. In order to harmonize with the financial reporting worldwide, the Institute of Chartered Accountants of India (ICAI) has issued 35 IND AS -- the converged accounting standards which are in line with IFRS subject to certain carve outs (differences) due to tax-related issues, as notified by the Ministry of Corporate Affairs. With reference to this convergence, this paper provides an insight into the revised framework of AS 6 -- Depreciation and AS 10 -- Fixed Assets, with the formation of new IND AS 16 -- Property, Plant and Equipment (PPE) and its implications through various illustrations. Moreover, the issues of recognition of assets are explained through different models of measurement, determination of their carrying amounts, accounting treatment of revaluation and depreciation charges on the assets. The analysis shows that adaptation to IFRS convergence opens new avenues for the accounting profession, followed by unforeseeable challenges. The analysis of the standard concludes that significant parts (components) of a PPE can be recognized, depreciated and derecognized separately and individually. There will be major changes in the value of PPE in the financial statements due to treatment of revaluation surplus.