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Exposure Draft of Accounting Standard (AS) 1 (Revised) Presentation of Financial Statements (Comments to be received by September 02, 2013).
August, 01st 2013
                  osure Draft
               Expo     D

          ng Stan
  Accountin            AS) 1 (
                ndard (A      (Revised)
  Pr                   cial Sta
   resentation of Financ      atementts



     ast date for
   (La             ments: Se
              f Comm              r 02, 2013)
                           eptember




                    ssued by
                   Is      y
          Accounting       ards Boar
                    g Standa       rd
     nstitute of Char
The In                     A
                    rtered Accounta        I
                                   ants of India
2
         Accounting Standard (AS) 1 (Revised)1

           Presentation of Financial Statements
Following is the Exposure Draft of the revised Accounting Standard (AS) 1,
Presentation of Financial Statements, issued by the Accounting Standards Board of
the Institute of Chartered Accountants of India, for comments. The Board invites
comments on any aspect of this Exposure Draft. Comments are most helpful if they
indicate the specific paragraph or group of paragraphs to which they relate, contain a
clear rationale and, where applicable, provide a suggestion for alternative wording.

Comments should be submitted in writing to the Secretary, Accounting Standards
Board, The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No.
7100, Indraprastha Marg, New Delhi ­ 110 002, so as to be received not later than
September 02, 2013. Comments can also be sent by e-mail at asb@icai.in.


(This Accounting Standard includes paragraphs set in bold type and plain type, which have
equal authority. Paragraphs in bold type indicate the main principles. This Standard should
be read in the context of the Preface to the Statements of Accounting Standards issued by
the Institute of Chartered Accountants of India).
.

Objective
1   This Standard prescribes the basis for presentation of general purpose financial
    statements to ensure comparability both with the enterprise's financial
    statements of previous periods and with the financial statements of other
    enterprises. It sets out overall requirements for the presentation of financial
    statements, guidelines for their structure and minimum requirements for their
    content.

Scope

2   An enterprise should apply this Standard in preparing and presenting
    general purpose financial statements in accordance with Accounting
    Standards.

3   Other ASs set out the recognition, measurement and disclosure requirements for
    specific transactions and other events.

4   This Standard does not apply to the structure and content of condensed interim
    financial statements prepared in accordance with AS 25 Interim Financial
    Reporting. However, paragraphs 14-28 apply to such financial statements. This
    Standard applies equally to all enterprises, including those that present
    consolidated financial statements as defined in AS 21 Consolidated Financial
    Statements and those that present separate financial statements.



1
  Appendix I to this revised AS 1 contains the objective of the revision of and comparison with
the existing AS 1.


                                                                                              3
5   This Standard uses terminology that is suitable for profit-oriented enterprises. If
    enterprises with not-for-profit activities in the private sector or the Government
    sector apply this Standard, they may need to amend the descriptions used for
    particular line items in the financial statements and for the financial statements
    themselves.


6    Similarly, enterprises that do not have equity instruments (e.g. Mutual Funds,
    Partnership Firms) and enterprises whose share capital is not equity (e.g. some
    cooperative enterprises), may need to adapt the descriptions in financial
    statement presentation to faithfully represent the interests of members, partners
    or unit-holders.


    Definitions

7   The following terms are used in this Standard with the meanings
    specified:

    General purpose financial statements (referred to as `financial statements')
    are those intended to meet the needs of users who are not in a position to
    require an enterprise to prepare reports tailored to their particular
    information needs.

    Equity is the residual interest in the assets of an enterprise after deducting
    all liabilities.

    Impracticable Applying a requirement is impracticable when the enterprise
    cannot apply it after making every reasonable effort to do so.

    Accounting Standards (ASs) are Standards prescribed under the
    Companies Act or the Accounting Standards issued by the Institute of
    Chartered Accountants of India, whichever are applicable to the enterprise.

    Material Omissions or misstatements of items are material if they could,
    individually or collectively, influence the economic decisions that users
    make on the basis of the financial statements. Materiality depends on the
    size and nature of the omission or misstatement judged in the surrounding
    circumstances. The size or nature of the item, or a combination of both,
    could be the determining factor.

    Assessing whether an omission or misstatement could influence economic
    decisions of users, and so be material, requires consideration of the
    characteristics of those users. The Framework for the Preparation and
    Presentation of Financial Statements issued by the Institute of Chartered
    Accountants of India states in paragraph 26 that `it is assumed that users have
    a reasonable knowledge of business and economic activities and accounting and
    study the information with reasonable diligence.' Therefore, the assessment
    needs to take into account how users with such attributes could reasonably be
    expected to be influenced in making economic decisions.

    Notes contain information in addition to that presented in the balance
    sheet, statement of profit and loss and statement of cash flows. Notes
    provide narrative descriptions or disaggregations of items presented in



                                                                                     4
     those statements and information about items that do not qualify for
     recognition in those statements.

     Owners are holders of instruments classified as equity.

     Profit or loss is the total of income less expenses.

     Reclassification adjustments are amounts reclassified to the statement of
     profit and loss in the current period that were recognised in reserves in the
     current or previous periods.

Financial statements
     Purpose of financial statements
8 Financial statements are a structured representation of the financial position and
  financial performance of an enterprise. The objective of financial statements is to
  provide information about the financial position, financial performance and cash
  flows of an enterprise that is useful to a wide range of users in making economic
  decisions. Financial statements also show the results of the management's
  stewardship of the resources entrusted to it. To meet this objective, financial
  statements provide information about an enterprise's:
     (a)   assets;
     (b)   liabilities;
     (c)   equity;
     (d)   income and expenses, including gains and losses;
     (e)   contributions by and distributions to owners in their capacity as owners;
           and
     (f)   cash flows.
     Financial Statements also provide information about contributions by and
     distributions to owners in their capacity as owners.

     This information, along with other information in the notes, assists users of
     financial statements in predicting the enterprise's future cash flows and, in
     particular, their timing and certainty.

