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Details on The Of Withdrawal of IAS 30 in IFRS 7

Withdrawal of IAS 30 in IFRS 7

Withdrawal of IAS 30 in IFRS 7: The Council of the Institute of Chartered Accountants of India (ICAI) issued Accounting Standard (AS) 30, Financial Instruments: Recognition and Measurement, Accounting Standard (AS) 31, Financial Instruments: Presentation in year 2007 and Accounting Standard (AS) 32, Financial Instruments: Disclosures in year 2008. These Accounting Standards were to come into effect in respect of accounting periods commencing on or after April 1, 2009, and were to be recommendatory in nature for an initial period of two years, thereafter, these were to become mandatory in respect of accounting periods commencing on or after April 1, 2011.

Owing to global financial crisis which raised issues regarding accounting treatment of financial instruments, various accounting standards setting bodies including the ICAI examined these aspects. Later, the ICAI withdrew the recommendatory as well as mandatory status of AS 30, AS 31 and AS 32 in March 2011 by means of an announcement. The announcement clarified that considering that International Accounting Standard (IAS) 39.

Withdrawal of IAS 30 in IFRS 7

Financial Instruments: Recognition and Measurement, issued by the International Accounting Standards Board (IASB), on which AS 30 was based, was under revision by the IASB. AS 30 was not expected to be continued in its present form, i.e., was expected to be revised. Further, the status of AS 30, AS 31 and AS 32 was clarified as below:

(i) To the extent of accounting treatments covered by any of the existing notified Accounting Standards (e.g. AS 11, AS 13 etc.), the existing Accounting Standards would continue to prevail over AS 30, AS 31 and AS 32.

(ii) In cases where a relevant regulatory authority has prescribed specific regulatory requirements (e.g. Loan impairment, investment classification or accounting for securitisations by the RBI, etc.), the prescribed regulatory requirements would continue to prevail over AS 30, AS 31, AS 32.

(iii) The preparers of the financial statements are encouraged to follow the principles enunciated in the accounting treatments contained in AS 30, AS 31 and AS 32 subject to (i) and (ii) above.”

Thereafter, the ICAI issued a Guidance Note on Accounting for Derivative Contracts, in June 2015, effective from accounting periods beginning on or after 1st April, 2016; its earlier application is also encouraged. The Guidance Note stated that from the date this Guidance Note comes into effect, application of (AS) 30, Financial Instruments: Recognition and Measurement, stands withdrawn to the extent of the guidance covered for accounting for derivatives is within the scope of Guidance Note on Accounting for Derivative Contracts.

Apart from the above, the Council at its 360th meeting held on November 7-9, 2016, noted that with implementation of Indian Accounting Standards (Ind AS) in India, many companies will be preparing their financial statements as per Ind AS, which includes Indian Accounting Standards on financial instruments which are based on current IFRS/ IAS issued by International Accounting Standards Board (IASB).

In view of the above, the Council noted that there may not be any users of (AS) 30, Financial Instruments: Recognition and Measurement, (AS) 31, Financial Instruments: Presentation and (AS) 32, Financial Instruments: Disclosures, and retaining these Accounting Standards will create confusion. Accordingly, the Council decided to withdraw Accounting Standards (AS) 30, Financial Instruments: Recognition and Measurement, (AS) 31, Financial Instruments: Presentation, (AS) 32, Financial Instruments: Disclosures. An announcement ‘Application of (AS) 30, Financial Instruments: Recognition and Measurement’ issued by ICAI in March 2011 on status of AS 30, AS 31 and AS 32 also stands withdrawn.

Withdrawal of IAS 30 in IFRS 7

 Disclosures—Transfers of Financial Assets (Amendments to IFRS 7), issued in October 2010. An entity shall apply those amendments for annual periods beginning on or after 1 July 2011. Earlier application is permitted. If an entity applies the amendments from an earlier date, it shall disclose that fact. An entity need not provide the disclosures required by those amendments for any period presented that begins before the date of initial application of the amendments.

  • An entity shall apply those amendments when it applies IFRS 13.
  • Presentation of Items of Other Comprehensive Income (Amendments to IAS 1), issued in June 2011, amended. An entity shall apply that amendment when it applies IAS 1 as amended in June 2011.
  • Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7), issued in December 2011, added . An entity shall apply those amendments for annual periods beginning on or after 1 January 2013 and interim periods within those annual periods. An entity shall provide the disclosures required by those amendments retrospectively.

Withdrawal of IAS 30 in IFRS 7

When an entity first applies the classification and measurement requirements of IFRS 9, it shall present the disclosures IFRS if it elects to, or is required to, provide these disclosures in accordance with IFRS 9.

At the date of initial application of IFRS 9 an entity shall disclose the changes in the classifications of financial assets and financial liabilities, showing separately:

  1. the changes in the carrying amounts on the basis of their measurement categories in accordance with IAS 39 (ie not resulting from a change in measurement attribute on transition to IFRS 9); and
  2. the changes in the carrying amounts arising from a change in measurement attribute on transition to IFRS 9.

The disclosures in this need not be made after the annual period in which IFRS 9 is initially applied. In the reporting period in which IFRS 9 is initially applied, an entity shall disclose the following for financial assets and financial liabilities that have been reclassified so that they are measured at amortised cost as a result of the transition to IFRS 9:

  1.  The fair value of the financial assets or financial liabilities at the end of the reporting period.
  2. the fair value gain or loss that would have been recognised in profit or loss or other comprehensive income during the reporting period if the financial assets or financial liabilities had not been reclassified.
  3. The effective interest rate determined on the date of reclassification.
  4. the interest income or expense recognised.

Withdrawal of IAS 30 in IFRS 7

If an entity treats the fair value of a financial asset or a financial liability as its amortised cost at the date of initial application and  of IFRS 9 (2010)), the IFRS 7 14 IFRS Foundation disclosures in (c) and (d) ,  shall be made for each reporting period following reclassification until derecognition. Otherwise, the disclosures is need not be made after the reporting period containing the date of initial application. If an entity presents the disclosures set out at the date of initial application of IFRS 9, those disclosures, and the disclosures of IAS 8 during the reporting period containing the date of initial application, must permit reconciliation between:

  1. The measurement categories in accordance with IAS 39 and IFRS 9.
  2. The line items presented in the statements of financial position.

If an entity presents the disclosures set out at the date of initial application of IFRS 9, those disclosures, and the disclosures of this IFRS at the date of initial application, must permit reconciliation between:

  1. the measurement categories presented in accordance with IAS 39 and IFRS 9.
  2. the class of financial instrument at the date of initial application.

Withdrawal of IAS 30 in IFRS 7

Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27), issued in October 2012, amended . An entity shall apply that amendment for annual periods beginning on or after 1 January 2014. Earlier application of Investment Entities is permitted. If an entity applies that amendment earlier it shall also apply all amendments included in Investment Entities at the same time.

Withdrawal of IAS 30 in IFRS 7

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