10 Accounting Standards

8/14/2019 10 Accounting Standards

1/133

Prepared By : Kamlesh R Dama

Sr.No Accounting Standards Applicabilty

AS-1 Disclosures of Accounting Polices. All

AS-2 Valuation of Inventories. All

AS-3 Cash Flow Statement. Level-I

AS-4

AS-6 Depreciation Accounting All

AS-7 Construction Contracts ( Revised ) All

AS-8 Withdrawn. N A

AS-9 Revenue Recognition. All

AS-10 Accounting for fixed Assets. All

AS-11 Effect of Change in Foreign Exchange Rates All

AS-12 Accounting for Government Grants. All

AS-13 Accounting for Investments. All

AS-14 Accounting for Amalgamation. All

AS-15 Employee Benefit ( Revised 2005 ) AllAS-16 Borrowing Costs. All

AS-17 Segment Reporting. Level-I

AS-18 Related Party Disclosure. Level-I

AS-19 Accounting For Lease. All

AS-20 Earning Per Share Level-I

AS-21 Consolidated Finanacial Statements.

AS-22 Accounting for Taxes on Income. For Listed Company

AS-24 Discontinuing Operations. Level-IAS-25 Interim Fianancial Reporting.

AS-26 Intangible Assets. All

AS-27 Fianacial reporting of Interest in Joint Venture.

AS-28 Impairment of Assets. All

AS-29 Provision, Contingent Liabilities and contingent All

AS-5

M/s Gavade & Associates

AS-23

Accounting Standards

Comtingencis and Events Occuring after the

Balance Sheet Date

Net Profit or Loss for the period , prior period

items and Change in Accounting Policies

Accounting for Investment in Associates in

Consolidated Financial Statements.

All

All
http://localhost/var/www/apps/conversion/tmp/scratch_1/Accounting%20Standards.xlshttp://localhost/var/www/apps/conversion/tmp/scratch_1/Accounting%20Standards.xlshttp://localhost/var/www/apps/conversion/tmp/scratch_1/Accounting%20Standards.xlshttp://localhost/var/www/apps/conversion/tmp/scratch_1/Accounting%20Standards.xlshttp://localhost/var/www/apps/conversion/tmp/scratch_1/Accounting%20Standards.xlshttp://localhost/var/www/apps/conversion/tmp/scratch_1/Accounting%20Standards.xls


2/133

Back

AUDIT CHECKLIST FOR COMPLIANCE WITH ACCOUNTING

AS-1 : DISCLOSURE OF ACCOUNTING POLICIES

Particulars

A. Significant accounting policies1. Have the following fundamental accounting policies been

followed?

a. Going Concern

b. Accrual

c. Consistency

2. Is there a list of all significant policies adopted?

(For both current period and previous period)3. If the answer is yes, are all the areas listed below (illustrative)

covered, if applicable?

a. Method of accounting

b. Method of depreciation

c. Valuation of stock

d. Valuation of fixed assets

e. Valuation of investments

f. Allocation of expenditure during construction

period

g. Deferred revenue expenditure

h. Translation of foreign currency transactions andbalances

i. Disclosure of events subsequent to the balance sheet.

j. Recognition of profit on long term contracts

k. Treatment of

(i) Contingent liabilities

(ii) Borrowing costs

(iii) Lease accounting

(iv) Taxes on income

(v) Goodwill and other intangible assets

(vi) Research and development expenditure

(vii) Cost for retirement benefits

(viii) Prior period items

(ix) Preliminary expenses

(x) Impairment of assets

4. Have the following criteria forselection of accounting policies

been followed?
http://localhost/var/www/apps/conversion/tmp/scratch_1/Accounting%20Standards.xlshttp://localhost/var/www/apps/conversion/tmp/scratch_1/Accounting%20Standards.xls


3/133

a. Major criteria True and fair view

b. Secondary criteria

(i) Materiality

(ii) Prudence

(iii) Substance over form

5. Have the Accounting Policies listed above been applied inpreparation of financial statements? (Review each policy

independently)

B. Disclosure1. Have all the applicable accounting policies been disclosed?

2. If yes, are they disclosed in one place preferably in the notes to

accounts?

3. Is the policy drafted in a clear and concise manner?

4. Has specific disclosure been made if fundamental accounting

assumptions are not followed?

C. Changes in Accounting Policy1. Have there been any changes in any Accounting Policy? (Note :

Do a review for each accounting policy)

2. Has the change been made only

a. For compliance with the Statute of Accounting

Standard

b. If Management considers the change will result in a

more appropriate presentation of Financial Statements

3. Are the Changes in the policies going to have a material effect on

the accounts of the current period?

4. Are the Changes in the policies going to have a material effect on

the accounts of the later period?5. Can the change in the policies and its subsequent effects be

quantified?

6. Where the effect of the change cannot be quantified, has this

been adequately disclosed?

7. Has adequate disclosure been made regarding the change in

method and its impact on the financial statements?AS-2 : (REVISED) VALUATION OF INVENTORIES

Particulars

A. Applicability1. Has it been ensured that this standard applies to accounting for

inventories other than the following?


4/133

a. Work-in-progress arising under construction contracts, including

directly related services contracts

b. Work-in-progress arising in the ordinary course of business of

service providers

c. Shares, debentures and other financial instruments held as stock

in-traded. Producers Inventories of livestock, agricultural and forest

products and mineral oils, ores and gases etc.

B. Information1. Are the following workings available? a. Inventory items and codes

b. Cost sheets (if the volume is high, sample check and

append a note)

c. Inventory valuation statement as at valuation date

d. Note on procedure for valuing inventory

e.

Note on method of determining net realisable valueC. Basis of inventory valuation1. Has it been ensured that the acceptable basis of inventoryvaluation or measurement of inventories is at lower of cost or

Net Realisable Value (NRV)?

2. Does Cost comprise the following components only?a. All costs of purchase net of duty drawback and trade

discount

b. Cost of conversion

(i) Direct Labour

(ii) Variable production overheads based on actual

production (iii) Fixed production overheads based on normal capacity

c. Other costs incurred in bringing the inventories to their

present location and condition

d. If inventory is a qualifying asset, has borrowing cost as per

AS-16 been included.