     Complete set of financial statements

9     A complete set of financial statements comprises:
     (a)   a balance sheet as at the end of the period;
     (b)   a statement of profit and loss for the period;
     (c)   a statement of cash flows for the period, wherever applicable;
     (d)   notes, comprising a summary of significant accounting policies and
           other explanatory information; and


10    An enterprise should present with equal prominence all of the financial
      statements in a complete set of financial statements.



                                                                                       5
11    As per paragraphs 69-73, an enterprise should present the components of profit
      or loss in a statement of profit and loss.

12    Many enterprises present, outside the financial statements, a financial review by
      management that describes and explains the main features of the enterprise's
      financial performance and financial position, and the principal uncertainties it
      faces. Such a report may include a review of:
     (a)   the main factors and influences determining financial performance,
           including changes in the environment in which the enterprise operates,
           the enterprise's response to those changes and their effect, and the
           enterprise's policy for investment to maintain and enhance financial
           performance, including its dividend policy;
     (b)   the enterprise's sources of funding and its targeted ratio of liabilities to
           equity; and
     (c)   the enterprise's resources not recognised in the balance sheet in
           accordance with ASs.




13    Many enterprises also present, outside the financial statements, reports and
      statements such as environmental reports and value added statements,
      particularly in industries in which environmental factors are significant and when
      employees are regarded as an important user group. Reports and statements
      presented outside financial statements are outside the scope of ASs.

     General features

     Presentation of True and Fair View and compliance with ASs

14    Financial statements should present a true and fair view of the financial
      position, financial performance and cash flows of an enterprise.
      Presentation of true and fair view requires the faithful representation of
      the effects of transactions, other events and conditions in accordance
      with the definitions and recognition criteria for assets, liabilities, income
      and expenses set out in the Framework. The application of ASs, with
      additional disclosure when necessary, is presumed to result in financial
      statements that present a true and fair view.

15    An enterprise whose financial statements comply with ASs should make
      an explicit and unreserved statement of such compliance in the notes. An
      enterprise should not describe financial statements as complying with
      ASs unless they comply with all the requirements of ASs.

16    In virtually all circumstances, presentation of a true and fair view is achieved by
      compliance with applicable ASs. Presentation of a true and fair view also
      requires an enterprise:
     (a)    to select and apply accounting policies in accordance with AS 5
           Accounting Policies, Changes in Accounting Estimates and Errors. AS 5
           sets out a hierarchy of authoritative guidance that management considers
           in the absence of an AS that specifically applies to an item.




                                                                                       6
     (b) to present information, including accounting policies, in a manner that
         provides relevant, reliable, comparable and understandable information.
     (c)   to provide additional disclosures when compliance with the specific
           requirements in ASs is insufficient to enable users to understand the impact
           of particular transactions, other events and conditions on the enterprise's
           financial position and financial performance.

17   An enterprise cannot rectify inappropriate accounting policies either by
     disclosure of the accounting policies used or by notes or explanatory
     material.


     Going concern

18   When preparing financial statements, management should make an
     assessment of an enterprise's ability to continue as a going concern. An
     enterprise should prepare financial statements on a going concern basis
     unless management either intends to liquidate the enterprise or to cease
     trading, or has no realistic alternative but to do so. When management is
     aware, in making its assessment, of material uncertainties related to
     events or conditions that may cast significant doubt upon the enterprise's
     ability to continue as a going concern, the enterprise should disclose
     those uncertainties. When an enterprise does not prepare financial
     statements on a going concern basis, it should disclose that fact, together
     with the basis on which it prepared the financial statements and the
     reason why the enterprise is not regarded as a going concern.

19   In assessing whether the going concern assumption is appropriate,
     management takes into account all available information about the future, which
     is at least, but is not limited to, twelve months from the end of the reporting
     period. The degree of consideration depends on the facts in each case. When
     an enterprise has a history of profitable operations and ready access to financial
     resources, the enterprise may reach a conclusion that the going concern basis
     of accounting is appropriate without detailed analysis. In other cases,
     management may need to consider a wide range of factors relating to current
     and expected profitability, debt repayment schedules and potential sources of
     replacement financing before it can satisfy itself that the going concern basis is
     appropriate.

     Accrual basis of accounting

20   An enterprise should prepare its financial statements, except for cash
     flow information, using the accrual basis of accounting.

21   When the accrual basis of accounting is used, an enterprise recognises items
     as assets, liabilities, equity, income and expenses (the elements of financial
     statements) when they satisfy the definitions and recognition criteria for those
     elements in the Framework.




                                                                                     7
     Materiality and aggregation

22   An enterprise should present separately each material class of similar
     items. An enterprise should present separately items of a dissimilar
     nature unless they are immaterial except when required by law.

23   Financial statements result from processing large numbers of transactions or
     other events that are aggregated into classes according to their nature. The
     final stage in the process of aggregation and classification is the presentation of
     condensed and classified data, which form line items in the financial
     statements. If a line item is not individually material, it is aggregated with other
     items either in those statements or in the notes. An item that is not sufficiently
     material to warrant separate presentation in those statements may warrant
     separate presentation in the notes.

24   An enterprise need not provide a specific disclosure required by an AS if the
     information is not material except when required by law.

     Offsetting

25   An enterprise should not offset assets and liabilities or income and
     expenses, unless required or permitted by an AS.

26   An enterprise reports separately both assets and liabilities, and income and
     expenses. Offsetting in the statements of profit and loss or balance sheet,
     except when offsetting reflects the substance of the transaction or other event,
     detracts from the ability of users both to understand the transactions, other
     events and conditions that have occurred and to assess the enterprise's future
     cash flows. Measuring assets net of valuation allowances--for example,
     obsolescence allowances on inventories and doubtful debts allowances on
     receivables--is not offsetting.

