Ind AS 1 was amended vide notification no. G.S.R.242(E) dated 31 March 2023 to substitute Significant Accounting Policies with Material Accounting Policy Information. The amendment has an impact only on notes. I have seen companies having reported that the amendment has no impact. Some companies and auditors view the amendment as only a replacement of the heading “Significant Accounting Policies” with “Material Accounting Policies”. However, the amendment if applied in its spirit has potential to reduce the accounting policy disclosures by more than 50%. The eBook discusses the need for the amendment and what is material accounting policy. The book contains accounting policies disclosed in financial statements for the year ended 31 March 2023 by 18 listed companies that report in accordance with Ind AS. I have analysed those policies based on the guidance given for disclosure of material accounting policy information by amended Ind AS 1. I have also provided my views on possible non-compliance with the requirements of Ind AS based on the accounting policies disclosed. Whether an accounting policy is material for a company and what should be the contents in that policy are subject to significant judgement and based on facts and circumstances of each company. Therefore, the conclusion specified may need to be adapted to the facts and circumstances of the case. Also, the analysis is based on the financial statements for the year ended 31 March 2023. The disclosure of material accounting policy information will be applied for the first time in the financial statements for the year ended 31 March 2024. Though the analysis based on previous year is also relevant in the current year, the analysis need to be changed to also consider the current year’s figures.
Please note that no correspondence has been made with either the company or the auditor before publishing the book on the accounting policies disclosed by those companies in their published financial statements. Therefore, any views expressed on non-compliance or the form and manner of disclosure of material accounting policy are as perceived by me, the author. The views expressed in this eBook are my personal views. The reader is cautioned to seek the help of an expert before acting or refraining from action based on views expressed in this book.
The book also contains the following annexures:
1. E-mail dated 15 January 2024 from Accounting Standards Board (ASB) of The Institute of Chartered Accountants of India (ICAI) clarifying accrual of interest on credit-impaired financial assets.
2. Guideline by Reserve Bank of India on Implementation of Indian Accounting Standards in NBFCs dated 13 March 2020.
3. National Financial Reporting Authority (NFRA) Circular dated 20 October 2022 on Non-accrual of interest on borrowings by the companies in violation of Indian Accounting Standards
4. NFRA Circular date 29 March 2023 on Incorrect accounting policies on Revenue and Trade Receivables published by large listed companies.