Taxmann's Illustrated Guide to Indian Accounting Standards (Ind AS)

Preface to Seventh Edition We all know that a few years have elapsed after International Financial Reporting Standards (IFRSs) have reached the shores of India in its new avatar in the form of Indian Accounting Standards (Ind ASs).

After initial notification of Ind ASs, Ministry of Corporate Affairs have come up with amendments from time to time with a view to ensure that these Ind ASs are internalised and tailored to Indian conditions and there is a clear roadmap going forward.

The impact of the implementation of Ind ASs in various industry sectors have been varied as has been borne out of publications and reports in the public domain from various institutions.

A

This edition of the book professes to address the following areas: B

( ) incorporate the latest amendments under Companies (Indian Accounting Standards) (Amendment) Rules, 2022,

C

( ) come up with process flow diagrams of major Ind ASs to help the reader understand and comprehend the nuances of each Ind AS in its simplest form,

D

( ) deep dive into Indian Accounting Standards (Ind ASs) and its convergence with IAS/IFRSs updated with latest notified amendments in each of the Ind ASs with charts, illustrations and case studies, E

( ) incorporate definitions and application guidance in critical chapters, ( ) provide detailed comparison of Indian Accounting Standards (Ind ASs) with amended Accounting Standards (AS) where applicable, I-7

. / ) 4 ) $ % ( 4 . % 6 % 3 / 4 % # ! & % 2 0

I-8

F

G

( ) major amendments in Schedule III of Companies Act, 2013 with updated text of Schedule III, ( ) Case studies on disclosure of Accounting Policies.

In developing this work, references have been made from time to time to the notified text on Ind ASs and AS published

by Ministry of Corporate Affairs, The Institute of Chartered Accountants of India publications on Indian Accounting Standards (Ind AS), and adaptations from ACCA UK. We have also added a lot more illustrations under respective chapters based on practical issues and questions.

We would like to take this opportunity to thank our readers for providing overwhelming support in the first six editions of this book.

While considerable care has been taken to ensure that the contents of the book are accurate, a few errors and omissions might have crept in, for which we would request our readers with all humility to bear with us.

We would like to dedicate this book to our family members without whose constant inspiration this would not have been possible.

B.D. CHATTERJEE JINENDER JAIN

Contents % ' !

0

About the authors

I-5

Preface to Seventh edition

I-7

Major amendments in Schedule III (Division II and III)

I-15

CHAPTER 1

Financial Reporting in India and Conceptual Framework for Financial Reporting

1

CHAPTER 2

Indian Accounting Standards (Ind AS) Summary

16

CHAPTER 3

Ind AS 1 : Presentation of Financial Statements and Schedule III

73

CHAPTER 4

Ind AS 2 : Inventories

182

CHAPTER 5

Ind AS 7 : Statement of Cash Flows

198

CHAPTER 6

Ind AS 8 : Accounting policies, changes in Accounting estimates and errors

225

CHAPTER 7

Ind AS 10 : Events occurring after the reporting period

I-9

252

3 4 . % 4 . / #

I-10 % ' !

0

CHAPTER 8

Ind AS 12 : Income Taxes

268

CHAPTER 9

Ind AS 16 : Property, Plant and Equipment

321

CHAPTER 10

Ind AS 17 : Leases

361

CHAPTER 11

Ind AS 19 : Employee benefits

362

CHAPTER 12

Ind AS 20 : Accounting for Government Grants and Disclosure of Government Assistance

406

CHAPTER 13

Ind AS 21 : The Effects of changes in foreign exchange rates

419

CHAPTER 14

Ind AS 23 : Borrowing costs

445

CHAPTER 15

Ind AS 24 : Related Party Disclosures

455

CHAPTER 16

Ind AS 27 : Separate Financial Statements

469

CHAPTER 17

Ind AS 28 : Investments in associates and Joint Ventures

479

CHAPTER 18

Ind AS 29 : Financial reporting in hyperinflationary economies

499

CHAPTER 19

Ind AS 32 : Financial Instruments : Presentation

507

3 4 . % 4 . / #

I-11

% ' !

0

CHAPTER 20

Ind AS 33 : Earnings per share

551

CHAPTER 21

Ind AS 34 : Interim Financial Reporting

583

CHAPTER 22

Ind AS 36 : Impairment of Assets

601

CHAPTER 23

Ind AS 37 : Provisions, contingent liabilities and contingent assets

655

CHAPTER 24

Ind AS 38 : Intangible Assets

696

CHAPTER 25

Ind AS 40 : Investment Property

739

CHAPTER 26

Ind AS 41 : Agriculture

749

CHAPTER 27

Ind AS 101 : First time adoption of Indian Accounting Standards

758

CHAPTER 28

Ind AS 102 : Share based payment

825

CHAPTER 29

Ind AS 103 : Business Combinations

874

CHAPTER 30

Ind AS 104 : Insurance contracts

941

CHAPTER 31

Ind AS 105 : Non-current Assets held for sale and discontinued operations

965

3 4 . % 4 . / #

I-12 % ' !

0

CHAPTER 32

Ind AS 106 : Exploration for and evaluation of mineral resources

994

CHAPTER 33

Ind AS 107 : Financial Instruments: Disclosures

1000

CHAPTER 34

Ind AS 108 : Operating Segments

1047

CHAPTER 35

Ind AS 109 : Financial Instruments

1065

CHAPTER 36

Ind AS 110 : Consolidated Financial Statements

1180

CHAPTER 37

Ind AS 111 : Joint Arrangements

1215

CHAPTER 38

Ind AS 112 : Disclosure of Interests in Other Entities

1235

CHAPTER 39

Ind AS 113 : Fair Value Measurement

1253

CHAPTER 40

Ind AS 114 : Regulatory Deferral Accounts

1301

CHAPTER 41

Ind AS 115 : Revenue from Contracts with Customers

1317

CHAPTER 42

Ind AS 116 : Leases

1398

CHAPTER 43

Case Studies on Disclosure of Accounting Policies

1458

3 4 . % 4 . / #

I-13

% ' !

