Key Highlights of Covid 19 Relief Package Announced By RBI on 17.04.2020

The Governor of our Central Bank (Reserve Bank of India) announced today on 17.04.2020, certain additional measures to tackle COVID-19 crisis. Detailed note on key highlights are attached.

Key Highlights of Covid19 Relief Package Announced By RBI Governor on 17.04.2020

Disclaimer

The information contained herein is in summary form based on Governor’s Statement dated 17th April 2020 issued by RBI as per link attached above. The said information should be read with Press Release(s) and directions issued by RBI giving effect to above decisions. While the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties, express or implied, as to the accuracy or completeness of such information. Reader should conduct and rely upon their own examination, investigation and analysis and are advised to seek their own professional advice. The information and data contained herein is not a substitute for the reader’s independent evaluation and analysis. This document is not an offer, invitation, advice or solicitation of any kind. We accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies on it.

Posted in Regulatory |

Clarification Regarding Short Deduction of TDS/TCS

Clarification issued by CBDT vide no. 08/2020 dated 13th April, 2020 regarding short deduction of TDS/TCS due to increase in rates of surcharge by Finance (No. 2) Act, 2019.

For details please refer the attached document:-

Clarification On short Deduction of TDS-TCS

 

DISCLAIMER

This document has been prepared in summary form by Dewan P. N. Chopra & Co. based on Circular No. 8/2020 issued by CBDT dated 13th April 2020. For further details, please refer the said circular as per link attached above. While the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties, express or implied, as to the accuracy or completeness of such information. Reader should conduct and rely upon their own examination, investigation and analysis and are advised to seek their own professional advice. The information and data contained herein is not a substitute for the reader’s independent evaluation and analysis. This document is not an offer, invitation, advice or solicitation of any kind. We accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies on it.

Posted in Direct Tax, Taxation |

National Financial Reporting Authority (NFRA)

National Financial Reporting Authority (NFRA) has been constituted on 1st October 2018 under Section 132 of the Companies Act, 2013 vide MCA Gazette Notification No. 5099(E) dated 1st October, 2018. Thereafter, MCA has notified National Financial Reporting Authority Rules, 2018, vide Gazette Notification No. G.S.R. 1111(E). dated 13.11.18.

The NFRA is to be an independent regulator overseeing the auditing profession, and its creation was first recommended by the Standing Committee on Finance in its 21st report.

For more details, Please go through attached document.

NFRA_Report

Disclaimer:

The information contained herein is in summary form based on information available on different website mentioned above. The said information should be read with various notifications, circulars and FAQs release time to time. While the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties, express or implied, as to the accuracy or completeness of such information. This document is not an offer, invitation, advice or solicitation of any kind. We accept no responsibility for any errors it may contain or for any loss, howsoever caused or sustained, by the person who relies on it.

Posted in Audit & Assurance |

Auditing Big Data

The difference between data and information is usually understood. Data is raw, and requires processing. Data can be simple but random and needs organization. When the data is processed, organized, analyzed and converted into information, then it is ready to help in the decision making.

Big data means large, complex data sets (such as website hits, social media posts, etc.) that may require significant processing capabilities and cannot be processed using traditional method. The data can be originated from various sources such as social media, websites, various surveys, etc.

Technical advances in storage capacity, super human processors combined with analytic tools, has make organizations to use big data to their competitive advantages and understand emerging business trends. With opportunities comes the risk also. Risks such as privacy, security, data integrity, quality and complexities.

Auditing big data is the new challenge considering the risk associated with it, Risk Advisory across the globe is finding solutions to handle this. Auditing principles such as looking at completeness and accuracy of data still holds good, however, change in the audit methodologies is the requirement of the hour.

Steps of approaching audit of big data remain same i.e. risk assessment, map the controls and to assess the same from the perspective of design and operating effectiveness and customizing the audit approach.

A typical audit program for big data review would be:

Governance:

  • Management of data -> in-house or through a service provider?
  • Contract detailing the roles, obligations and responsibilities (if managed through service provider)
  • Is data ownership clearly defined (if managed internally)
  • Strategy for data storage – own server, cloud or in a data center?
  • Responsibility for handling of data – Documented?
  • Business continuity and disaster recovery plans (in place or not)?