3. Has it been ensured that the following costs have beenexcluded from the cost of inventories?

a. Abnormal amounts of wasted materials, labour and other

production costsb. Storage costs

c. Administrative overheads that do not contribute to bringing the

inventories to their present location and condition

d. Selling and distribution of expenses


5/133

4. Has it been ensured that the following cost formulae havebeen used for determining the historical cost of inventories?

a. For items not ordinarily interchargeable Specific identification

method

b. For other items First in First Out (FIFO) or Weighted AverageCost method.

c. Standard Cost or Retail Method may be used if results

approximate actual cost under 4(b) above.

5. Has NRV been ascertained as the estimated selling price inthe ordinary course of business fees the estimated costs of

completion and costs necessary to make the sale based on

realiable evidence after considering Adjusting Events if any

after the Balance Sheet date?

6. Have items whose NRV is below cost been carried at NRV?

7. Have the following been ensured?a. Materials and other supplies held for use in the production of

inventories are not written down below cost if the finished products in

which they will be used are expected to be sold at or above cost.

b. When there has been a decline in the price of materials and it is

estimated that the cost of the finished products will exceed NRV, the

replacement cost of materials may be the best available measure of

their NRV.D. Disclosure in the Financial Statements1. Has the following information been disclosed in the financial

statements?

a. The accounting policies adopted in measuring inventories

including cost formula used.

b. Total carrying amount of inventories and its classification as raw

materials and components, work-in-progress, finished goods, stores

and spares and loose tools.AS-3 : (REVISED) CASH FLOW STATEMENTS

Particulars

A. Preparation of cash flow statement

1. Have the operating cash flows been presented as follows? a. Listed companies Indirect approach


6/133

b. Insurance companies direct approach

c. Others Direct or indirect approach2. Have the cash flows during the period been classified asfollows?

a. Operating cash flows

b. Investing cash flows c. Financial cash flows3. Has the enterprise opted to report the cash flows arisingfrom the operating, financial or investing activities on a net basis

correctly?

4. Where the enterprise is a financial enterprise, has it opted toreport the cash flows arising from each of the following activities

on a net basis?

a. Cash receipts and payments for the acceptance and repayments

of deposits with a fixed maturity date

b. The placement of deposits with and withdrawal of deposits fromother financial enterprises andc. Cash advance and loans made to customers and the repayment

of the same

5. Except to the extent that cash flows are reported on a net basis

(as stated in 3 and 4 above), has the enterprise reported separately

major classes of gross cash receipts and gross cash payments arising

from investment and finance activities?

6. Where cash flows arise from transactions in a foreign currency,

has the same been reported in the enterprises reporting currency

applying the prevailing exchange rate at the date of the cash flow?

7. Has the effect of changes in exchange rates on cash and cash

equivalents held in a foreign currency been disclosed separately in

Cash flow statement?8. Are the cash flows associated with extraordinary items classified

and disclosed separately as arising from operating, financing or

investing activities as appropriate?

9. Are the cash flows arising from interest paid, interest anddividends received classified in the following manner?

a. In case of financial enterprise Operating activities

b. In case of other enterprises (i) Interest paid financing activities

(ii) Interest and dividends received Investing activities10. Are the cash flows arising from tax on income separately

disclosed and classified as arising from operating activities except in

cases where the same can be identified as arising from financing or

investing activities?


7/133

11. Has the enterprise reported separately the cash flow between

itself and the associate / joint venture when accounting for an

investment in an associate or a subsidiary or a joint venture?12. Are the aggregate cash flows arising from acquisition and

disposal of subsidiaries or other business classified separately as

arising from investing activities?13. Has the enterprise disclosed in aggregate, cash flows in respect

of both acquisition and disposals of subsidiaries or other business as

follows? a. Total purchase or disposal consideration

b. Portion of consideration discharged by means of cash or

cash equivalents.B. Disclosure1. Having investing and financing transactions that do not require

the use of cash or cash equivalent been disclosed elsewhere in the

financial statements in a way that provided all the relevant informationabout these transactions?2. Has the enterprise disclosed the components of cash and cash

equivalents and has a reconciliation of the amounts in its cash flow

statement with the equivalent items reported in the Balance Sheet

been presented?

3. Has the enterprise disclosed the amount of significant cash and

cash equivalent balances held by the enterprise that are not available

for use by it?

AS-4 : CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHE

Particulars

A. Applicability1. Have the audit procedures ascertained any items of

Contingencies and Events Occurring After the Balance Sheet Date

like the following?

a. Suit filed by / against enterprise

b. Claims not acknowledged as debts c. Guarantees given

d. Bills discounted

e. Natural calamity such as fire, flood, earthquakes, riots etc.

f. Theft of stocks, assets, cash etc.

g. Major clients / customers becoming bankrupt

h. Claims made by suppliers


8/133

i. Wage revisions

j. Change in policy of Government

k. Other such items such as amalgamation, mergers etc.

2. Has a list of all such contingencies been prepared?

B. Contingency treatment1. Is it probable that future events will confirm, after taking intoaccount any related probable recovery that an asset has been

impaired or a liability incurred as at the Balance Sheet Date?

2. Can a reasonable estimate of the resulting loss be made?

3. Is the estimate of provision for liability / write off supported by a

working note?

4. If the answer to the above conditions is yes, has the amount of

loss as quantified above been charged to the P & L A/c.?5. If the contingency fulfills only of the two specified conditions,

has a disclosure been made in the notes to accounts?

6. Have you ensured that contingent gains have not been

recognized in the financial statements except when the realisation of

the gain is virtually certain?

C. Contingency Disclosure1. Have you ensured that the following information has been

disclosed?

a. Nature of contingency / event

b. Uncertainities which will affect future outcome

c. Estimate of financial effect, or, a statement that financial

effect cannot be quantified.