0

ANNEXURE COMPARATIVE SUMMARY BETWEEN IND AS AND AS

1569

C

14

H

A

P

T

E

R

IND AS 23 : BORROWING COSTS /ŶĚ ^ Ϯϯ͗ ŽƌƌŽǁŝŶŐ ŽƐƚƐ

Scope

ĞĮŶŝƟŽŶƐ

ĐĐŽƌĚŝŶŐ ƚŽ ƚŚĞ /ŶĚ ^͕ ĂŶ ĞŶƟƚLJ ƐŚĂůů ĐĂƉŝƚĂůŝƐĞ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ƚŚĂƚ ĂƌĞ ĚŝƌĞĐƚůLJ ĂƩƌŝďƵƚĂďůĞ ƚŽ ƚŚĞ ĂĐƋƵŝƐŝƟŽŶ͕ ĐŽŶƐƚƌƵĐƟŽŶ Žƌ ƉƌŽĚƵĐƟŽŶ ŽĨ Ă ƋƵĂůŝĨLJŝŶŐ ĂƐƐĞƚ ĂƐ ƉĂƌƚ ŽĨ ƚŚĞ ĐŽƐƚ ŽĨ ƚŚĂƚ ĂƐƐĞƚ͘ KƚŚĞƌ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ƐŚŽƵůĚ ďĞ ƌĞĐŽŐŶŝƐĞĚ ĂƐ ĂŶ ĞdžƉĞŶƐĞ ŝŶ ƚŚĞ ƉĞƌŝŽĚ ŝŶ ǁŚŝĐŚ ƚŚĞLJ ĂƌĞ ŝŶĐƵƌƌĞĚ͘

ZĞĐŽŐŶŝƟŽŶ

Borrowing costs eligible for capiƚĂůŝƐĂƟŽŶ

Borrowing Costs Eligible for ĂƉŝƚĂůŝƐĂƟŽŶ dŽ ƚŚĞ ĞdžƚĞŶƚ ƚŚĂƚ ĨƵŶĚƐ ĂƌĞ ďŽƌƌŽǁĞĚ ƐƉĞĐŝĮĐĂůůLJ ĨŽƌ ƚŚĞ ƉƵƌƉŽƐĞ ŽĨ ŽďƚĂŝŶŝŶŐ Ă ƋƵĂůŝĨLJŝŶŐ ĂƐƐĞƚ͕ ƚŚĞ ĂŵŽƵŶƚ ŽĨ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ĞůŝŐŝďůĞ ĨŽƌ ĐĂƉŝƚĂůŝƐĂƟŽŶ ŽŶ ƚŚĂƚ ĂƐƐĞƚ ƐŚŽƵůĚ ďĞ ĚĞƚĞƌŵŝŶĞĚ ĂƐ ƚŚĞ ĂĐƚƵĂů ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ŝŶĐƵƌƌĞĚ ŽŶ ƚŚĂƚ ďŽƌƌŽǁŝŶŐ ĚƵƌŝŶŐ ƚŚĞ ƉĞƌŝŽĚ ůĞƐƐ ĂŶLJ ŝŶĐŽŵĞ ŽŶ ƚŚĞ ƚĞŵƉŽƌĂƌLJ ŝŶǀĞƐƚŵĞŶƚ ŽĨ ƚŚŽƐĞ ďŽƌƌŽǁŝŶŐƐ͘ dŽ ƚŚĞ ĞdžƚĞŶƚ ƚŚĂƚ ĨƵŶĚƐ ĂƌĞ ďŽƌƌŽǁĞĚ ŐĞŶĞƌĂůůLJ ĂŶĚ ƵƐĞĚ ĨŽƌ ƚŚĞ ƉƵƌƉŽƐĞ ŽĨ ŽďƚĂŝŶŝŶŐ Ă ƋƵĂůŝĨLJŝŶŐ ĂƐƐĞƚ͕ ƚŚĞ ĂŵŽƵŶƚ ŽĨ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ĞůŝŐŝďůĞ ĨŽƌ ĐĂƉŝƚĂůŝƐĂƟŽŶ ƐŚŽƵůĚ ďĞ ĚĞƚĞƌŵŝŶĞĚ ďLJ ĂƉƉůLJŝŶŐ Ă ĐĂƉŝƚĂůŝƐĂƟŽŶ ƌĂƚĞ ƚŽ ƚŚĞ ĞdžƉĞŶĚŝƚƵƌĞ ŽŶ ƚŚĂƚ ĂƐƐĞƚ͘ dŚĞ ĐĂƉŝƚĂůŝƐĂƟŽŶ ƌĂƚĞ ƐŚŽƵůĚ ďĞ ƚŚĞ ǁĞŝŐŚƚĞĚ ĂǀĞƌĂŐĞ ŽĨ ƚŚĞ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ĂƉƉůŝĐĂďůĞ ƚŽ ƚŚĞ ďŽƌƌŽǁŝŶŐƐ ŽĨ ƚŚĞ ĞŶƚĞƌƉƌŝƐĞ ƚŚĂƚ ĂƌĞ ŽƵƚƐƚĂŶĚŝŶŐ ĚƵƌŝŶŐ ƚŚĞ ƉĞƌŝŽĚ͕ ŽƚŚĞƌ ƚŚĂŶ ďŽƌƌŽǁŝŶŐƐ ŵĂĚĞ ƐƉĞĐŝĮĐĂůůLJ ĨŽƌ ƚŚĞ ƉƵƌƉŽƐĞ ŽĨ ŽďƚĂŝŶŝŶŐ Ă ƋƵĂůŝĨLJŝŶŐ ĂƐƐĞƚ͘ dŚĞ ĂŵŽƵŶƚ ŽĨ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ĐĂƉŝƚĂůŝƐĞĚ ĚƵƌŝŶŐ Ă ƉĞƌŝŽĚ ƐŚŽƵůĚ ŶŽƚ ĞdžĐĞĞĚ ƚŚĞ ĂŵŽƵŶƚ ŽĨ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ŝŶĐƵƌƌĞĚ ĚƵƌŝŶŐ ƚŚĂƚ ƉĞƌŝŽĚ͘

