ICAI proposes amendment to IND AS-1 and IND AS-116


  • IASB proposed changes to IFRS accounting taxonomy 2022 for amendments to IFRS 16 – ‘Leases’ (issued in September 2022) and IAS 1 – ‘Presentation of Financial Statements’ (issued in October 2022). This exposure draft was open for comments till Dec 28, 2022.
  • Accounting Standard Board (ASB) of ICAI issues Exposure Drafts of amendments to IND AS-116 (Leases) and IND AS-1 (Presentation of Financial Statements) in pursuant to amendments in IFRS standards. This exposure draft is open for comments till Jan 30, 2023.

Proposed Amendments

A. Classification of Debt as current or non-current (IND AS-1)
The amendments to IND AS 1 specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Rather, the amendment requires a company to disclose information about these covenants in the financial statements’ notes.
Under this amendment, only covenants of a liability, which an entity must comply with on or before the reporting date affect the classification of that liability as current or non-current. The amendments are linked to the requirements on disclosure about such liabilities.
B. Sale and Leaseback (IND AS-116)
The amendments to IND AS-116 contains a new Paragraph 102A which is proposed to be inserted. It states that seller-lessee should not recognize gain / loss which relates to ROU Asset retained by him on computation of ‘lease payments’ or ‘revised lease payments’.
C. Applicability
The amendments are effective for annual reporting periods beginning on or after April 1, 2024, with early
adoption permitted.

SW Remarks:
ASB of ICAI has issued exposure draft of amendments to IND AS-1 & IND AS-116 to align it with
proposed amendments introduced in IFRS-16 & IAS-1 by IASB. ICAI has given few examples to
explain the amendment in IND AS-116 which is available at below link. This exposure draft is
open for comments till Jan 30, 2023 at icai.org.

Pulkit Singh, Audit Associate, SW India

#SWIndia #InsightsbySW #icai #audit #assurance