D. Events occurring after the Balance Sheet Date Treatment1. Adjusting events

a. Do the audit procedures of events occurring after the balance

sheet date indicate any instances ofadditional evidence as to the

status of assets and liabilities at the date of Balance Sheet date?

b. Has the Going Concern assumption been tested for its validity.

c. Has the list of adjusting events been prepared for each item of

asset and liability as at the Balance Sheet date?d. Have the assets/liabilities been adjusted on the basis of the

foregoing?e. Have dividends proposed/declared after Balance Sheet date but

before approval of financial statements been provided for in the

Balance Sheet?

2. Non Adjusting Events


9/133

a. Have audit procedures of Events occurring after the Balance

Sheet date identified new events, which are material and involve

financial commitment.b. Have the following disclosure been made in the report of the

approving authority (Directors Report)

(i) Nature of event(ii) Estimate of financial effect or a statement that financial

effect cannot be quarantified.

AS-5 : (REVISED) NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITE

Particulars

A. Applicability1. Are all items of income and expenditure, which are recognized ina period, included in the determination of net profit or loss for the

period?

2. Are the exclusions permitted, or required by other standards?

3. Are the following components disclosed on the face of the P &

La/c?

a. Profit or Loss from ordinary activities and

b. Extraordinary items

4. Has the nature and amount of each extraordinary item been

separately disclosed in the P & L a/c in a manner that its impact on

current rofit/loss can be erceived?

5. Have the nature and amount of items of income andexpenditure been disclosed separately where their size, nature and

incidence is relevant to explain the performance of the enterprise for

the eriod?B. Prior Period Items1. Do prior period items refer only to items of income or

expenses, which arise in the current period as a result of errors or

omissions in one or more prior periods?2. Has a list of these items been made?

3. Have these items been separately disclosed in the P & La/c in a

manner such that their impact on current period profit / loss can beerceived?

C. Changes in Accounting Estimates1. Is there any change in any accounting estimate?

2. Does the change have a material financial impact and has it been

quantified?

3. Have the particulars of the change, including the financial impact,

been disclosed in the financial statements?


10/133

4. Has it been ensured that the nature and amount of change in an

accounting estimate which has a material effect in the current period,

or which is expected to have a material effect in subsequent periods,

has been disclosed?5. Has the fact of a change in accounting estimate, where it is

impractical to quantify the amount, been disclosed?Changes in Accounting Policy

1. Refer Checklist for AS 1

AS-6 : (REVISED) DEPRECIATION ACCOUNTING

Particulars

A. Applicability1. Has the standard been applied to all depreciable assets of the

entity?

2. AS 6 does not cover certain specific items. Has the auditee

ignored such exceptions (e.g. Goodwill, Livestock)?

B. Depreciation

1. Is there a list of fixed assets? Is there a Fixed Asset register?

2. Is the estimated useful life and estimated residual value of each

3. Is the depreciable amount for each item of fixed asset defined?

4. Has the useful life of the depreciable asset been estimated after

considering the following factors?

a. Expected physical wear and tear

b. Obsolescence

c. Legal or other limits on the use of the asset.

5. Is documentary evidence available where required?

6. Has the useful life of the assets been reviewed periodically?

7. Is there a revision of the estimated useful life of the asset?

8. Is there any unamortised depreciation on revision of useful life?

9. Has the unamortised depreciation been charged over the

revised remaining useful life?

10. Has depreciation been provided on assets added or extended to

the existing assets during the year?

11. Has depreciation been provided separately on additions /

extensions to assets where the estimate of useful life can be made

independent of the existing assets?


11/133

12. Has depreciation been provided prospectively on any change

occurring in the historical value of assets due to exchange

C. Revaluation

1.

Where the depreciable assets are revalued, has depreciationbeen charged on the revalued amount?

2. Has there been a material effect on the amount of depreciationon revaluation? In case the revaluation has a material effect on the

amount of depreciation, has the same been disclosed separately in

the year in which revaluation is carried out?

D. Sale1. Has there been a sale of depreciable asset?

2. Has the surplus or deficiency, if material, been disclosed

separately?

E. Depreciation Method1. Has the same method of depreciation been considered for

similar assets or class of assets?

2. Have identical methods for calculation of depreciation been

consistently followed from one accounting period to another?

3. Has a change from one method of providing depreciation to

another been disclosed as per the requirements of AS-1 as follows?

a. Reason for the change

b. Financial effect of the change in the current and subsequent

years.4. When such a change in the method of depreciation is made, has

depreciation been recalculated in accordance with the new method

from the date of the asset coming into use?5. Has the surplus or deficiency arising from retrospective

recomputation been adjusted .n the accounts of the year when the

method has changed?

F. Disclosure1. Has the following information been disclosed in the financial

statements?

a. The historical cost or other amount substituted for historical

cost of each class of depreciable assets? b. Total depreciation for the period for each class of assets

c. The related accumulated depreciation.

d. Depreciation methods use

e. Depreciation rates for the useful lives of the assets, if they are

different from the principal rates specified in the statute governing the

enterprise.


12/133

AS-7 : (REVISED) CONSTRUCTION CONTRACTS

Particulars

A. Applicability1. Does the enterprise have any of following activities?

a. Construction contracts (including contracts for destruction

and restoration)b. Services related to contracts (Contracts involving project

management or providing architectural services, etc.)

2. Types of Construction Contracts

a. Has it been ensured that the construction contracts have been

identified as follows?

(i) Fixed price contracts (ii) Cost plus contracts

3. Have the principles of "combining and segmenting" contracts

been applied to all contracts consistently?

4. Has a list of modifications to terms of contracts been prepared

contract wise?

B. Percentage of Completion Method: (PCM)1. Can the outcome of the construction contract be estimated

reliability?

2. If yes, has the amount of revenue recognised been determined

with reference to the stage of completion of the contract act at the end

of each accounting period?3. Is the percentage of completion certified by a technical expert?

4. Has the overall assessment as to percentage of completion been

carried out satisfactorily?

5. Has the billing been done as per terms of contract?

6. Has the contractee raised any objection / dispute?

7. Have progress payments been received?

8. Has it been ensured that the costs included in the amount which

construction contract work is stated comprises following?

a. Costs specific to the contract (direct material / wages) b. Allocable costs based on normal activity

c. Other costs specifically chargeable as per terms of contract

9. Has an appropriate allowance been made for unforeseeable

factors?