Input / Source data validation

  • Whether sources of data identified or not?
  • How to ensure the reliability of the data?
  • Whether data is captured in the format so that it can be used and processed?
  • How is completeness and accuracy of data ensured?
  • How it is being ensured that data is safe?
  • Whether the company has adequate tools for analytics?
  • Whether information processing objectives met by the data analytics tools?
  • Are results of tool reliable?
  • How are the results presented?
  • How to ensure the integrity of information received?

Storage and retrieval

  • How to ensure the continuous availability of data ensured?
  • Policies exist on data storage, restoration and retrieval is in place?
  • How is data backup and restoration done?

 

Disclaimer:

The information contained herein is in summary form and is based on information available in public domain. While the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties, express or implied, as to the accuracy or completeness of such information. This document is not an offer, invitation, advice or solicitation of any kind. We accept no responsibility for any errors it may contain or for any loss, howsoever caused or sustained, by the person who relies on it.

Posted in Audit & Assurance, Risk Advisory |

Impact of COVID-19 on Presentation of Financial Statements, Consolidated Financial Statements, Property Plant & Equipment and Borrowing Cost

1.    Presentation of Financial Statements [Ind AS 1]

  • Breach of loan covenants (including classification of liabilities into current and non-current)

Ind AS 1- Due to COVID-19 there may be instances of breach of loan covenants which may trigger the liability becoming due for payment and liability becoming current. However, as per paragraph 74 of Ind AS 1, such a liability shall not be classified as current, 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.

  • Sources of estimation uncertainty under Ind AS 1

Paragraph 125 of Ind AS 1, Presentation of Financial Statements, requires an entity to disclose information about the assumptions it makes about the future, and other major sources of estimation of 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. COVID-19 may have created many uncertainties about the likely future scenarios which may affect the estimations of amounts recognised in the balance sheet as of reporting date. Entities shall be guided by the prescriptions in paragraphs 125 to 133 of Ind AS 1.

  • Comparative information

Ind AS 1 requires presentation of minimum comparative information. Framework for the preparation and presentation of financial statements under Ind AS considers comparability as an important qualitative characteristic of financial statements. The Framework requires that users must be able to compare the financial statements of an entity through time in order to identify trends in its financial position and performance and also compare it with financial statements of other entities. COVID-19 may have affected the financial performance and financial position of entities. Therefore, preparers may consider making adequate disclosures and explanatory notes regarding the impact of COVID 19 on its financial position, performance and cash flows.

2.    Consolidated Financial Statements [Ind AS 110 / AS 21]

Ind AS 110 prescribe that the financial statements of parent and subsidiaries used in the preparation of the consolidated financial statements are usually drawn upto the same date. It may be noted that in any case, the difference between the reporting dates should not be more than three months.

3.    Property Plant and Equipment (PPE) [Ind AS 16/ AS 10]

Ind AS 16 and AS 10 require that useful life and residual life of PPE needs revision in annual basis. Due to COVID-19, PPE can remain under-utilized or not utilized for a period of time. It may be noted that the standards require depreciation charge even if the PPE remains idle. Further, COVID-19 impact may have affected the expected useful life and residual life of PPE.

The management may review the residual value and the useful life of an asset due to COVID 19 and, if expectations differ from previous estimates, it is appropriate to account for the change(s) as an accounting estimate in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors and AS 5, Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

4.    Borrowing Costs [Ind AS 23 / AS 16]

Above standards require that the capitalisation of interest is suspended when development of an asset is suspended. The management may consider this aspect while evaluating the impact of COVID-19.

 

DISCLAIMER:

The information contained herein is in summary form and is based on information available in public domain. While the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties, express or implied, as to the accuracy or completeness of such information. Reader should conduct and rely upon their own examination, investigation and analysis and are advised to seek their own professional advice. This document is not an offer, invitation, advice or solicitation of any kind. We accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies on it.

Posted in Audit & Assurance |