Commencement ŽĨ ĐĂƉŝƚĂůŝƐĂƟŽŶ ĞƐƐĂƟŽŶ ŽĨ ĐĂƉŝƚĂůŝƐĂƟŽŶ

Commencement of capitalŝnjĂƟŽŶ Ͳ ĐŽŶĚŝƟŽŶƐ (aͿ ĞdžƉĞŶĚŝƚƵƌĞ ĨŽƌ ƚŚĞ ĂĐƋƵŝƐŝƟŽŶ͕ ĐŽŶƐƚƌƵĐƟŽŶ Žƌ ƉƌŽĚƵĐƟŽŶ ŽĨ Ă ƋƵĂůŝĨLJŝŶŐ ĂƐƐĞƚ ŝƐ ďĞŝŶŐ ŝŶĐƵƌƌĞĚ͖ (bͿ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ĂƌĞ ďĞŝŶŐ ŝŶĐƵƌƌĞĚ͖ ĂŶĚ (cͿ ĂĐƟǀŝƟĞƐ ƚŚĂƚ ĂƌĞ ŶĞĐĞƐƐĂƌLJ ƚŽ ƉƌĞƉĂƌĞ ƚŚĞ ĂƐƐĞƚ ĨŽƌ ŝƚƐ ŝŶƚĞŶĚĞĚ ƵƐĞ Žƌ ƐĂůĞ ĂƌĞ ŝŶ ƉƌŽŐƌĞƐƐ͘ ĞƐƐĂƟŽŶ ŽĨ ĂƉŝƚĂůŝƐĂƟŽŶ ĂƉŝƚĂůŝƐĂƟŽŶ ŽĨ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ƐŚŽƵůĚ ĐĞĂƐĞ ǁŚĞŶ ƐƵďƐƚĂŶƟĂůůLJ Ăůů ƚŚĞ ĂĐƟǀŝƟĞƐ ŶĞĐĞƐƐĂƌLJ ƚŽ ƉƌĞƉĂƌĞ ƚŚĞ ƋƵĂůŝĨLJŝŶŐ ĂƐƐĞƚ ĨŽƌ ŝƚƐ ŝŶƚĞŶĚĞĚ ƵƐĞ Žƌ ƐĂůĞ ĂƌĞ ĐŽŵƉůĞƚĞ͘ tŚĞŶ ƚŚĞ ĐŽŶƐƚƌƵĐƟŽŶ ŽĨ Ă ƋƵĂůŝĨLJŝŶŐ ĂƐƐĞƚ ŝƐ ĐŽŵƉůĞƚĞĚ ŝŶ ƉĂƌƚƐ ĂŶĚ Ă ĐŽŵƉůĞƚĞĚ ƉĂƌƚ ŝƐ ĐĂƉĂďůĞ ŽĨ ďĞŝŶŐ ƵƐĞĚ ǁŚŝůĞ ĐŽŶƐƚƌƵĐƟŽŶ ĐŽŶƟŶƵĞƐ ĨŽƌ ƚŚĞ ŽƚŚĞƌ ƉĂƌƚƐ͕ ĐĂƉŝƚĂůŝƐĂƟŽŶ ŽĨ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ŝŶ ƌĞůĂƟŽŶ ƚŽ Ă ƉĂƌƚ ƐŚŽƵůĚ ĐĞĂƐĞ ǁŚĞŶ ƐƵďƐƚĂŶƟĂůůLJ Ăůů ƚŚĞ ĂĐƟǀŝƟĞƐ ŶĞĐĞƐƐĂƌLJ ƚŽ ƉƌĞƉĂƌĞ ƚŚĂƚ ƉĂƌƚ ĨŽƌ ŝƚƐ ŝŶƚĞŶĚĞĚ ƵƐĞ Žƌ ƐĂůĞ ĂƌĞ ĐŽŵƉůĞƚĞ

445

Disclosure Ŷ ĞŶƟƚLJ ƐŚĂůů ĚŝƐĐůŽƐĞ͕ (aͿ ƚŚĞ ĂŵŽƵŶƚ ŽĨ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ĐĂƉŝƚĂůŝƐĞĚ ĚƵƌŝŶŐ ƚŚĞ ƉĞƌŝŽĚ͕ ĂŶĚ (bͿ ƚŚĞ ĐĂƉŝƚĂůŝƐĂƟŽŶ ƌĂƚĞ ƵƐĞĚ ƚŽ ĚĞƚĞƌŵŝŶĞ ƚŚĞ ĂŵŽƵŶƚ ŽĨ ďŽƌƌŽǁŝŶŐ ĐŽƐƚƐ ĞůŝŐŝďůĞ ĨŽƌ ĐĂƉŝƚĂůŝƐĂƟŽŶ͘

S T S O C G N I W O R R O B R O F G N I T N U O C C A N I D R A D N A T 3 S I H T Y L P P A L L A H S Y T I T N E N !

Y T I U Q E F O T S O C D E T U

PY T ML I II B RA OI L LA A US T A C AD E El HS I T S A HL T C I WT O LN A EA L DT I TP O A NC SD E E OR R DE F DE RR A DP NG N AI T D 3 U L EC HN 4I

Y L T C E R I D S T S O CF GO NN I O WI T OC RU R OD O BR OP T DR RO A N DO I NT AC T U 3 R T ES HN T O YC L P N PO AI T OI T S I DU EQ R C I A U QE EH R T TO O T NE SL I B YA T T I U T N B I ER T NT !A

L A C I G O L O I B A E L P MR AO X E R O F E U L A V

R I A F 3 T! A D DN E) R F UO SE A EP O MC TS E E S H S T A N GI NH I T Y I F I W L A T UE S QS AA

E G R A L N I D E C U D O R P E S I W R E H T O R O D E R

US T I C S AA F UB E NV AI T MT I E EP R A E TR A A HN T SO E S I E R I OI T T T N N EA VU NQ I

b

3 4 3 / # ' . ) 7 / 2 2 / "