13/133

10. In respect of fixed price contracts, has it been ensured that least

20-25% of the work is complete?

11. In respect of cost plus contracts, has it been ensured that costs

considered are identifiable or reasonably estimable?

C. Provision for Foreseeable Losses1. Has the provision for foreseeable loss been made in fullirrespective of extent/ percentage of completion of work?2. Does the nature and magnitude of the contract require inclusion

of indirect costs in the provision for foreseeable losses?

3. If yes, has the same been ensured?

D. Revenue1. Have the following components of contract revenue been

identified for each contract? a. Basic price

b. Price variation

c. Claims d. Incentive

e. Residual value

2. Have principles of "measurability" and "ultimate collectibility"

been fulfilled In respect of contract revenue recognised?

3. Has it been ensured that claims and variations have been

recognised only if documentary evidence of acceptance is available

b the client?4. Have all claims or penalties payable been fully provided for?

Further have contingent claims been disclosed?E. Progress Payments, Advances and Retentions1. Has it been ensured that progress payments / advances are not

included as revenue and are disclosed as liabilities / reduction from

contract WIP?2. Has retention money been shown either as receivables or by way

of a note?

F. Disclosure1. Has contract revenue been disclosed in the P & L a/c?

2. Have the following been disclosed in the Balance Sheet?

a. Amount of Construction WIP

b. Progress payments and advances received

c. Retentions on account of contracts d. Gross dues to / from contractee

AS-9 : REVENUE RECOGNITION

Particulars


14/133

A. Applicability

1. Has it been ensured that this standard has been applied in

respect of revenue arising in the course of the ordinary activities of

the enterprise from the following? a. Sale of goods

b. Rendering of services, and

c. Use by others of enterprise resources yielding interest,

royalties and dividends.

2. Is there a list of items of revenue?

B. Recognition of Revenue

1. Sale of oodsa. Have the followin conditions been fulfilled?(i) The seller of goods has transferred to the buyer the property in

the goods for a price, or all significant risks and rewards of ownershiphave been transferred to the buyer and the seller retains no effective

control of the goods transferred to a degree usually associated with

ownership; and(ii) No significant uncertainly exists regarding the amount of

consideration that will be derived from the sale of the goods..

unreasonable to expect ultimate collection?

2. Renderin of Servicesa. Has the a ro riate method been followed as er the followin ?

of service involving a single act or more than one act, where services

not performed are significant enough in relation to all transactions asa whole?

(ii) Has the "Proportionate Completion Method" been followed

only if service involves execution of more than one act?

unreasonable to expect ultimate collection?

3. Use of Enter rise Resources b othersa. as revenue een recogn se on e o ow ng ases :

(i) Interest : on a time proportion basis taking into account the

amount outstanding and the rate applicable:

the relevant agreement;

(iii) Dividends from Investments in shares: when the right to receive

is established.. sc osure

1. Where uncertainty exists and revenue recognition has

been postponed, have the circumstances been disclosed?. as revenue een sc ose on gross as s an

deductions shown separately?


15/133

AS-10 : ACCOUNTING FOR FIXED ASSETS

Particulars

A. Applicability

with the intention of being used for the purpose of producing or

providing goods or services and are not held for "sale in the normal

course of business"?

2. Has it been ensured that such assets do not include exceptions

(e.g. livestock, etc.) under AS 10?. en ca on

1. Is there a list of Fixed Assets? If so, is there a Fixed Assets

Register? Has it been updated?

. s or ca os s1. Is any fixed asset's gross book value arrived at after

revaluation? If yes, apply checklist as given in E below.2. In respect of the fixed assets stated at historical cost, does it

comprise only of the following?

a. Purchase Price net of duty drawback and trade discount

b. Costs of Installation or other such costs

c. Borrowing costs subject to AS-16.. oes nc u e any o er cos so, spec y.

4. If the asset is self-constructed have only directly attributable or

allocable costs been considered?5. In respect of assets acquired in exchange, have the assets

been recorded as follows?

a. FMV of asset iven u . o asse acqu re , w ere s more c ear y ev en

c. Net Book Value of asset given up adjusted for

consideration givon or Inkon,

6. In respect of assets acquired by exchanging securities, has the

asset been recorded at fair market value of asset acquired or of

security issued whichever is more clearly evident?7. Has capitalisation of any subsequent expenditure been justified

in terms of incremental future benefits derivable?8. In respect of fixed assets purchased at consolidated price, has

the allocation of costs been done to individual assets on the basis of

the fair value?

D. Retired Assets

1. In respect of retired assets, have they been shown at the lower

of the book value and NRV?


16/133

2. Have the retired assets been disclosed separately in the

financial statements?

3. in respect of retired /. disposed assets, has it been ensured that

losses (and gains / losses for disposed assets) have been provided

for?

E. Revaluation1. Have any fixed assets been revalued?

2. Is the process of revaluation justified?

3. Is it applied to the entire lot of assets? If not iu the selection

systematic?

4. Has it been ensured that the revaluation in financial

statements of a class of assets does not result in the net book value

of that class being greater than the recoverable amount of assets of

that class?5. Has it been ensured that in the case of upward revision, the

accumulated depreciation has not been credited to the P & L a/c?6. Has the revaluation surplus / loss been accounted as

prescribed in this standard?

7. In respect of sale/ disposal of revalued assets, has the credit

balance standing in respect of the disposed asset in the revaluation

reserve been adjusted or reversed?

F. Disclosure in Financial Statements

1. Has the following information been disclosed in the financial

statements?

a. Gross and net book value of fixed assets at the beginning and

end of an accounting period showing additions, disposals,

acquisitions and other movements;b. Expenditure incurred on account of fixed assets in the course

of construction or acquisition; and In respect of revalued assets

the revalued amount substituted for historical costs of fixed

assets, the methods adopted to compute the revalued amounts, the

nature of indices used, the year of any appraisal made, and whether

an external valuer was involved.

AS-11 : ACCOUNTING FOR THE EFFECTS OF CHANGES IN FOREIGN EXCHAN

Particulars

A. Applicability

1. Has it been ensured that this standard has been applied by the

enterprise as follows?


