Understanding the Requirements for Non-Profit Entities Engaging in Manufacturing | Ind AS 108
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 17 May, 2023
The management of Section 8 company (registered under the Companies Act, 2013 with the objective of the social welfare of needy and poor persons) is under the impression that Ind AS 108, Operating Segments, is not applicable to the company as it is not carrying any type of business, whose nature and financial effects are required to be disclosed under segment reporting. The Auditors have raised concerns about the non-preparation of the Operating Segment Report by the company. To resolve the issue the company has sought the opinion of the Expert Advisory Committee (EAC) on the applicability of Ind AS 108, Operating Segment, on the company.
The Expert Advisory Committee (EAC) has noted that an entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates. Further, there is no specific exemption available to any entity from Ind AS 108, Operating Segment, on the basis that it is a not-for-profit organization or section 8 company. The objective of the company is not the generation of profit, however, it is engaged in business activities from which it may earn revenues and incur expenses. Accordingly, the Expert Advisory Committee (EAC) concluded that the company should draw Operating Segment Report as per Ind AS and determine its operating and reportable segments considering its own facts and circumstances.
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