27 AS 9 Revenue Recognition defines revenue and requires an enterprise to
    measure it taking into account the amount of any trade discounts and volume
    rebates the enterprise allows. An enterprise undertakes, in the course of its
    ordinary activities, other transactions that do not generate revenue but are
    incidental to the main revenue-generating activities. An enterprise presents the
    results of such transactions, when this presentation reflects the substance of
    the transaction or other event, by netting any income with related expenses
    arising on the same transaction. For example:
     (a)   an enterprise presents gains and losses on the disposal of non-current
           assets, including investments and operating assets, by deducting from the
           proceeds on disposal the carrying amount of the asset and related selling
           expenses; and
     (b)   an enterprise may net expenditure related to a provision that is recognised
           in accordance with AS 29 Provisions, Contingent Liabilities and
           Contingent Assets and reimbursed under a contractual arrangement with
           a third party (for example, a supplier's warranty agreement) against the
           related reimbursement.

28   In addition, an enterprise presents on a net basis gains and losses arising from
     a group of similar transactions, for example, foreign exchange gains and losses.



                                                                                       8
      However, an enterprise presents such gains and losses separately if they are
      material.

     Frequency of reporting

29    An enterprise should present a complete set of financial statements
      (including comparative information) at least annually. When an enterprise
      changes the end of its reporting period and presents financial statements
      for a period longer or shorter than one year, an enterprise should
      disclose, in addition to the period covered by the financial statements:
     (a)    the reason for using a longer or shorter period, and
     (b)     the fact that amounts presented in the financial statements are not
             entirely comparable.

     Comparative information

30    Except when ASs permit or require otherwise, an enterprise should
      disclose comparative information in respect of the previous period for all
      amounts reported in the current period's financial statements. An
      enterprise should include comparative information for narrative and
      descriptive information when it is relevant to an understanding of the
      current period's financial statements.


31    In some cases, narrative information provided in the financial statements for the
      previous period(s) continues to be relevant in the current period. For example,
      an enterprise discloses in the current period details of a legal dispute whose
      outcome was uncertain at the end of the immediately preceding reporting period
      and that is yet to be resolved. Users benefit from information that the
      uncertainty existed at the end of the immediately preceding reporting period,
      and about the steps that have been taken during the period to resolve the
      uncertainty.

32    When the enterprise changes the presentation or classification of items in
      its financial statements, the enterprise should reclassify comparative
      amounts unless reclassification is impracticable. When the enterprise
      reclassifies comparative amounts, the enterprise should disclose:
     (a)   the nature of the reclassification;
     (b)   the amount of each item or class of items that is reclassified; and
     (c)   the reason for the reclassification.


33    When it is impracticable to reclassify comparative amounts, an enterprise
      should disclose:
     (a)   the reason for not reclassifying the amounts, and
     (b)   the nature of the adjustments that would have been made if the
           amounts had been reclassified.




                                                                                     9
34    Enhancing the inter-period comparability of information assists users in making
      economic decisions, especially by allowing the assessment of trends in financial
      information for predictive purposes. In some circumstances, it is impracticable
      to reclassify comparative information for a particular prior period to achieve
      comparability with the current period. For example, an enterprise may not have
      collected data in the prior period(s) in a way that allows reclassification, and it
      may be impracticable to recreate the information.


     Consistency of presentation

35    An enterprise should retain the presentation and classification of items in
      the financial statements from one period to the next unless:
     (a)   it is apparent, following a significant     change in the nature of the
           enterprise's operations or a review of      its financial statements, that
           another presentation or classification       would be more appropriate
           having regard to the criteria for the       selection and application of
           accounting policies in AS 5; or
     (b)   an AS requires a change in presentation; or
     (c ) a law requires a change in presentation.

36    For example, a significant acquisition or disposal, or a review of the
      presentation of the financial statements, might suggest that the financial
      statements need to be presented differently. An enterprise changes the
      presentation of its financial statements only if the changed presentation
      provides information that is reliable and more relevant to users of the financial
      statements and the revised structure is likely to continue, so that comparability
      is not impaired. When making such changes in presentation, an enterprise
      reclassifies its comparative information in accordance with paragraph 32 and
      33.

Structure and content

      Introduction
37    This Standard requires particular disclosures in the balance sheet (or in the
      statement of profit and loss and requires disclosure of other line items either in
      those statements or in the notes. AS 3, Cash Flow Statements sets out
      requirements for the presentation of cash flow information.

38   This Standard sometimes uses the term `disclosure' in a broad sense,
     encompassing items presented in the financial statements. Disclosures are also
     required by other ASs. Unless specified to the contrary elsewhere in this
     Standard or in another AS, such disclosures may be made in the financial
     statements.

     Identification of the financial statements
39    An enterprise should clearly identify the financial statements and
      distinguish them from other information in the same published document.



                                                                                      10
40    ASs apply only to financial statements, and not necessarily to other information
     presented in an annual report, a regulatory filing, or another document.
     Therefore, it is important that users can distinguish information that is prepared
     using ASs from other information that may be useful to users but is not the
     subject of those requirements.

41   An enterprise should clearly identify each financial statement and the
     notes. In addition, an enterprise should display the following information
     prominently, and repeat it when necessary for the information presented
     to be understandable:

     (a) the name of the reporting enterprise or other means of identification,
         and any change in that information from the end of the preceding
         reporting period;

     (b) whether the financial statements are of an individual enterprise or a
         group of enterprises;

     (c) the date of the end of the reporting period or the period covered by
         the set of financial statements or notes;

     (d) the reporting currency, as defined in AS 11; and

     (e) the level of rounding used in presenting amounts in the financial
         statements.

42    An enterprise meets the requirements in paragraph 41 by presenting
      appropriate headings for pages, statements, notes, columns and the like.
      Judgement is required in determining the best way of presenting such
      information. For example, when an enterprise presents the financial statements
      electronically, separate pages are not always used; an enterprise then
      presents the above items to ensure that the information included in the
      financial statements can be understood.

43    An enterprise often makes financial statements more understandable by
      presenting information in thousands, lakhs, millions or crores of units of the
      reporting currency. This is acceptable as long as the enterprise discloses the
      level of rounding and does not omit material information.