3 ! $ . )

F NO OT I T S I O S I C U QE CH ATE F S O N ET E HR P T AX E OPN T MA RS EO L A F B T D AE T E S U S S I BA N I R G GO T T N C A I Y E F R I YL E L AR T U C A EQS R T I A S D O F O C EN G R N A OI I T W TC O A UR HD R T OO RB SP T R S R E OO H CN T / O GT I T NC E I S WUS R OT A RS T R N A OO H "C T Agriculture

a

N I E S I R P R E T N E N A Y B D E R R U C NA I R SA T S P O

CS RD E N HU T F O F DO NG AN TI S W E O R R E R T O N I B EE R H A T H T I W N O I T C E N N O C

E D U L C N I Y A M S T S O C G N I W O R R O "

S A D O H T E M T S E R E T N I E V I T C E F F E E H T G N I S U D E T A L U C L A C E S N EN PI XD EE TB S I E R R C E S T E N D I

H T I W E C N A D R O C C A N I D E S I N G O C E R S E I T I L I B A I L E S A ED L N FA O T C E P S E R

N I

T3 S E !

R E D T N N ) I

S OT T S SO G C NT I S WE OR E RT R N OI BO YT CT NN EE R M R T US CU J ND GA I E N R A OS F A MD OE RD F R A GG NE I S R I R E A R EA CY NE H ET R E T F A F H I D T T EN GE NT AX HE CE XH ET leases

446 Para 14.3

14.1 Core principle

14.2 Scope

14.3 Definitions

Borrowing costs

Ind AS 109, Financial Instruments,

W O L E B T R A H C E H T N I D E N I A L P X E E R A S T S O C G N I W O R R O B F O S L I A T E $

3 . / ) 4 ) . ) & % $

E D U L C N I S T S O C G N I W O R R O "

S G N I W O R R O B D N A S T F A R D R E V O K N A B N O T S E R E T N I

Para 14.3 447

Ind AS 23 : Borrowing costs

S E I T I L I B A I L E S A E L O T D E T A L E R T S E R E T N I

T S U J D A S A S G N I W O R R O B Y C N E R R U C N G I E R O F N OT S ES CO NC ET R S E E F R F E I T D EN GI NO AT HT CN XE EM -

G N I S WT S OO RC R O "

EY CC NN EE S R RG E R F N UI F ICW D NO EG R GI NER ARO HOB CF XN %/

O T S DI E EI T T L A I L B E A R I TL S E E S R A E E T L N )

K N S A G BSN T I NF A W OR O TD S R RR E E R VO E /B T N )

T E G O T E M I T F O D O I R E P L A I T N A T S B U S S E A KR AA T P

T A E HL T A TS E R S O S A E NS AU D SE I D N E T N I S T I R O F Y D A E !R qualifying asset

G N I Y F I L A U Q E B Y A M G N I W O L L O F E H T F O Y N A S E C N A T S M U C R I C E H T N O G N I D

NS T EE PS ES $A

ETG A S N I H I WT Y F RSI T E L E A HS U T S O !Q T RS O OT N E S E DS R EA A R UGD T NE C I R Y AF I F U IQ UL NAC U AQ A MT N OE EN H R A EW R E TA L A A HES T MR IO ST S E E FS I E R I T OOU I D T L I S N S C OD T E I E E A I N VRD T E A F R NP N L N E I P E TT O S P R D G I T O N N T E R NOI A S S H I P AS S R R T R I A E N T S U E E T N E N A SAH T L I E L E R C T R P E B G E A M O F S I R VO R S T U R G T E N E AOF S N R E E N W A A LDY V A O T V E A E D N N N M P I B C CA I I I S NUET ADRE O I ES NR S R &P A A a

b

c

d

e

f

S ET BN OE T M DS T EU R I J U D QA EE R EH CT NT EA R G E N F F I I V D I R ER GA N AF HO CR XE EN N OA T DM RE A R GHE ETD R SN HT U S T I OS WC A E GB !N I L L AWA R OH A RS PR N OI OB E T R GSE NAH I T D D RED OT E T CAA E CR T !T S

3 4 3 / # ' . ) 7 / 2 2 / "

3 ! $ . )

448 Para 14.6

E D E HB E T R A EP OC T N M TE N O R EE C L F A N F VI E I D H U E W QH ET Y SDC I N E HE EY R CC I C XRN H U E CE WT R OLR TN A N NU USO C OEI T N MOC G D I NE AS R NSUO F O AL NF I FEG A O G N NNI EA I BH W G N O CR DX I L R W U OEOO R HEBR H ST FO O THT B N C F S EI OO MHC T TWES S OHO UT TC J T D NE ANE H E ET T EX WO HE TT T )

-

N ESS T ANMAE SUADR E R A S E S O T I D EN N H I EDT GO T E A T S FOT I C EL O EN R ANR T E E OYM SRI LT I T HAASS U L S U CI S OJ I I NV H D E A EA R WE R R T N PA SHR S TOSS OY L TSA O L N L D ET GNEES E NEMHI AUETN F L HQT G O CET O T XSE C EBSNE U E R DSET E H X EDT EB S I O LNFES O A A HL E TT A T R C OD NSE E L PTU UR N S E I O E NT A H ANRG I S NET SOI I HN ETNTE I T R A N GM E N T HEGI S T MDW U EOJ TS ES R D UI E LRA R J A HD ON EB WA A R ) )

-

14.4 Recognition of borrowing costs

EA R F A TO A N HO T I T SC T U S D OO CR GP NR I WO ON RO R I OT BC U

T ERE T S S S I L S N A OA T I T CA P A H N CO T F LI L TO I A S T HI S SU O QC YC T I AE T H N T EEF H NTO T OR AT A EP L AB S R AA A T T PUE BS OR I S T TA GTG NAN I I Y D Y L RT F OCI L E A CR CI U !D Q D O I R E P E H T N I E S N E P X E N A S A D E S I N G O C E R E B D L U

