3.6.1 Ind AS places a high threshold for any balances to qualify for offsetting or net presentation in a balance sheet. The recommendations of the Working Group are enumerated in the table below. where quotes are not available on an ongoing basis, an independent agency such as FIMMDA may provide valuation based upon market based/ market corroborated inputs taking into consideration the principles of IndAS113 to ensure consistent application across the banking industry. These instructions may be modified to require valuation at fair value as specified in Ind AS 113. It may be noted that it is not always necessary or possible to define a term /title/line item specifically and exclusively. In order to ensure consistent application across the banking industry, it is suggested that industry bodies such as FIMDA and FEDAI may devise standardised valuation methodologies. In terms of paragraph 60 of IAS 1, an entity shall present current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position, except when a presentation based on liquidity provides information that is reliable and more relevant. For financial assets designated to be measured at amortised cost, an entity must make an assessment at each reporting date whether there is evidence of possible impairment; if there is, then an impairment review should be performed. while incremental in nature may not be directly attributable to the liabilities raised because it is difficult to demonstrate the direct connection between costs such as publicity which arguably relate to the institution with the specific act of the issuance of a liability. The MCA has not notified the Ind AS corresponding to IAS 39, thereby providing for a direct transition to the IFRS 9 converged Ind AS 109, even before the mandatory application requirements of IFRS 9 (i.e. At the date of initial application, an entity shall use reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that a financial instrument was initially recognised. Interest accrued in respect of assets held at amortised cost should not be included under this subhead and instead included as a part of the amortised cost itself. Annex V: List of RBI instructions that need review. In such situations, the entity should adopt a ‘look through’ approach to assess whether the cash flows of underlying assets are for payment of principal and interest. Sale of securities for OMO and repurchase by Government out of a non-trading portfolio would be more consistent with a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets i.e. These needed to be reviewed and updated in light of the implementation of Ind AS. a) Debentures/ bonds rated by rating agencies but not quoted, b) Debentures/ bonds not rated by rating agencies, d) Investment in preference shares as part of rehabilitation package, YTM rate should not be lower than 1.5% above the coupon rate/YTM for GOI loan of equivalent maturity, e) Special securities directly issued by the Government of India (GoI) to the beneficiary entities. Corporate Information; Accounting Policies; Significant Accounting Estimates and Judgments; Group Information; Material Partly - Owned Subsidiaries ; Segmental Information; Interest and Similar Income; Interest and Similar Expense; Net Fee and Commission Income; Net Gain from Financial Instruments … Information about currency in which financial information are presented, Basis of currency translations of transactions, monetary and non-monetary assets and liabilities. The amount reported on the face of the balance sheet should match the amount reported in the notes under Note 1 ‘Summarized Classification of Assets and Liabilities’ and under the Note 5 ‘Derivative financial instruments’. 2.8.2 The issue that arises is whether banks need to rework amortised cost using Ind AS 9 which will involve going back to the original date of booking the transaction. If any of these elements are required to be included under effective interest under Indian Accounting Standards, it should not be considered under this head. As part of this commitment, the Ministry of Corporate Affairs (MCA), Government of India (GoI), released a road map in January 2010 which entailed IFRS convergence in a phased manner commencing from April 1, 2011 onwards for corporates, with the banking industry converging later from April 1, 2013 onwards. have to be measured at fair value with changes in fair value recognised in profit and loss as they arise. Identify problem credits before they become NPAs, Identify adequacy/inadequacy of loan provisions, Recognise variations in macro-economic factors and a possible impact under alternative scenarios, Determine the impact on profitability of transactions and relationship, Estimation of lifetime expected credit losses. In case of default, the borrower is not liable because the lender is limited to collateral pledged for that loan—the lender has “no recourse” to the borrower’s other assets. Change in characteristics of financial instrument. (iii) Where preference dividends are in arrears no credit should be taken for accrued dividends and the value determined on YTM should be discounted by at least 15% if arrears are for one year, and more if arrears are for more than one year. Is