MCA notified the Companies (Indian Accounting Standards) Amendment Rules, 2023

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2023, which modify the provisions of the Companies (Indian Accounting Standards) Rules, 2015. These amendments will come into effect on April 01, 2023, as per the MCA’s notification dated March 31, 2023.

The changes include the following:

Ind AS 101 First-time Adoption of Indian Accounting Standards: A new paragraph B14 has been added to Appendix B, which requires a first-time adopter to recognize a deferred tax asset at the date of transition to Ind ASs, to the extent that taxable profit will be available against which the deductible temporary difference can be utilized.

Ind AS 12 Income Taxes: Paragraph 15 has been revised to require the recognition of a deferred tax liability for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that does not give rise to equal taxable and deductible temporary differences. Also, entities applying Deferred Tax related to Assets and Liabilities arising from a single transaction must recognize a deferred tax asset and liability, and the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings.

Ind AS 103 Business Combination: Clause (b) of Paragraph 13 of Appendix C, which relates to the disclosure of the date on which control is obtained in a business combination, has been revised to refer to “the date on which the transferee obtains control of the transferor.”

Ind AS 107 Financial Instruments Disclosures: A new paragraph 21 has been added to require the disclosure of the measurement basis for financial instruments used in preparing the financial statements.

Ind AS 1 Presentation of Financial Statements: In Paragraph 10, the words “significant accounting policies” have been replaced with “material accounting policy information” for the complete set of financial statements. Paragraph 117 has been revised to require the disclosure of material accounting policy information that can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make. Paragraphs 117A to 117E have been added to clarify the materiality of accounting policy information and to explain that immaterial accounting policy information need not be disclosed and must not obscure material accounting policy information. Finally, Paragraphs 118 to 121 have been omitted.