17/133

a. In accounting for transactions in foreign currencies; and

b. In translating the financial statements of foreign branches

for inclusion in the financial statements of the enterprise.

B. Translation of transaction in Foreign Currency

1. Has a transaction in a foreign currency been recorded in

the reporting currency by applying the exchange rate to thefollowing?

a. Transactions resulting in foreign exchange inflow / outflow - the

transaction is recorded at exchange rate prevalent on the date of the

transactionb. Transactions which result in foreign exchange inflow / outflow at

a later date - the transaction is translated as per enterprise policy

(usually average rate)

2. Are there any inter-related transactions?

a. Has a list of parties and group concerns been prepared?

b. Is there any contract or contracts with common parties?c. In particular, are there settlements to be made net or have been

made net of receivable and payable amounts? In such instances the

average exchange rate may be adopted.

3. Have the monetary items of assets and liabilities as at the

Balance sheet date been reported at the closing rate? (buying rate for

receivables and selling rate for payables)

4. Have the non-monetary items (excluding fixed assets) which

are earned at historical cost denominated in a foreign currency been

reported using the exchange rate us at the date of the transaction?

5. Have the non-monetary items (excluding fixed assets) which

are taken at NRV, been reported using the exchange rate as at the

date determination of NRV?

C. Recognition of Exchange Differences

1. Have the exchange differences arising on foreign currency

transactions been recognised as income or as expense in the period

in which they arise?

2. Foreign currency borrowings

a) In respect of foreign currency borrowings in relation to

acquisition of fixed assets, are there any payments or repayments

made durin the eriod?b) Are there any exchange differences arising there from?

c) Are they reflected in the 'Carrying Amount' and not debited

or credited to P & L a/c as exchange fluctuation?


18/133

d) If the net amount of fixed assets after adjusting the carrying

amount for exchange difference is negative, has the difference been

debited to Revaluation Reserve Account (RR) or if there is no

balance in the RR, the P&La/c?D. Forward Exchange Contracts

1. Is there a difference between the forward rate and theexchange rate at the date of transaction?

2. Is the difference in respect of liabilities incurred for acquiring

such a fixed asset been adjusted in the carrying amount of the

respective fixed asset?3. If no, has the difference been accounted as income or

expense in the P & L a/c?

E. Foreign Branches

1. Have the financial statements of a foreign branch been

translated using the procedures mentioned below

a) Revenue Items - At average rate, weighted rate if fluctuations are heavy

b) Opening / closing Inventory - At opening and closing rates

c) Depreciation - At the rates used for the translation of the values

of the assets on which depreciation is calculated.

d Monetar items - Closin rate.e) Non-Monetary items (other than fixed assets and

inventories) - Exchange rate at the date of the transaction.

f) Fixed Assets - Exchange rate at the date of the

transaction, any increase or decrease in the liability incurred for the

acquisition of fixed assets by applying the closing rate should beadded to or deducted from the historical cost of the asset.g) Head office account (Whether debit or credit) - To be reported

at the amount of the balance in the branch account in the books of

the head office after adjusting unreconciled transactions.h) Net Exchange Difference - Should 'be recognised as

income or expense of the period except in respect of (f) above

amount.i) Contingent Liabilities - At closing rate

F. Disclosure

1. Have the followin been disclosed?a. The amount of exchange differences included in the net profit

or loss for the period.

b. The amount of exchange difference adjusted in the carrying

amount of fixed assets during the accounting period: and


19/133

c. The amount of exchange differences in respect of forward

exchange contracts to be recognised in the profit or loss fo." one or

more subsequent accounting periods, as required by para D

above.

d. Recommended - Enterprise's Foreign Currency Risk,

Management Policy

AS 12 : ACCOUNTING FOR GOVERNMENT GRANTS

Particulars

A. Recognition

1. Has the enterprise received a grant or is it likely to receive a grant?

2. Is the enterprise in a position to comply with the conditionsattached to the Government Grant?

3. Has the grant been actually received?

4. If yes, has the receipt of such grant been recognised?

B. Accounting

1. Government Grant related to depreciable fixed assets

a. Alternative I

(i) Has the grant been received against a particular fixed asset?

(ii) Has the grant so received been shown as a deduction from the

gross value of fixed asset?

(iii) Does the deduction of the grant from fixed asset equal the whole

of such fixed asset? If so, has the asset been shown in the books at

nominal value after full deduction is made?

b. Alternative 2

(i) Has such grant against fixed assets been treated as deferred

income?

(ii) Has the deferred income been recognized in the P & La/c?

(iii) Has such deferred income been allocated to the P & L a/c on a

systematic and rational basis?

(iv) Have such allocations been made over the useful life of the

asset? (v) Have such allocations been made in the proportions in

which depreciation is charged?(vi) In respect of deferred income balance, has it been separately

shown in the Balance Sheet?

2. Have grants relating to non-depreciable fixed assets been

credited to capital reserve?

3. Government Grants related to Revenue


20/133

a. Has the enterprise received grants against any particular

expenditure to be incurred?

b. Have these grants been received to compensate against a

particular expenditure?

c. Have the grants so received been deducted from the particular

expenditure?d. Have the grants received been shown separately under other

Income?

4. Government grants received as promoters' contribution.

a. Have the grants been received as promoters' contribution?

b. Have such grants been credited to capital reserve?

c. Have such grants been treated as a part of shareholders fund?

5. Other Government Grants

(a) Has any Government grant been given in the form of a

non-monetary asset? Specify the asset.

( b). Has non-monetary asset been given at a concessionalrate, and accounted for on the basis of their acquisition

cost?

c. Has the non-monetacy asset been given free of cost? d. Is

documentary or other evidence available? e. Has the same been

recorded as compensation?f. Has such compensation been given for expenses or losses

incurred in the previous years?

g. Has such compensation been given for lending immediate

financial support to the enterprise? (h). Has such comoensation

receivable been credited to the P

& L a/c?i. Has such compensation, which has been credited, been disclosed

as an extraordinary item?

C. Contingencies

1. Has a grant become contingent after it has been recognised?

2. Has proper disclosure of this contingency been made in the


D. Refund

1. Have the grants become refundable? If yes, have the conditions

and circumstances been identified?