     Balance Sheet
      Information to be presented in the balance sheet

44    As a minimum, the balance sheet should include line items that present
      the following amounts:
      (a)   tangible fixed assets;
      (b)   intangible assets;
      (c)   investments ;
      (d)   inventories;
      (e)   trade and other receivables;
      (f)   cash and cash equivalents;



                                                                                    11
      (g)     trade and other payables;
      (h)     provisions;
      (i)    liabilities and assets for current tax, as defined in           AS     22
             Accounting for Taxes on Income;
      (j)    deferred tax liabilities and deferred tax assets, as defined in AS 22;
      (k)    minority interests; and
      (l)    issued capital and reserves attributable to owners of the parent.

45    An enterprise should present additional line items, headings and
      subtotals in the balance sheet when such presentation is relevant to an
      understanding of the enterprise's financial position.

46   When an enterprise presents current and non-current assets, and current
     and non-current liabilities, as separate classifications in its balance sheet,
     it should not classify deferred tax assets (liabilities) as current assets
     (liabilities).

47   This Standard does not prescribe the order or format in which an enterprise
     presents items. Paragraph 44 simply lists items that are sufficiently different in
     nature or function to warrant separate presentation in the balance sheet. In
     addition:
     (a) line items are included when the size, nature or function of an item or
         aggregation of similar items is such that separate presentation is relevant
         to an understanding of the enterprise's financial position; and
     (b) the descriptions used and the ordering of items or aggregation of similar
         items may be amended according to the nature of the enterprise and its
         transactions, to provide information that is relevant to an understanding of
         the enterprise's financial position. For example, a financial institution may
         amend the above descriptions to provide information that is relevant to the
         operations of a financial institution.


48   An enterprise makes the judgement about whether to present additional items
     separately on the basis of an assessment of:
     (a) the nature and liquidity of assets;
     (b) the function of assets within the enterprise; and
     (c)    the amounts, nature and timing of liabilities.

49   The use of different measurement bases for different classes of assets
     suggests that their nature or function differs and, therefore, that an enterprise
     presents them as separate line items. For example, different classes of tangible
     fixed assets can be carried at cost or at revalued amounts in accordance with
     AS 10.




                                                                                    12
     Current/non-current distinction

50   An enterprise should present current and non-current assets, and current
     and non-current liabilities, as separate classifications in its balance sheet
     in accordance with paragraphs 54-64.

51   An enterprise should disclose the amount expected to be recovered or
     settled after more than twelve months for each asset and liability line item
     that combines amounts expected to be recovered or settled:
     (a)   no more than twelve months after the reporting period, and
     (b)   more than twelve months after the reporting period.

52   When an enterprise supplies goods or services within a clearly identifiable
     operating cycle, separate classification of current and non-current assets and
     liabilities in the balance sheet provides useful information by distinguishing the
     net assets that are continuously circulating as working capital from those used
     in the enterprise's long-term operations. It also highlights assets that are
     expected to be realised within the current operating cycle, and liabilities that are
     due for settlement within the same period.


53   Information about expected dates of realisation of assets and liabilities is useful
     in assessing the liquidity and solvency of an enterprise. Information on the
     expected date of recovery of non-monetary assets such as inventories and
     expected date of settlement for liabilities such as provisions is also useful,
     whether assets and liabilities are classified as current or as non-current. For
     example, an enterprise discloses the amount of inventories that are expected to
     be recovered more than twelve months after the reporting period.

     Current assets

54   An enterprise should classify an asset as current when:
     (a) it expects to realise the asset, or intends to sell or consume it, in its
         normal operating cycle;
     (b) it holds the asset primarily for the purpose of trading;
     (c) it expects to realise the asset within twelve months after the reporting
         period; or
     (d) the asset is cash or a cash equivalent (as defined in AS 3) unless the
         asset is restricted from being exchanged or used to settle a liability
         for at least twelve months after the reporting period.

     An enterprise should classify all other assets as non-current.

55   This Standard uses the term `non-current' to include tangible, intangible and
     other assets of a long-term nature. It does not prohibit the use of alternative
     descriptions as long as the meaning is clear.

56   The operating cycle of an enterprise is the time between the acquisition of
     assets for processing and their realisation in cash or cash equivalents. When
     the enterprise's normal operating cycle is not clearly identifiable, it is assumed


                                                                                      13
      to be twelve months. Current assets include assets (such as inventories and
      trade receivables) that are sold, consumed or realised as part of the normal
      operating cycle even when they are not expected to be realised within twelve
      months after the reporting period. Current assets also include assets held
      primarily for the purpose of trading and the current portion of non-current loans
      and advances.

     Current liabilities

57    An enterprise should classify a liability as current when:
     (a)   it expects to settle the liability in its normal operating cycle;
     (b)   it holds the liability primarily for the purpose of trading;
     (c)   the liability is due to be settled within twelve months after the
           reporting period; or
     (d)   it does not have an unconditional right to defer settlement of the
           liability for at least twelve months after the reporting period (see
           paragraph 61). Terms of a liability that could, at the option of the
           counterparty, result in its settlement by the issue of equity
           instruments do not affect its classification.

     An enterprise should classify all other liabilities as non-current.

58    Some current liabilities, such as trade payables and some accruals for
      employee and other operating costs, are part of the working capital used in the
      enterprise's normal operating cycle. An enterprise classifies such operating
      items as current liabilities even if they are due to be settled more than twelve
      months after the reporting period. The same normal operating cycle applies to
      the classification of an enterprise's assets and liabilities. When the enterprise's
      normal operating cycle is not clearly identifiable, it is assumed to be twelve
      months.

59    Other current liabilities are not settled as part of the normal operating cycle, but
      are due for settlement within twelve months after the reporting period or held
      primarily for the purpose of trading. Examples are bank overdrafts, and the
      current portion of non-current loans, dividends payable, income taxes and other
      non-trade payables. Liabilities that provide financing on a long-term basis (ie
      are not part of the working capital used in the enterprise's normal operating
      cycle) and are not due for settlement within twelve months after the reporting
      period are non-current liabilities, subject to paragraphs 62 and 63.