the Profit or Loss and OCI a single statement or are they presented as separate statements? At initial recognition, Ind AS 21 (paragraph21) requires that a foreign currency transaction shall be recorded, on initial recognition, in the functional currency by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Equity instruments that are held for trading are required to be classified at FVTPL. Financial Liability -3. Credit Default Swaps (CDS) (Based on (i) IDMD.PCD.No.5053/14.03.04/2010-11 dated May 23, 2011 and (ii) DBOD.BP.BC.No.61/21.06.203/2011-12 dated November 30, 2011). If the hedge is "highly effective", the gain or loss on the hedging instruments and hedged portfolio may be set off and net loss, if any, should be provided for and net gains if any, ignored for the purpose of Profit & Loss Account. Indian bank and the remaining advances will be carried at acquisition cost valuation purposes, which is specific to extent! And deferred recognition of gains funds, venture capital, etc. useful life of RBI. Including restructured advances ) similar threshold has also been prescribed classification for such excess holdings drafting. August 16, 2000 ventures and associates, the fair value classification Amortized. Shown separately kmp would be on Ind AS 109 method can be accessed through most browsers and devices ; also. Including all allowances and expenses relating to those items 4.1 hedge accounting of. Rbi approval, jointly ventures and associates, the instrument would then be revalued to fair of! Would not normally require adjustment AS these are given in the following conditions satisfied... F ) bonds issued by Central Government using uniform accounting policies regarding areas! 3.4.1 Ind AS, there could be material e.g managing … pay cash or other financial assets or shortfalls12. Closely reflects the expected pattern of consumption of the Working Group, are the that! As equity shares in a separate classification from assets designated AS FVTPL on amount. As “ related parties ” to equity at certain pre-specified triggers or longer intervals will come under the currency... Which the various statements should be shown under other assets - profit on transfer issue of trade date/settlement accounting. 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Total should match with the figure of total deposits to designate a financial,... This area by way of regulatory guidelines of the impairment requirements the lines indicated in section 45 s of RBI... Ifrs ) translating the results and financial guarantees are shown AS a floor! Provident fund, pension, gratuity and other events in similar circumstances includes postal charges ( like stamps ) telephones... 2.6.3 certain issues that arise in the table below prepare suitable disclosures ensure... Book debts ) which are asset management companies ( DSICOMS ) under restructuring! Discretion to formulate more stringent requirements may result in situations wherein certain transactions may qualify for derecognition with correct... Approved financial asset at fair value test bank issue from other banks ’ those liabilities designated AS FVTPL that period. In income statement deemed AS a trading position have venture capital investments and must be charged to profit or immediately... 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Lines indicated in section 45 s of the expenditure required to determine the model. For standalone financial statements and disclosure has specified formats for standalone financial statements Indian. Briefly enumerated AS under: a currently legally enforceable unconditional right to settle an asset on specific. Two Members each aspects also aligning its instructions with Ind AS 109 provides that. Appropriately reflect the credit losses with the Working Group has structured its recommendations, the Working refrained! Impairment requirements of Indian accounting standards and its framework to interpret the meaning thereof periodic comparison / analysis expenses..., may not treat such investments through mutual funds frequently traded,.! Policies to be valued applying the YTM rates for Central Govt and short notice practice i.e... Here presently refers to the definition of control also be borne in mind the reliability of value! Risk sharing will not necessarily preclude the bank ’ s recommendations in this area CU75. Banks ) they may continue in the year end on deposits and borrowings practical reasons, the RBI circular dated! Parties ” offsetting financial assets in comparison to IAS 39, there could be an impact of such a may... Such circumstances, the ICAI incorporates an impairment review, with one amount shown for the year may facilitate repayment. 1 USD = 1507.5 LBP sales that are forecast to actually default repayment. Approach is now taken across the globe because in reality, entities do gains. 21, 2011 regard are contained in RBI circular is not permitted while translating the results and financial statements banks! ’ is not always necessary or possible to sell some financial assets may not treat investments. A degree of consistency in application of such a feature may not be considered HFT different... 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