Classification and reclassification of financial instruments under Ind AS

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By Team IFRS & Valuation Services (ifrs@vinodkothari.com) (finserv@vinodkothari.com)

Background

As India moves into Indian Accounting Standards (Ind AS), one standard which the accountants will be wary about is the Ind AS 109: Financial Instruments. This standard is an adaption of the International Financial Reporting Standard 9.  Ind AS 109 specifically provides for the manner in which the financial assets and financial liabilities are to be dealt with the books of the accounts. This standard itself is incomplete, as to draw a meaningful conclusion to any matter relating to financial asset or financial liability, one will also have to refer to the Ind AS 32. Read more →

Debut of Section 130 of the Companies Act, 2013

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-NCLT orders recasting of financial statements of ILFS

By Smriti Wadehra (smriti@vinodkothari.com)

Introduction

As the first instance of regulatory recasting of financial statements, the National Company Law Tribunal, Mumbai has directed the reopening of the books of accounts of IL&FS Group (‘Company’) and some of its subsidiaries. The rationale behind such direction is that the Tribunal considers that the accounts of the Company and its specific subsidiaries are fraudulently prepared in the last five years and are not reliable.

The ruling[1] may be a trailblazer as there may be several instances in future of either voluntary recasting or regulatory recasting of financial statement. This article is a general discussion of the law and the global practice in this regard.

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Resurrection of masses: Gujarat HC quashes MCA notification on disqualification of directors

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By CS Megha Saraf (megha@vinodkothari.com)

In what might be a major embarrassment to the Ministry of Corporate Affairs (“MCA”), the Gujarat High Court has held that the MCA came up with various notifications in the month of September, 2017, disqualifying 3,09,614[1] directors, was wrong, since it amounted to giving a retrospective effect to the provisions of Section 164 (2) of the Companies Act, 2013 (“Act, 2013”). Notably, in a so-called Operation Clean Money, the MCA struck off some 2,24,733[2] companies, generally branding them as “shell companies”, and simultaneously disqualified their directors, relying on a provision introduced in the Act, 2013 in form of Section 164 (2) which extends to private companies as well.

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MCA aligns the provisions of Incorporation Rules with Ordinance

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