2. Have the grants, which are refundable, been accounted for as anextraordinary item?

3. Has the refunded grant been accounted as follows?

a. Grant relating to depreciable fixed assets - debit to asset or

unamortised deferred income and the balance to P & L a/c.

b. Grant relating to non-depreciable fixed asset or in the

nature of promoters contribution- debit to capital reserve c. Others -

charge to P & L a/c


21/133

4. Has depreciation been charged on revised value of fixed assets?

5. Has depreciation been provided pruspectively on such fixed

assets?

E. Disclosure

1. Have the following been disclosed"?a. The accounting policy adopted for Government grants, including

the methods of presentation in the financial statements;

b. The nature and extent of Government grants recognised in the

financial statements, including grants of non-monetary assets given at

a concessional rate or free of cost.

AS 13 : ACCOUNTING FOR INVESTMENTS

ParticularsA. Classification of Investments

1. Has the enterprise classified investments as current investments

and long term investment distinctly in its financial statements?

2. Has further classification of current and long-term investments as

specified by the statute governing the enterprise been done? In the

absence of statutory requirements, such further classification should

disclose, where applicable, investment in:a. Government or Trust securities;

b. Shares, debentures or bonds;

c. Investment properties;

d. Others - specifying nature.

3. Have investment properties been classified as long-term

investments?

B. Cost of Investments

1. Does the cost of an investment include acquisition charges such as

brokerage, fee and duties?

2. If an investment is acquired, or partly acquired by the issue of

shares or other securities, is the acquisition cost arrived at on the

basis of the fair value of the securities issued?

3. If an investment is acquired in exchange for another asset, has theacquisition cost of the investment been determined by reference to

the fair value of the asset given up? Alternatively, has the acquisition

cost of the investment been determined with reference to the fair

value of the investment acquired it if is more clearly evident?

C. Carrying Amount of Investments


22/133

1. Have the investments classified as current investments been

carried in the financial statements at the lower of cost or fair value

determined either on an individual investment basis or by category of

investment, but not on an overall or lobal basis?2. Have the long-term investments been carried in the financial

statements at cost? Has a provision fot diminution been made torecognise a decline, other than temporary, in the value of for each

investment individually?3. Have any reductions in the carrying amount and any reversals of

such reductions been charged or credited to the P & L a/c?

4. On disposal of an Investment, has (he difference between the

carrying amount and net disposal proceeds been-charged or credited

to the P & L a/c?5. Have the sale proceeds of 'rights' on shares purchased on cum-

rights basis been credited to the cost of investments?

D. Disclosure


statements?

a. The accounting policies for determination of carrying amount of

investments, and

b. Classification of investments as specified in A1 above;

c. The amounts included in P & L a/c for:

(i) Gross income by way of interest, dividends (showing separately

dividends from subsidiary companies), and rentals on investments

showing separately such income from long term and current

investments.

(ii) Profits and losses on disposal of current investments and changesin the carrying amount of such investments; and

(iii) Profits and losses on disposal of long term investments and

changes in the carrying amount of such investments;

d. Significant restrictions on the right of ownership, realisability of

investment or the remittance of income and proceeds of disposal;

e. The aggregate amount of quoted investments;

f. Other disclosures as specifically required by the relevant statute

governing the enterprise.

AS-14 : ACCOUNTING FOR AMALGAMATIONS

Particulars

A. Classification of Amalgamation

1. Has the scheme of amalgamation been tested for all the following

conditions?


23/133

a. All the assets and liabilities of the transferor Company become,

after amalgamation, the assets and liabilities of the transferee

Company.b. Shareholders holding not less than 90% of the face value of the

equity shares of the transferor Company (other than the equity shares

already held there in, immediately before the amalgamation, by thetransferee Company or its subsidiaries or their nominees) become

equity shareholders of the transferee Company by virtue of the

amal amation.c. The consideration for the amalgamation receivable by those equity

shareholders of the transferor Company who agree to become equity

shareholders of the transferee Company is discharged by the

transferee Company wholly by the issue of equity shares in the

transferee Company, except that cash may be paid in respect of any

fractional shares.d. The business of the transferor Company is intended to be carried

on, after the amalgamation, by the transferee Company.

e. No adjustment is intended to be made to the book values of the

assets and liabilities of the transferor Company except to ensure

uniformity of accounting policies.2. If the scheme of amalgamation does not fulfill any or all of the five

conditions, has the amalgamation been considered to be an

"amalgamation in the nature of purchase"?3. If the scheme fulfills all the five conditions, has the amalgamation

been considered an "amalgamation in the nature of merger"?

B. The Pooling of Interests Method1. Has the pooling of interest method been adopted for accounting of

amalgamation in the nature of merger?

2. In preparing the transferee Company's financial statements, have

the assets, liabilities and reserves (whether capital or revenue arising

on revaluation) of the transferor Company been recorded at their

existing carrying amounts and in the same form as at the date of the

amal amation?3. Has the balance of the P & L a/c of the transferor Company been

aggregated with the corresponding balance of the transferee

Company or transferred to the General Reserve, if any?4. If at the time of the amalgamation, the transferor and the

transferee companies have conflicting accounting policies, has a

uniform set of accounting policies been adopted following the

amalgamation?5. Has the difference between the consideration and the amount of

share capital of the transferor Company been adjusted in reserves?


24/133

C.The Purchase Method

1. Has the purchase method been adopted for accounting of

amalgamation in the nature of purchase?

2. In -preparing the transferee Company's financial statements, Have

the assets and liabilities of the transferor Company been incorporated

at their fair values at the date of amalgamation?3. Have only statutory reserves been included in the financial

statements of the transferee Company?

4. If there is a difference between total consideration and net assets,

taken over, has it been accounted as 'Goodwill / Capital Reserve'?

5. If the statutory requirement regarding a particular statutory- reserve

is yet to be complied, has the debit been given on 'Amalgamation

Adjustment Account? If yes has it been disclosed, under

"Miscellaneous Expenditure in the Balance Sheet?D. Others

1. In case the scheme provides for any payment in future and if the

payment is probable, has the amount been included in the

'consideration'? In other cases, where amounts are not determinable,

have they been recognised after being determinable?

