Key Non-compliances Observed by FRRB in Reporting of Equity in the Financial Statements
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 4 September, 2023
Latest from Taxmann
The Financial Reporting Review Board (FRRB) of ICAI performs an assessment of general-purpose financial statements of different entities to ensure adherence to generally accepted accounting principles (GAAP), compliance with auditor’s reporting obligations, and compliance with disclosure requirements set by regulatory bodies, laws, and applicable regulations. The FRRB was established as a proactive mechanism to enhance financial reporting and auditing practices. These findings will serve as a benchmark to verify whether entities have followed disclosures required under schedule III and principles prescribed under Ind AS have been followed while preparing financial statements.
a) Inappropriate Reporting
A company has disclosed separately shown two different notes, (a) Note on Equity Share Capital and (b) Note on Other Equity.
b) Relevant Provisions
Guidance Note on Division II – Ind AS Schedule III to the Companies Act, 2013
(i) Para 4.2 requires Financial Statements to include Balance Sheet, Statement of Changes in Equity for the period, Statement of Profit and Loss for the period and Notes.
(ii) Para 8.2 requires following line items are to be disclosed on the face of the Balance Sheet: Equity Share Capital; and Other Equity;
(iii) It also require that a Statement of Changes in Equity should be drawn comprising (a) Equity Share Capital and (b) Other Equity
c) FRRB Observation
The company failed to disclose (a) Note on Equity Share Capital and (b) Note on Other Equity under one sub-head “Statement of Changes in Equity”. Thereby violating requirements of Division II – Ind AS Schedule III to the Companies Act, 2013
Click Here To Read The Full Story
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
