MCA Notifies Companies (Indian Accounting Standards) Amendment Rules, 2020
Table of Contents
MCA Notifies Companies (Indian Accounting Standards) Amendment Rules, 2020.
The Central Government in the exercise of powers conferred under Section 133 read with Section 469 of the Companies Act, 2013, in consultation with the National Financial Reporting Authority (NFRA), hereby makes the following amendments in the Companies (Indian Accounting Standards) Rules, 2015
Paragraph 3 of the IAS is substituted with the following
“3 An entity shall determine whether a transaction or other event is a business combination by applying the definition in this Ind AS, which requires that the assets acquired and liabilities assumed constitute a business. If the assets acquired are not a business, the reporting entity shall account for the transaction or other event as an asset acquisition. Paragraphs B5–B12D provides guidance on identifying a business combination and the definition of a business.”;
Related Topic:
In case of conflict, can the Provisions of Income Tax Act prevail over Accounting Standards ?
A new paragraph is inserted after paragraph 64O
“64P Definition of a Business (Amendments to Ind AS 103), added paragraphs B7A–B7C, B8A and B12A– B12D, amended the definition of the term ‘business‘ in Appendix A, amended paragraphs 3, B7–B9, B11, and B12 and deleted paragraph B10. An entity shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after the 1st April 2020 and to asset acquisitions that occur on or after the beginning of that period.”;
The definition of “business” has been amended
“business An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing goods or services to customers, generating investment income (such as dividends or interest) or generating other income from ordinary activities.”;
In appendix B following amendments has been made
Paragraph B7 has been amended
After Paragraph B7 a new paragraph on “Optional test to identify the concentration of fair value” has been inserted
The definition of “Elements of a Business” has been amended
The definition of “Assessing whether an acquired process is substantive” has been amended
after paragraph B12, B12A, B12B, B12C & B12D has been inserted
The definition of “Uncertainty arising from interest rate benchmark reform” has been inserted
All definitions shall come into effect from the date of publication of this notification.
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