60   An enterprise classifies its liabilities that are of financial in nature as current
     when they are due to be settled within twelve months after the reporting period,
     even if:
     (a)   the original term was for a period longer than twelve months, and
     (b)   an agreement to refinance, or to reschedule payments, on a long-term
           basis is completed after the reporting period and before the financial
           statements are approved for issue.




                                                                                       14
61   If an enterprise expects, and has the discretion, to refinance or roll over an
     obligation for at least twelve months after the reporting period under an existing
     loan facility, it classifies the obligation as non-current, even if it would otherwise
     be due within a shorter period. However, when refinancing or rolling over the
     obligation is not at the discretion of the enterprise (for example, there is no
     arrangement for refinancing), the enterprise does not consider the potential to
     refinance the obligation and classifies the obligation as current.

62   When an enterprise breaches a provision of a long-term loan arrangement on
     or before the end of the reporting period with the effect that the liability becomes
     payable on demand, it classifies the liability as current, even if the lender
     agreed, after the reporting period and before the approval of the financial
     statements for issue, not to demand payment as a consequence of the breach,
     unless in substance it is a technical breach of the nature that does not result in
     payment on demand based on the past experience of the enterprise, in which
     case it should make an appropriate disclosure in this regard in the notes. An
     enterprise classifies the liability as current because, at the end of the reporting
     period, it does not have an unconditional right to defer its settlement for at least
     twelve months after that date.

63   However, an enterprise classifies the liability as non-current if the lender agreed
     by the end of the reporting period to provide a period of grace ending at least
     twelve months after the reporting period, within which the enterprise can rectify
     the breach and during which the lender cannot demand immediate repayment.

64 In respect of loans classified as current liabilities, if the following events occur
    between the end of the reporting period and the date the financial statements
    are approved for issue, those events are disclosed as non-adjusting events in
    accordance with AS 4 Events Occurring after the Balance Sheet Date :
     (a) refinancing on a long-term basis;
     (b) rectification of a breach of a long-term loan arrangement; and
     (c)   the granting by the lender of a period of grace to rectify a breach of a long-
           term loan arrangement ending at least twelve months after the reporting
           period.

     Information to be presented either in the balance sheet or in the
     notes

65   An enterprise should disclose, either in the balance sheet or in the
     notes, further subclassifications of the line items presented, classified in
     a manner appropriate to the enterprise's operations.

66   The detail provided in sub-classifications depends on the requirements of ASs
     and on the size, nature and function of the amounts involved. An enterprise also
     uses the factors set out in paragraph 48 to decide the basis of sub-
     classification. The disclosures vary for each item, for example:
     (a)   sub-classification of current and long term investments in accordance with
           AS 13;
      (b) inventories are disaggregated, in accordance with AS 2 Valuation of
          Inventories, into classifications such as raw materials and components,
          work in progress, finished goods, stores and spares and loose tools;


                                                                                        15
     (c)   provisions are disaggregated into provisions for employee benefits and
           other items; and
     (d)   equity capital and reserves are disaggregated into various classes, such as
           paid-up capital, share premium and reserves.


67   An enterprise should disclose the following, either in the balance sheet or
     in the notes:
     (a)   for each class of share capital:
           (i)     the number of shares authorised;
           (ii)    the number of shares issued and fully paid, and issued but not
                   fully paid;
           (iii)   par value per share, or that the shares have no par value;
           (iv)    a reconciliation of the number of shares outstanding at the
                   beginning and at the end of the period;
           (v)     the rights, preferences and restrictions attaching to that class
                   including restrictions on the distribution of dividends and the
                   repayment of capital;
           (vi)    shares in the enterprise held by its subsidiaries or associates;
                   and
           (vii) shares reserved for issue under options and contracts for the
                 sale of shares, including terms and amounts; and
     (b)   a description of the nature and purpose of each reserve.

68    An enterprise whose capital is not limited by shares e.g., a company
      limited by guarantee, should disclose information equivalent to that
      required by paragraph 67(a), showing changes during the period in each
      category of equity interest, and the rights, preferences and restrictions
      attaching to each category of equity interest.


      Statement of Profit and Loss
69    An enterprise should present all items of income and expense
      recognised in a period in the statement of profit and loss.

      Information to be presented in the statement of profit and loss

70    As a minimum, the statement of profit and loss should include line items
      that present the following amounts for the period:
     (a) revenue;
     (b) finance costs;
     (c) share of the profit or loss of associates using the equity method;
     (d) tax expense;
      (e) profit or loss;



                                                                                   16
71   An enterprise should disclose the profit or loss for the period in the
     statement of profit and loss as allocations for the period attributable to:
     (i)   minority interests, and
     (ii) owners of the parent.

72   An enterprise should present additional line items, headings and
     subtotals in the statement of profit and loss, when such presentation is
     relevant to an understanding of the enterprise's financial performance.

73   Because the effects of an enterprise's various activities, transactions and other
     events differ in frequency, potential for gain or loss and predictability, disclosing
     the components of financial performance assists users in understanding the
     financial performance achieved and in making projections of future financial
     performance. An enterprise includes additional line items in the statement of
     profit and loss, and it amends the descriptions used and the ordering of items
     when this is necessary to explain the elements of financial performance. An
     enterprise considers factors including materiality and the nature of the items of
     income and expense. For example, a financial institution may amend the
     descriptions to provide information that is relevant to the operations of a
     financial institution. An enterprise does not offset income and expense items
     unless the criteria in paragraph 25 are met.

     Profit or loss for the period

74   An enterprise should recognise all items of income and expense in a
     period in the statement of profit and loss unless an AS requires or permits
     otherwise.