OD HE SR R SU T S C ON CI E GR NA I WY E OH RT R OH BC I R EH HW T N /I

14.5 Borrowing Costs Eligible for Capitalisation

FRGE O O H N I T EFW N E S L OO OB RE PI R G RI OM UL B O PE L C SA ET N U I HS T T OC Y N RCAA O G E F S NH S I T YW E L SL L O A A D R CR O DI lO ER I N E C B E IP PFM S

SOREG H E TT T N DN I G E EU W N D WO I O R E OMB R UR RA R O O DDB L G E BH U NE O I ETH S R O TSWH A O E RT T SSE R F DSS OO NASBT UGATN T N FI AE A HM TY H T F A IT T N HA L S NO T E UOD V TQ N N N E I OR EAI T Y TRR X U GA EN CA S I R NO IL EN I A HA I SP T T I T T P M S OB AOE 4OC CT

REI OH P F TA MEC N A EI HM G T R N ST I E Y E L EP S UDP LA DL A NH Y AS B YYN L TO L I A TI T R N A E S NEI

T LE EEA GHT S STIS DTPA A E T NS CA US H R FA OT SGF N WNEO I L OY S B RF E R IIR G OL I U BAL T U E I YQ D S T T N AS I T E N GOP EI NCX GE NI N NE AA I H TTWT B A OO HOR T T R FO E TO T N EBA ES FR T O O X N EPTO R N I EU T U HP A O T S I EML OH A 4T AT -

SEGGE T R HNNA S I I OTW N P CGO I E N AR GI T R P NR B R I U O O O WD BFT OG Y NOR RN R OEA S OI I OS T D BN A S PE L EA RC U HT UE CP T SL N FT A E U O C S

EO HE T S E I GEI RT T H I AR O E V T L R F A I P E YC T VTML M L A AH AO OA RC DT E C I E FF HE Y I T E T T C R H I D L A GT UEL N A P I L E E SYL EC E WEX A L EDLS A EHL AT I R HTL O T FAMN EOHSAE TS B SG S U LS NB GYI L NI TWU A D HIT E SWNOSD L I EOERT N R R T E NONT R A UN B A O R NB OTI S OLRTET E L S E I A VL I S T A R OEBAO S A W T G I C L F O N I A E T L I L T (P E Y I B S P F P A AD IS AC L A CI OSAT ELITUA P R S HP E OQH 4APC AT

LD

L A O HI SR DE OP I T RA E H PT AG GN NR I I R UU DD SD E E S R I R L U A T C I N P I AT CI YS T T I S T O N EC NG AN I TW A HO T R SR T O S OB CF GO NT I N WU OO RM R OA BE FH O TT N D UE OE C MX AE ET HO 4N

14.6 Commencement of capitalization - Conditions

R AO FF O E T TA S OD CT EN HE T M FE O C TN R E A PM SM A O SC T E S OH C4

GE NA T I WD OT RN R E OM BE GC NN I E S I M L A T M I P O AC CE H NT I G N EO BT LE L S A S HA SG YN T I I Y T F N I L EA NU !Q

T E S S A E H T R O F S E R U T I D N E P X E S R U C N I T I D N A

S T S O C G N I W O R R O B S R U C N I T I

S T I R O F T E S S A E H T E R A P E R P O T Y R A S S E C E N E R A T A H T S E

I E T I L V A I S T C R AO SE E S KU AD T R E E D DN NE UT N TI I

b

c

. / ) 4 ! : ) , !

4 ) 0 ! # & / . / ) 4 !

3 3 % #

G N I W O L L O F E H T F O L L A S T E E M T S R I F Y T I T N E E H T N E H W E T A D E H T S I N O I S T N A S O I I L T A I T D I N P AO CC a

Para 14.8 449

14.7 Suspension of capitalization

D E D N E T X E G N I R U D D E D N ED E PT SP UU SR ER E BT N DI L U S I OT HN SE SM T S P OO CL E GV NE I WD E OV RI R T OC BA FH O C I NH OW I T N A I S I S L A D T O I I P R AE #P

L TRT A I OODI N HE NE T CS N P O I A UD ST H S WD UB D S NEN U Y D I A L S N L DE T SA OT T U MO I E N R S R I E S S O S PT A E I DIDNR R T ERE O A DOT C NFENT T L EE SI P T E S N MO X S EA ODE NNC H AAYYW T L I D GEA L T NRI O N A I I TER R PR UE ANE DR PAP SPGRA T O GK N S E T NR I OY V I D O CR ER L UW O GA W H NS ODE I S S F V ( WEO T I S T OC

S O A N RET R C N R O T O SI O G S S T I BE CA NN I I RT I ESW I UIR L M V A OD A CT I T RA N I SP R ICT YASAOD AEOCBN MHC GA R T N H O L SC I YD F A S T U I C I N T I 3YLN A F E N I T L I EPE H A P S C L NU UA A E !S QCT S .

Y MD A EE T R AT NE ES HS WA N SA T S G ON CI T GT NE I G WF OO RS R S OE BC GO NR I P S I E L A H T T I P F AO CT DR NA EP PY SR E L UA A S SS S TE R O CO NE E SNS E OAU DSD E OID Y SA L N A L E E T YD N T I I T YS N R T A ER I R NOO !PF -

HED R GA E I V H L SO TL E A V HVN E T I DLN R O OE I I T R G A E E R PWL D A EHI C G DI H NH P EHA T R X CG EUO ESE HI FG T E G H E NG T I DI R N I UR D DB O SAI E R U E F NOP I N T NO N OT I OT I C CC U NUR RT OT I S T SN A NO S OC I L C A E T Y H I T A P L G AE N CD I R EL SU L P ED VN ME O AL XRM EE RTM OAO &WC

14.8 Cessation of capitalization

ER HO T E LS L U A YD L E L A D I N T E N T AN T I S BT S UI SR NO EF T HE WS S EA S G A EI N CY F DI L L U A OU HQ SE SH T T S OE CR A GP NE I R WP O RO T R OY