2. Where the scheme of amalgamation sanctioned under a statute

prescribes the treatment to be given to the reserves of the transferor

Company after amalgamation, has the same been followed in lieu of

rescri tions in this standard?3. If the amalgamation has been approved before issuance of

financial statements of either Transferor or Transferee Company, hasdisclosure been made as per AS - 4?

E. Disclosure

1. Have the following been disclosed in respect of all amalgamations

during the year?

a. Names and general nature of business of the amalgamating

companies;

b. Effective date of amalgamation for accounting purposes;

c. The method of accounting used to reflect the amalgamation; and

d. Particulars of the scheme sanctioned under a statute.2. For amalgamations accounted for under the pooling of interests

method, have the following additional disclosures been made in the

first financial statements after amalgamation?a. Description and number of shares issued, together with the

percentage of each Company's equity shares exchanged to effect the

amal amation;


25/133

b. The amount of any difference between the consideration and the

value of net identifiable assets acquired, and the treatment there of.

3. For amalgamations accounted for under the purchase method,

have the following additional disclosures been made in the first

financial statements after amalgamation?a. Consideration for the amalgamation and a description of the

consideration paid or contingently payable; and -

b. The amount of any difference between the consideration and the

value of net identifiable assets acquired, and the treatment thereof

including the period of amortisation of any goodwill arising on

amal amation.4. If the reserves have been dealt with as per D 2 above has separate

disclosure been made?

AS-15 : ACCOUNTING FOR RETIREMENT BENEFITS IN THE FINANCIAL

STATEMENTS OF EMPLOYERS

A. Applicability

1. Has it been ensured that the standard 13 has been applied in

respect of those retirement benefits for which the employer's

obligation cannot be reasonably estimated, e.g. adhoc exgratia

payments made to employees on retirement.2.Does the enterprise have any benefit plan for its employees ? List

them as under and make brief note of feature a. Provident fund

b. Superannuation pension

c. Gratuity

d. Leave encashment benefit on retirement

e. Post - retirement health and welfare schemes

f. Other retirement benefits

3. Have the benefit plans been grouped as either Defined

Contribution Scheme or Defined Benefit Scheme?

B. Funding

1. Has a trust been created for making contributions in respect of

Defined Contribution Scheme?

2. Is there any shortfall or excess of contribution as compared to the

amount payable?

3. Has the shortfall been accounted for by means of a provision in

the P & L a/c ? Has the excess of contribution been treated as a pre-

payment in the Balance Sheet?


26/133

4. In case the liability for retirement benefits is funded through

creation of a trust,

a. Has the contribution been made on the basis of actuarial valuation?

b. Has the actuarial valuation been done at least once in three years,

if not done annually?c. Does the actuary's report specify the amount to be contributed

during the inter valuation period?

d. Is there any shortfall or excess of contribution as compared to the

amount payable?

e. Where the contribution paid during a year is lower than the amount

required to be contributed during the year to meet the accrued liability

as certified by the actuary, has the shortfall been charged to the P & L

a/c for the ear?f. Where the contribution paid during a year is in excess of the

amount required to be contributed during the year to meet the

accrued liability as certified by ihe actuary, has the excess been

treated as a pre-payment?5. In case the liability for retirement benefits is funded through a

scheme administered by an insurer,

a. Has the employer made an arrangement through an insurer for

payment of Defined Benefit Scheme? ,

b. Has appropriate accrue I of the liability been made by the

employer?

c. Has the actuarial certificate or confirmation been obtained from the

insurer?

d. Is there any shortfall or excess of contribution as compared to theamount payable?

e. Where the contribution paid during a year is lower than the amount

required to be contributed during the year to meet the accrued liability

as certified by the actuary or confirmed by the insurer, has the

shortfall been charged to the P & L a/c for the year?

f. Where the contribution paid during a year is in excess of the

amount required to be contributed during the year to meet the

accrued liability as certified by the actuary or confirmed by the insurer,

has the excess been treated as a pre-payment?C. Accounting Treatment

1. If the employer has chosen to make payment for retirement

benefits out of own funds, has an aporopriate charge to the P & L a/c

for the year been made through a provision for the accruing liability?


27/133

2. Has the accruing liability been calculated on the basis of actuarial

valuation or any other rational method? (e.g. method based on the

assumption that such benefits are payable to all employees at the end

of the accountin earD. Alterations

1. Is there any alteration of a retirement benefit scheme, or animprovement to an existing scheme?

2. Is there any change in actuarial valuation method or assumptions

adopted? If yes, have AS - 5 & AS - 1 been complied with?

3. If any additional benefit has arisen to employees, have the costs

been accounted for as specified above?

E. Disclosures 1. 'Have the following been disclosed?

a. Method of determining retirement cost for the period.

b. Actuarial valuation method used for determining retirement benefits

under the Defined Benefit Scheme.c. In case the costs related to gratuity and other defined benefit

schemes are based on an actuarial valuation, whether the actuarial

valuation was made at the end of the period or at an earlier date.

(disclose date)d. If any other method has been applied, has it been appropriately

described?

AS-16 : BORROWING COSTS

A. Capitalization

1. Has the enterprise incurred Borrowing Costs (BC) during the

period?

2. If yes, is the BC directly attributable to the acquisition, construction

or production of a Qualifying Asset (QA)?

3. Have the following been excluded from QA?

a. Inventories that are routinely manufactured

b. Inventories that are produced in large quantities on a repetitive

basis over a short period of time

c. Assets that are ready for their intended use or for sale whenacquired

4. If BC is not attributable to QA, has the BC been expensed?

5. If BC is attributable to QA, have the following conditions been

satisfied?

a. The QA will result in future economic benefits to the organization

b. The BC can be measured reliably.


28/133

c. Expenditure for the acquisition, construction or production of a QA

is being incurred.

d. BC is being incurred,

e. Activities that are necessary to prepare the QA for its intended use

or sale are in progress.

6. If the answer to the above conditions is yes, has BC beencapitalised?

B. Measurement

1. Has the enterprise borrowed funds specifically for the purpose of

obtaining a particular QA?

