FRRB Finds Major Non-Compliances in PPE, Investment Property & Intangibles.
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
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- Last Updated on 6 May, 2023
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The Financial Reporting Review Board (FRRB) of ICAI conducts a review of general purpose financial statements of various enterprises for compliance with generally accepted accounting principles (GAAP), compliance with the reporting obligations of the auditor and compliance with disclosure requirements prescribed by regulatory bodies, statutes and rules and regulations relevant to the enterprise. FRRB was constituted as a proactive mechanism to improve financial reporting practices. This story will take a closer look at some of the key non-compliances and errors observed by the FRRB in relation to Ind AS 16, Property, Plant and Equipment, Ind AS 41, Investment Property & Ind AS 38, Intangible Assets. It will act as a reference point to check compliance with the applicable reporting framework while finalising the annual financial statements of various entities.
I. In-appropriate Reporting
Under a note to the financial statements on Non-Current Assets (Net), the closing balance of the previous year and the opening balance of the current year were different.
II. Relevant Provisions
An entity shall 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 entity‘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 Ind AS 8; or (b) An Ind AS requires a change in presentation
III. FRRB Observation
The closing balance of non-current assets of the previous year was disclosed at Rs. XX and the current year‘s opening balance of non-current assets was stated at Rs. YY. The closing balance of the previous year and the opening balance of the current year of the same item cannot be different.
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