75   Some ASs specify circumstances when an enterprise recognises particular
     items outside the statement of profit and loss in the current period. AS 5
     specifies two such circumstances: the correction of errors and the effect of
     changes in accounting policies. Other ASs require or permit certain items to be
     recognised directly in reserves even if they meet the Framework's definition of
     income or expense to be excluded from the statement of profit and loss.

     Reclassification adjustments

76   An enterprise should disclose the amount of income tax relating to each
     item of reclassification adjustments, either in the statement of profit and
     loss or in the notes.

77 An enterprise should disclose reclassification adjustments in the
   statement of profit and loss.

78   Other ASs specify whether and when amounts previously recognised in
     reserves are reclassified in the statement of profit and loss. Such
     reclassifications are referred to in this Standard as reclassification adjustments.
     A reclassification adjustment is included in the period in which the adjustment is
     reclassified to statement of profit and loss. For example, AS 11 requires
     recognition as income or expense of foreign currency translation reserve on
     disposal of net investment in non-integral foreign operation.

.


                                                                                       17
     Information to be presented in the statement of profit and loss or in
     the notes

79   When items of income or expense are material, an enterprise should
     disclose their nature and amount separately as exceptional items.
80   Circumstances that would give rise to the separate disclosure of items of
     income and expense include:
     (a)   write-downs of inventories to net realisable value or of property, plant and
           equipment to recoverable amount, as well as reversals of such write-
           downs;
     (b)   restructurings of the activities of an enterprise and reversals of any
           provisions for the costs of restructuring;
     (c)   disposals of items of tangible fixed assets;
     (d)   disposals of long term investments;
     (e) discontinuing operations;
     (f)   litigation settlements; and
     (g)   legislative changes having retrospective application;
     (h)   other reversals of provisions.


81   An enterprise should present an analysis of expenses recognised in the
     statement of profit and loss using a classification based on the nature of
     expense method.

82     Enterprises are encouraged to present the analysis in paragraph 81 in the
       statement of profit and loss.

83     Expenses are sub-classified to highlight components of financial performance
       that may differ in terms of frequency, potential for gain or loss and
       predictability. This analysis is provided in the form as described in paragraph
       84.

84    In the analysis based on the `nature of expense' method, an enterprise
      aggregates expenses within the statement of profit and loss according to their
      nature (for example, depreciation, purchases of materials, transport costs,
      employee benefits and advertising costs), and does not reallocate them among
      functions within the enterprise. This method is simple to apply because no
      allocations of expenses to functional classifications are necessary. An example
      of a classification using the nature of expense method is as follows:

      Revenue                                                              X
      Other income                                                         X
      Changes in inventories of finished goods and work
       in progress                                            X
      Raw materials and consumables used                      X
      Employee benefits expense                               X
      Depreciation and amortisation expense                   X
      Other expenses                                          X
      Total expenses                                                       (X)
      Profit before tax                                                     X



                                                                                    18
     Movements in Components of Equity
85   An enterprise should present movements in various components of
     equity, e.g., reserves and surplus, appearing in the balance sheet
     including the following information:
     (a) for each component of equity, the effects of retrospective application
          recognised in accordance with AS 5;
     (b) for each component of equity, a reconciliation between the carrying
          amount at the beginning and the end of the period, separately
          disclosing each changes resulting from:
         (i)   profit or loss;
         (ii) each reserve ;
         (iii) transactions with owners in their capacity as owners, showing
               separately contributions by and distributions to owners and
               changes in ownership interests in subsidiaries that do not result
               in a loss of control; and
         (iv) any item recognised directly in equity such as amount
              recognised directly in equity as capital reserve.


86    An enterprise should present, the amount of dividends recognised as
      distributions to owners during the period, and the related amount of
      dividends per share.

87    In paragraph 85, the components of equity include, for example, each class of
      share capital, securities premium account, and reserves .

88    Changes in an enterprise's equity between the beginning and the end of the
      reporting period reflect the increase or decrease in its net assets during the
      period. Except for changes resulting from transactions with owners in their
      capacity as owners (such as equity contributions, reacquisitions of the
      enterprise's own equity instruments and dividends), the overall change in
      equity during a period represents the total amount of income and expense,
      including gains and losses, generated by the enterprise's activities during that
      period.

89    AS 5 requires retrospective adjustments to effect changes in accounting
      policies, to the extent practicable, except when the transition provisions in
      another AS require otherwise. Retrospective adjustments are not changes in
      equity but they are adjustments to the opening balance of reserves, except
      when an AS requires retrospective adjustment of another component of equity.
      Paragraph 85(b) requires disclosure of the total adjustment to each component
      of equity resulting from changes in accounting policies and, separately, from
      corrections of errors.

     Statement of cash flows
90    Cash flow information provides users of financial statements with a basis to
      assess the ability of the enterprise to generate cash and cash equivalents and
      the needs of the enterprise to utilise those cash flows. AS 3 sets out
      requirements for the presentation and disclosure of cash flow information.



                                                                                   19
      Notes
      Structure

91     The notes should:
           (a)       present information about the basis of preparation of the
                     financial statements and the specific accounting policies used in
                     accordance with paragraphs 96-102;
           (b)       disclose the information required by ASs that is not presented
                     elsewhere in the financial statements; and
           (c)       provide information that is not presented elsewhere in the
                     financial statements, but is relevant to an understanding of any
                     of them.

92     An enterprise should present notes in a systematic manner. An
       enterprise should cross-reference each item in the balance sheet in the
       statement of profit and loss, and statement of cash flows to any related
       information in the notes.

93     An enterprise normally presents notes in the following order, to assist users to
       understand the financial statements and to compare them with financial
       statements of other enterprises:
      (a) statement of compliance with ASs (see paragraph 15);
      (b) summary of significant accounting policies applied (see paragraph 96);
      (c) supporting information for items presented in the balance sheet, in the
          statement of profit and loss, and statement of cash flows, in the order in
          which each statement and each line item is presented; and
      (d) other disclosures, including:
                 (i) contingent liabilities (see AS 29) and unrecognised contractual
                    commitments, and
                 (ii) non-financial disclosures, eg the names of the related paries that
                     control the enterprise (see AS 18).