BR E AT FS E O SL E P NC OE M I T NO A C S S E I E L I R A T I A T V I I P E T L AC A #A S

E DSTR R NEA A AUP P N I E ST AR T N R OP A OT PCN O T NNOY I I O T I R A DT A L C EU S E T S R E R E L T NC P S I E MNSN T OOS S

CCO E E EC I T L SI T E I L HGIP V TW N I T E I M C S S DWAO O A E R EC GSRH E R NUOT I GBLA Y LE NFA F I O A L I L E A NYS L UBO L R QFI A O O T I T A AES E S LINU A FB L T A O AT S D NPIBE OAPUD A C S I C N T S C E ISN T UT TEN RR H R I T S AA S NPPWI T O RER SO CDE E A H F ETT ET HEO CR L T P E A D NMH P L U E T O T HC O A RH OS H 7AF T

DA EC S US I ET BR

S T NAR APA CHP C HA R CE E I H H HT CO WI FHN O WO HRS E CO AFU ETN I ET SS S N G O NAC I G D N N L I I O U Y I T BFC I L LA U A R UT R E QS V N EAO S FC GOE EI NL L I S PH I R W M PA E MX L B OEA CNS KAU RSG I A N PYI E L SL S AB E F NUO D I I S E V UI L B BD A NP !I

-

YHE NCM AIA H EWS R E OSH F E T E S N S BE I H ECT T OI E RW L PT P LN MA A ORL CEP V EE E BS H T OGF N T O I SV S DLT EOR EVA NNP I T TTN A N E HAR L T E P F TL F E I A S D I S R T A T A GS NUE D C I N N Y I EL F L I UI L N A AQM US E L S QI E NE ADI T ETS FS O UUA EEOS L A D B P EH I MNR C AAR XCAU E CS T R E E NA T R I !PA S

T S O C G N I W O R R O B F O N O I T A Z I L A T I P A #

S I T I D O I R E P E H T N I E S N E P X E S A D E Z I N G O C E R E B D L U O H S S T S O CR GO ND I E WR OR RU R C ON "I

R O N O I T C U R T S N NE OH CW ND OE I Z T I I L S A IT U I QP CA AC OE T B EN L B A AC T T U E BS I S R A T T G A N YI L Y TF C I L EA R I U D Q SA T S OF CO N GO NI I T WC OU RD R O OR "P

S T l E N E B C I M O N O C E E R U T U F N I T L U S E R L L I W Y E H T T A D HN T A EY L T B I AT BN OE RE PH ST I F TO I

E T A R T S E R E T N I E V I T C E F F E

Y L B A I L E R D E R

U S A E3 M! D EN B) R NE AP CS SA T D S OO CH T EE HM T

E S O L C S I D L L A H S Y T I T N E N A

A R A P O T G N I D R O C C !

D N A D O I R E P E H T G N I R U D D E S I L A T I P A C S T S O C G N I W O R R O B F O T N U O M A E H T

G N I W O R R O B F O T N U O M A E H T E N I M R E T E D N OO T I T DA ES S I L UA T EI T P A A R C NR OO I F T A E S L I B L I A G T I I L P E AS CT S EO HC T

a b

EI N R A E PR EA R PL E OA T S D EE DS EU ES NT I SRS E OS I F E T I R TG V I E T O S C R S !A P

b

S E I E T I S HT V T E I I L T E A R C R S O AA E F RE T EPT OL EE HR T EP SS P S L M LO A UO A DC YTGE N L Y L I R DE A Y A I NR F T S I EA L N S T A E AC N UI T S BEQ UN 3

G N I E B E R A S T S O C G ND I E WR OR RU R C ON "I

S YD T I O T N H ET NE AM YO BW T DS EW R R O UL L CA N I S T 3 S O! CD RN E ) H T S O D DN NU AF F TO S E G R N E I S T WS T N I OO RC SR A G DON EBI NEW H lT O EH R DT R IO SW B T S ONG N CO I I T GT CN NE U I WNO ONC ROC R CA ON F "I O

a

E R A S T E S S A E H T RG ON F I R R SU T S C OC #O

N E H W S P O T 3

N E H W S E C N E M M O #

3 4 3 / # ' . ) 7 / 2 2 / "

3 ! $ . )

T R A H C E H T N I D E N I A L P X E S I T S O C G N I W O R R O B F O N O I T A Z I L A T I P A C F O S S E C O R PW O EL HE 4B

450 Para 14.10

14.9 Accounting of borrowing costs

14.10 Disclosure

3 % ) $ 5 4 3 % 3 ! #

O NT I D E B3 I !

R C D S N E ) R PN I TD N E ED MD TA S UI S J D !

A EH HP T A R WG OA R HA O0 T

D SE A N EIR CME RD NE N AT U DE I DS U GEA E OBC NON T A SD SI E I DEU I G V O E RHH PPT AE R D G I AV 3R O !AR )PP

ND E D B ONE I AE T T D C L EL U UC PO Rl T FMH S NOOS OGCT S NES #I BO EK HOOC T OTG N BSI T TR 8E W A K O C PR R RIGO 4 E B NB I E N OH F I T O 4A C / MN T O N EI E R T T A Y Z NXL I N L OEO A E T SG I !R EP AHA MLTC O E T UTR A I

DA H8 D E T AT M T S E S L UT S R APII E MDS GO A N B T I NC O S I T T SE7C C UIHF/ RMTO

T F S U NIORT O ODST A I CAR D T D OU SSO E I E P DAP 7HE EO T HT FH O T4S

E U S S I S I H T N O N O I N I P O R U O Y E V I G T N A T N U O C C A N A S !