94     In some circumstances, it may be necessary or desirable to vary the order of
       specific items within the notes.. Nevertheless, an enterprise retains a
       systematic structure for the notes as far as practicable.

95     An enterprise may present notes providing information about the basis of
       preparation of the financial statements and specific accounting policies as a
       separate section of the financial statements.

       Disclosure of accounting policies

96 An enterprise should disclose in the summary of significant accounting
   policies:
     (a)         the measurement basis (or bases) used in preparing the financial
                 statements, and





                                                                                     20
      (b)     the other accounting policies used that are relevant to an
              understanding of the financial statements.

97     It is important for an enterprise to inform users of the measurement basis or
         bases used in the financial statements (for example, historical cost, current
         cost, net realisable value, fair value or recoverable amount) because the basis
         on which an enterprise prepares the financial statements significantly affects
         users' analysis. When an enterprise uses more than one measurement basis
         in the financial statements, for example when particular classes of assets are
         revalued, it is sufficient to provide an indication of the categories of assets and
         liabilities to which each measurement basis is applied.

98 In deciding whether a particular accounting policy should be disclosed,
     management considers whether disclosure would assist users in
     understanding how transactions, other events and conditions are reflected in
     reported financial performance and financial position. Disclosure of particular
     accounting policies is especially useful to users when those policies are
     selected from alternatives allowed in ASs. Some ASs specifically require
     disclosure of particular accounting policies, including choices made by
     management between different policies they allow. For example, AS 2 requires
     disclosure of the cost formula used for valuation of inventories.

99     Each enterprise considers the nature of its operations and the policies that the
       users of its financial statements would expect to be disclosed for that type of
       enterprise. For example, users would expect an enterprise subject to income
       taxes to disclose its accounting policies for income taxes, including those
       applicable to deferred tax liabilities and assets. When an enterprise has
       significant foreign operations or transactions in foreign currencies, users would
       expect disclosure of accounting policies for the recognition of foreign
       exchange gains and losses.

100 An accounting policy may be significant because of the nature of the
    enterprise's operations even if amounts for current and prior periods are not
    material. It is also appropriate to disclose each significant accounting policy
    that is not specifically required by ASs but the enterprise selects and applies in
    accordance with AS 5.

101          An enterprise      should disclose, in the summary of significant
            accounting policies or other notes, the judgements, apart from those
            involving estimations (see paragraph 103), that management has made
            in the process of applying the enterprise's accounting policies and that
            have the most significant effect on the amounts recognised in the
            financial statements.

102 In the process of applying the enterprise's accounting policies, management
      makes various judgements, apart from those involving estimations, that can
      significantly affect the amounts it recognises in the financial statements. For
      example, management makes judgements in determining:


       (a)        when substantially all the significant risks and rewards of ownership of
                  financial assets and lease assets are transferred to other enterprises
                  (see AS 19); and



                                                                                         21
      (b)      when substantially all risks and rewards of ownership on sale of goods
               are transferred for the purpose of recognition of revenue (see AS 9)



       Sources of estimation uncertainty

103    An enterprise should disclose information about the assumptions it
       makes about the future, and other major sources of estimation
       uncertainty at the end of the reporting period, that have a significant risk
       of resulting in a material adjustment to the carrying amounts of assets
       and liabilities within the next financial year. In respect of those assets
       and liabilities, the notes should include details of:
      (a)      their nature, and
      (b)      their carrying amount as at the end of the reporting period.

104 Determining the carrying amounts of some assets and liabilities requires
    estimation of the effects of uncertain future events on those assets and liabilities
    at the end of the reporting period. For example, the effect of technological
    obsolescence on inventories, provisions subject to the future outcome of litigation
    in progress, and long-term employee benefit liabilities such as pension
    obligations. These estimates involve assumptions about such items as the
    discount rates, future changes in salaries and future changes in prices affecting
    other costs.

105 The assumptions and other sources of estimation uncertainty disclosed in
   accordance with paragraph 103 relate to the estimates that require
   management's most difficult, subjective or complex judgements. As the number
   of variables and assumptions affecting the possible future resolution of the
   uncertainties increases, those judgements become more subjective and
   complex, and the potential for a consequential material adjustment to the
   carrying amounts of assets and liabilities normally increases accordingly.

106 The disclosures in paragraph 103 are not required for assets and liabilities with a
    significant risk that their carrying amounts might change materially within the
    next financial year if, at the end of the reporting period, they are measured at fair
    value based on recently observed market prices. Such fair values might change
    materially within the next financial year but these changes would not arise from
    assumptions or other sources of estimation uncertainty at the end of the
    reporting period.

107 An enterprise presents the disclosures in paragraph 103 in a manner that helps
    users of financial statements to understand the judgements that management
    makes about the future and about other sources of estimation uncertainty. The
    nature and extent of the information provided vary according to the nature of
    the assumption and other circumstances. Examples of the types of disclosures
    an enterprise makes are:
      (a) the nature of the assumption or other estimation uncertainty;




                                                                                      22
      (b) the expected resolution of an uncertainty and the range of reasonably
          possible outcomes within the next financial year in respect of the carrying
          amounts of the assets and liabilities affected; and


      (c) an explanation of changes made to past assumptions concerning those
          assets and liabilities, if the uncertainty remains unresolved.

108   This Standard does not require an enterprise to disclose budget information or
      forecasts in making the disclosures in paragraph103.

109   Sometimes it is impracticable to disclose the extent of the possible effects of
      an assumption or another source of estimation uncertainty at the end of the
      reporting period. In such cases, the enterprise discloses that it is reasonably
      possible, on the basis of existing knowledge, that outcomes within the next
      financial year that are different from the assumption could require a material
      adjustment to the carrying amount of the asset or liability affected. In all cases,
      the enterprise discloses the nature and carrying amount of the specific asset
      or liability (or class of assets or liabilities) affected by the assumption.

110 The disclosures in paragraph 101 of particular judgements that management
     made in the process of applying the enterprise's accounting policies do not
     relate to the disclosures of sources of estimation uncertainty in paragraph103.

111   Other ASs require the disclosure of some of the assumptions that would
      otherwise be required in accordance with paragraph103. For example, AS 29
      requires disclosure, in specified circumstances, of major assumptions
      concerning future events affecting classes of provisions.

      Capital

112   An enterprise should disclose information that enables users of its
      financial statements to evaluate the enterprise's objectives, policies and
      processes for managing capital.

113 To comply with paragraph112, the enterprise discloses the following:
      (a)       qualitative information about its objectives, policies and processes for
                managing capital, including:
              (i) a description of what it manages as capital;
              (ii) when an enterprise is subject to externally imposed capital
                   requirements, the nature of those requirements and how those
                   requirements are incorporated into the management of capital;
                   and
              (iii) how it is meeting its objectives for managing capital.
      (b)       summary quantitative data about what it manages as capital. Some
                enterprises regard some financial liabilities (eg some forms of
                subordinated debt) as part of capital. Other enterprises regard capital
                as excluding some components of equity (eg deferred tax assets and
                liabilities by banks).
      (c)       any changes in (a) and (b) from the previous period.



                                                                                      23
      (d)     whether during the period it complied with any externally imposed
              capital requirements to which it is subject.
      (e)     when the enterprise has not complied with such externally imposed
              capital requirements, the consequences of such non-compliance.

      The enterprise bases these disclosures on the information provided internally
      to key management personnel.

114   An enterprise may manage capital in a number of ways and be subject to a
      number of different capital requirements. For example, a conglomerate may
      include enterprises that undertake insurance activities and banking activities
      and those enterprises may operate in several jurisdictions. When an aggregate
      disclosure of capital requirements and how capital is managed would not
      provide useful information or distorts a financial statement user's
      understanding of an enterprise's capital resources, the enterprise should
      disclose separate information for each capital requirement to which the
      enterprise is subject.

       Other disclosures

115   An enterprise should disclose in the notes:
      (a) the amount of dividends proposed or declared before the financial
           statements were approved for issue but not recognised as a
           distribution to owners during the period, and the related amount per
           share; and
      (b)    the amount     of   any   cumulative    preference    dividends    not
            recognised.


116    An enterprise should disclose the following, if not disclosed elsewhere
       in information published with the financial statements:
      (a)     the domicile and legal form of the enterprise, its country of
              incorporation and the address of its registered office (or principal
              place of business, if different from the registered office);
      (b)     a description of the nature of the enterprise's operations and its
              principal activities; and
      (c)     the name of the parent and the ultimate parent of the group.




                                                                                 24
                                                                                    Appendix I


        The objective of the revision of and comparison with the existing AS
        1 (issued 1979), Disclosure of Accounting Policies
        Objective of the revision of the existing AS 1: Disclosure of Accounting
        Policies

        The Institute of Chartered Accountants of India had issued Accounting Standard (AS)
        1, Disclosure Accounting Policies, in 1979 based on the then International
        Accounting Standard (IAS) 1, Disclosure of Accounting Policies. Since then
        significant developments in accounting have taken place including the recent revision
        of Schedule VI to the Companies Act, 1956, requiring current/non-current
        classification of assets and liabilities. Further, the International Accounting Standard
        (IAS) 1 has also undergone significant changes including its scope which now
        comprises presentation of financial statements including disclosure of accounting
        policies. Recognising the aforesaid developments, the objective of the revision of the
        existing AS 1 is to bring about changes in the Standard commensurate with the
        requirements of the existing law and the existing notified Accounting Standards.
        Thus, while the Indian Accounting Standard (Ind AS) 1, Presentation of Financial
        Statements, which was placed by the Ministry of Corporate Affairs on its website in
        2011, is based on the framework of the Indian Accounting Standards and the
        expected changes in the relevant provisions of law, revision of the existing AS 1 does
        not contain various requirements included in Ind AS 1 such as the concepts of `other
        comprehensive income', statement of changes in equity, permission to depart from
        the requirements of the Accounting Standards in extremely rare circumstances where
        it is felt that the adoption of the requirement of an AS would be so misleading to
        conflict with the objective of financial statements and presentation of comparative
        information in minimum two balance sheets where restatement of changes in
        accounting policies or correction of errors is required and requirements pertaining to
        presentation of puttable financial instruments.

        Comparison with the existing AS 1: Disclosure of Financial Instruments

        AS 1 (revised) generally deals with presentation of financial statements, whereas the
        existing AS 1 (issued 1979) deals only with the disclosure of accounting policies. The
        scope of AS 1 (revised) is thus much wider and line by line comparison of the
        difference with the present standard is not practicable. However, the major
        requirements as laid down in AS 1 (revised) are as follows:


 (i)       An enterprise shall make an explicit statement in the financial statements of
           compliance with all the Accounting Standards.


(ii)       AS 1 (revised) requires presentation and provides criteria for classification of
           Current / Non- Current assets / liabilities.


(iii)      AS 1 (revised) requires disclosure of judgments made by management while
           framing of accounting policies. Also, it requires disclosure of key assumptions
           about the future and other sources of measurement uncertainty that have



                                                                                             25
       significant risk of causing a material adjustment to the carrying amounts of assets
       and liabilities within next financial year.


(iv)   AS 1 (revised) requires classification of expenses to be presented in the
       statement of profit and loss based on nature of expenses.


(v)    In respect of reclassification of items, AS 1 (revised) besides requiring disclosure
       of reclassification adjustments in the statement of profit and loss also requires
       disclosure of nature, amount and reason for reclassification in the notes to
       financial statements.


(vi)   AS 1 (revised) requires the financial statements to include Movements in Equity
       to be shown as a part of the balance sheet which, inter alia, includes
       reconciliation between opening and closing balance for each component of
       equity.




                                                                                        26
 
 
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