L E DA H EN T El D NE S N T S A S E H E OT C CL l GT I N F N I SW O I U TO GI NT R I AR K OHO3 OTB! F Y BA O D N TSN) E TO KO F I T CNA O I NZ S 4 IN AL ECA O I T HEI S T I P 7A V S O S DCR E L FP E N T O E E EH UL R DPET EMHO S 4T UO G C

E N ES ER I U BA D R DO TME D O E NUDCT NINCE ADEAL CATDP T N EM S I MES PO TPC UHI OE I T RT D FO R AO FSA T S S ES B R A EO TE HO O R 4D NA

E LG I R HE MNT I D DDN L L I U U U S HBOA T EWS I HDI WT T D ,M EN:R l CO YY NL E AT NH NC T lEAF P R GIMO E NDOR I NC E U BAET O C NLHU ONTT R F I O O T S I C T T T UC B B RUE E T RDD S T NS LE ONA H R COE 4 RCN

E ED DAG E S T NI EE UH HL GCTP I YM NH I BO D W C L DS I F E U I O C BL T NI AI A N NE SMl H A H SW I D TG S T T N E B ,E I R D L :DEI HU F4 B O

substantially

ready

`

2.

E R U T N E B E D M R E T G N O ,

`

N A O L N O I T C U R T S N O #

E M A S E H T T A D E U S S I E R E W

E R U T N E B E D D E T A N I D R O B U S M R E T G N O ,

S E R U T N E B E D D E T A N I D R O B U S D N A S E R U T N E B E D E EM HI 4T

-

Para 14.12 451

14.11 Convergence with IAS/IFRSs (Compansion with IAS 23)

i the adjustment should be of an amount which is equivalent to the extent to which the exchange loss does not exceed the difference between the cost of borrowing in functional currency when compared to the cost of borrowing in a foreign currency.

ii where there is an unrealised exchange loss which is treated as an adjustment to interest and subsequently there is a realised or unrealised gain in respect of the settlement or translation of the same borrowing, the gain to the extent of the loss previously recognised as an adjustment should also be recognised as an adjustment to interest.

14.12 Case studies

1.

Required:

^ŽůƵƟŽŶ͗

`

E C N A L A B E H T N O T E S S A N A S A D E D R O C E R E B O T T S O C T S E R E T N I D E Z I L A T I P AT CE E EH HS T b

T N E M E T A T S E M O C N I E H T N O D E T R O P E R E B O T E S N E P X E T S E R E T N I F O T N U O M A

c

N A O L N O I T C U R T S N O C N O E T A R T S E R E T N I E V I T C E F F % E B D L U O W E T A R T S E R E T N I D E S I L A T I P A #

T N E M E T A T S E M O C N ) N I D E T R O P E R E B O T E S N E P X E T S E R E T N I F O T N U O M !

` `

` `

`

` Ö

S E R U T N E B E D D E T A N I D R O B U S D N A S E R U T N E B E D N O E T A R T S E R E T N I E V I T C E F F % -

Calculation of interest payable during the year

` ` `

=

3 4 3 / # ' . ) 7 / 2 2 / "

3 ! $ . )

R A E Y E H T G N I R U D E L B A Y A P T S E R E T N I

Determine:

a

452 Para 14.13

Solution

`

Capitalised interest cost to be recorded as an asset on the balance sheet will be:

`

`

14.13 Ind AS Transition Facilitation Group (ITFG) Clarification

14.13.1 Processing charges amortised upto capitalisation date to form part of the asset cost

FS I S C O E U GR G ER N S T I OAS D PHNL I RCOU UGCB NY PI Y ESNR S HE AO T T PC C RO MA OR F F POE YD#H L L EET A R H CR T O I UF F 3 I O C C T S ENN R PIE S A SA E MY NHE

AD G OT AN L D,NA E"AH MT WG E ER ON RD IHO R T L OI RM BU E E SBPK A A YST !

HR L ON L T I D CA T A ,F OW L G

"SDNT T I I E I A D YF S L S AO S I S A NEUG YOHBN NITEI T W HY AC O T PUR F I FL RR MT A OOU OSB N N CO OQ OT I !C A T

Query

-

TD A L HI T U YB L F N OO N RO OT I SA E S I GL R A A T I HP CA GC F NO I S D S E O CI OR RE PP E EH R T I T O N T EP EU S I D L A E T S I I T P AR CO M DA L U E OB HL SI L W D T H ,C I "H

RWT S E S HNO O T I C E T R HO G N 7P I

-

0 5 / 2 ' . / ) 4 !

4 ) , ) # ! & . / ) 4 ) 3 . !

2 4 3 ! $ . )

S SE EAT R

FSS A O N TOCE 3 A NGP! HON X T I IED T SC WTN T U S) O S E ODRR N R O E CR I OT D GPBNE N RIB E R I E I D WOH R U C O T N L S RO /C E R I ND I OT T C BU E YS S AA RS T MD A S O T S NA T H OH S T CT OE FCM NO G OT N T I I S TS E WR I O S OE CR I U T QERN CHOI T " E V AFE I EOS T H T C 3TRNE E A !OP F PF T X E DE MEE NL ) H BRNT O A FAF SG T O TA U N E DS BS I I E S U AR S A T I R T D GNE A NGT PAI YYOA RL C L T F E EU I C L R PE C A E L R SI UR A !D QA C HDENN CEHI A I T 4E H C O R WEY 3 A P T TX

I TT A L EI A N EE B HE T AT H A I M L T R DU EHEIR HGHAT T UTPS S SOFE N I A RO L E EHTF A T T I A SSLC O L T R A N TNCS A S E DE N E M E I R DF S E YT I UA T A L R N C PO F I EH NOS

VSMI E E E A I A T T T E C A A C ER F R EEH F F R T T TO F S S U E O E E T E T SU R R P E E E F S Y T T ND L T N I N A F E H UIIC E T E EU Q DA VI VS MEI IYTTY TTCCF E S E I L I F F 3EI T F F N !FBE E A E E D DOI E L E H NU H I LT ) T LA O FA F I T O VCOFS O N TA !N D N T R E O XE N A I E I I T S F P D N A NEFL L Y U A ERO T R I PP CG T E L E PH N A F EE I !T CT L

L E S GA HTI R N S T UT IG N

U FJ E

E S D O T S N TAM"I I R NUANN A PARROA A T S LSN PDE A A I R R I R A A G DEEP P EE S H T T S E T SE N A E SAE I ES F NR RFE EE ATL S N E EENHO R U T R H I

A R T A 4 Y T TTEUA I

T N & N T A L A I I S HER

G B O S T I A S T R C SMS I O O U L E D E L R L ET R E E A F

E S D I I TST C N T U T N A I I N R L I F HL C O A T AEON N M R I V SC I I PS I E AF NT DA R C I EHETE A E G V NF H UF T OI F D RFE OFE O PAFROR R U OHES O F TP A N ONEY O E U TEA I 3T L T O A HML !AA R V L C SG D U E U T R N CI NS SII T L E A ) I A W L F R

FE I CT O B O T R EA I AR N I H

L D O 3

ETE LB A

VOR!I F T U "I C T O TSDN C N AE N T A AR ) R E E F NA A FI F MMO 0E FP GDEE HB NNT I A L L S S EFI O E CT W A N H OR OC RT I T I PS ERH O ER

PWS S E T T A TGS N A CI NO I H C D NET L VY EI G I VT LU N I N C I BD G OF E L F I EF SOU HE UTB T FHS OF NO4C I T O R N SAEEO NPMHI T T OLAF A I S A O S S R E I I G L T V HR A E OT T T RN I GAP PI NPA I MC ENT VAA RF L OO OSU F BA C D ADA D L O L I U EEC R T OE HA EH T L P E I SE R H HT SH T I EWE WB GT DR O EA T EDD HP CLU C NUL U AOC G D DHNN E RSI I S S OS S I CEEE T R CGBC L L ARA A OO HH RM NC SPA )

S EES EYE NT A UH A U AA R E L T D M T R A & SV S DT E S N SD S OS E IERI HE CELLIN T R A N I A G D E E F V I U I C

MTRV NOD N E ONEICE E TISR T A ER S E S A L PNR GE I E A VI N SI R I F NR T T C E G E C ASAAO N T C H E E S I N AV FR C C F E I O NR EEE E F I T EE R V FEENHFY S T T E R E I I A L T E H O H H L E C T F HRV A T T I EF I T I STS T F WSI T OEFE F C E N O E E R TF EESI E R E F A EA U S FC F T CI L HP O NNEA T T LNAIEVEN S GA E T H O ROE S NR V I I H I M GTBITA T O T P Y F U E C U L I T T TNR SE R P T N ) A C F T PI D N F

S S AN S NE EDS E N E A I NADE EMR OE ) TUL EERHS H H R UTUSRT O A F A 4T J N T T AODEI T E F M T A N A N R H O HE EA NSR T W I H A P TPE SMT LSN E NS UFA ER ORAEIN F T EGDMDE S SN E E E V P US E T T I I IX R I T A N L F T N E A I ES I A T GR CN R I NO I N T C I D A EN CO EA L NER DA EE I I IR U A R N C E A YI GN T N F B T E NV I A TNAI T T A E N EE N FOH I MF BR EONT

E V I T C E F F E E H T F O T R A P L A R G E T N

I E ND U AL EC R N A I TT N A HE T M SU E R ET &S N I L A I C N A N I F A F O E T A R T S E R E T N I

TNDE A H INT D AR ENSO A E R UGEF SNFT E I A SA T EA E R H R ME T SS I NU SE E E R G I G E NT T I I F L T N I O S I B I ATD E R I V L A Y I T LPTC I A T LN I E A C R EF F NG AE NE T NN E !H lI

T Y GNT F I O NAL I I T EBR U A SRI A A S L I P L S A L NEI A OEC R F NG EA DS E I T A ENN PHlI S4AN

E HA T T ES E F OIR W NCTA ODN T I EEA T S H A I MT T NR ET I S O G VS I L MO R O /AV C

-

c

Para 14.13 453

Answer

Borrowing Costs,

Financial Instrument.

-

-

Relevant extracts

Para B5.4.1 of Ind AS 109:

-

Para B5.4.2 of Ind AS 109:

3 4 3 / # ' . ) 7 / 2 2 / "

3 ! $ . )

T GN NE I T M A L E E G R A SN T S OA CM NT ON I E T C M AT S S NE AV R N T I D NS AA H SC E EU F S NS OE I T C A I V NR I G E I S R OE D MI V OO RR F YP T I O L T I B T AH I L G L

I S R A I E C EI C NHV ATR NOE lT S N I T E L L U " N O I T A C l I R A L # P U O R ' N O I T A T I L I C A & N O I T I S N A R 4 3 !

D N ) F O

E U S S

) Reference

454 Para 14.13

Illustrated Guide to Indian Accounting Standards (Ind AS) AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

: : : : : : :

B.D. Chatterjee, Jinender Jain TAXMANN June 2022 7th Edition 9789356220904 1686 HARDBOUND

Rs. : 3495 | USD : 90

Description This book provides a comprehensive commentary on the Indian Accounting Standards (Ind ASs) & comprehensive analysis of amended Schedule III of the Companies Act 2013.

The Present Publication is the 7th Edition & updated till 31st March 2022, incorporating the Companies (Indian Accounting Standards) (Amendment) Rules 2022. This book is authored by B.D. Chatterjee & Jinender Jain, with the following noteworthy features: · [Process Flow Diagrams of Major Ind AS] to help the reader understand and comprehend the nuances of each Ind AS in its simplest form · [200+ Process Flow Diagrams, Charts, Illustrations & Case Studies] to deep dive into the Ind ASs & their convergence with IAS/IFRS, updated with the latest notified amendments in each of the Ind ASs, based on practical issues and questions · [Definitions & Application Guidance] are incorporated in critical chapters · [Detailed Comparative Analysis] of the Ind ASs with the amending Accounting Standards (AS) · [Case Studies] on disclosure of accounting policies · [References] have been made to the following: o Notified text on Ind ASs & AS published by Ministry of Corporate Affairs

o The Institute of Chartered Accountants of India Publication on Indian Accounting Standards (Ind AS)

o Adaptations from ACCA UK

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