2. If yes, has the entire actual amount of specific BC from the date of

borrowing, reduced by the income on temporary investments, been

capitalised?3. If no, are the BC such that they are not readily identifiable with a

specific QA?

4. If yes, has the amount of BC to be capitalised been determined by

applying a capitalisation rate to the expenditure on that asset?

5. Has it been ensured that the amount of BC capitalised during the

period does not exceed the amount of BC incurred during the period?

C. Suspension of Capitalisation

1. Have the activities necessary to prepare an asset for its intended

use or sale been interrupted for extended periods?

2. Is the suspension avoidable or unavoidable?

3. If avoidable, has capitalisation of BC been suspended during that

period?

D. Cessation of Capitalisation1. Are substantially all the activities necessary to complete the QA for

its intended use or sale complete?

2. If yes, has capitalisation of BC ceased?

3. Is the QA such that it is completed in parts and a completed part is

capable of being used while construction continues for other parts?

4. If yes, have substantially all the activities necessary to prepare that

part of its intended sale or use been completed?

5. If yes, has capitalisation of BC ceased in relation to that part?

E. Disclosure1. Has disclosure been made of the following? a. Accounting policy

adopted for BC b. Amount of BC capitalised during the period.

AS-17 : SEGMENT REPORTING

Particulars


29/133

-1A. Segments

1. Have the business segments and geographical segments been identified on the

basis of best evidence of internal organisational and management structure and

system of internal reporting to Board of Directors and CEO?2. Are the business segments identified above based on the following factors?

a. The nature of the products or services

b. The nature of the production processes

c. The type or class of customers for the products or services

d. The methods used to distribute the products or provide the services

e. If applicable, the nature of the regulatory environment, for example, banking,

insurance, or public utilities.

3. Are the geographical segments identified above based on the following factors?

a. Similarity of economic and political conditions

b. Relationships between operations in different geographical areasc. Proximity of operations

d. Special risks associated with operations in a particular area

e. Exchange control regulations

f. The underlying currency risks.

4. Are the risks and returns of the enterprise affected predominantly by differences

in the products and services produced?

5. If yes, have business segments been chosen for primary reporting?

6. If yes, has secondary reporting been applied to geographical segments?

7. Alternatively, are the risks and returns of the enterprise affected predominantly

by operations in different countries or other geographical areas?

8. If yes, have geographical segments been chosen for primary reporting?9. If yes, has secondary reporting been applied to business segments?

10. Are the risks and returns of the enterprise affected both by differences in the

products and in the geographical areas in which it operates?

11. If yes, have business segments been chosen for primary reporting and

secondary reporting applied to geographical segments?

12. Is the Internal organisation and management structure of the enterprise and its

system of internal reporting to Board of Directors and CEO based neither on

industrial products or services nor on geographical areas?

13. If yes, has a choice been made of primary reporting segments based on

judgement?

B. Identification of Reportable Segments:

1. Have Reportable Segments bean identified as either business or geographical

segments based on the following tests?

a. 10% Revenue Test

b. 10% Result Test

c. 10% Asset Test

2. Has management chosen any segment, not fulf illing the 10% criteria, as a

reportable segment?


30/133

3. Does the external revenue attributable to the reportable segments identified

above constitute at least 75% or more of total external revenue?

4. If the answer to the above is no, have additional segments been identified for

reporting until the 75% threshold mark is reached even though the 10% criteria is not

fulfilled?

5. Have the business / geographical segments that are not reportable

segments been included as an unallocated reconciliation item?C. Comparability

1. Has it been ensured that a segment identified as a reportable segment based

on 10% criteria in the immediate preceding period continues as a reportable

segment for the current period even if it does not satisfy the 10% threshold in the

current period?

2. Has it been ensured that if a segment is identified as a reportable segment In

the current period, the preceding period segment data has been restated (unless

impracticable) to reflect the newly reportable segment?

D. Operating Definitions

1. Have the monetary values been derived in respect of the following items as

defined in the standard?

a. Segment revenue

b. Segment expenses

c. Segment result

d. Segment assets

e. Segment liabilities

2. Has the segment report been prepared by applying the segment

accounting policies which comprise the accounting policies adopted for preparing

and presenting the financial statements of the enterprise as well as those accounting

policies that relate specifically to segment reporting?E. Primary Reporting Format

1. Has the following information been provided in respect of every reportable

segment chosen for primary reporting"a. Segment revenue, classified into segment revenue from sales to external

customers and segment revenue from transactions with other segmentsb. Segment result

c. Total carrying amount of segment assets

d. Total amount of segment liabilities

e. Total cost incurred during the period to acquire segment assets that are

expected to be used during more than one period (tangible and intangible fixed

assets)

f. Total amount of depreciation included in the segment result in respect

of segment assets for the period; and

g. Total amount of significant non-cash expenses, other than depreciation and

amortisation in respect of segment assets, that was included in segment expense

and, therefore, deducted in measuring segment result.

2. Has a reconciliation between the information disclosed for reportable

segments and the aggregated financial information in the financial statements been

presented?F. Secondary Reporting Format

1. Has the following information been provided in respect of every reportable

segment chosen for secondary reporting?


31/133

a. Segment revenue

b. Total carrying amount of segment assets

c. Total cost incurred during the period to acquire segment assets that are

expected to be used in more than one period (Capital expenditure)

2. Have geographical segments been classified by the following criteria?

a. Location of assetsb. Location of customers

3. If yes, is primary format of geographical segments based on location of

customers?

4. If yes, has the following been disclosed in secondary reporting format?

a. Total carrying amount of segment assets by location of assets

b. Total cost incurred during the period to acquire segment assets that are

expected to be used in more than one period (Capital expenditure)

G. Consolidated Financial Statement (CFS)

1. If CFS is prepared, has segment report been prepared, at the minimum, on the

basis of CFS?

AS-18: Related Party Disclosures

Particulars

A. Applicability

1. Is the enterprise a Level 1 enterprise?

B. Related Party Relationships and Transactions

1. Has a list of Related Parties in each of the following

relationships been prepared?

a. Enterprises that directly, or indirectly through one or moreintermediaries, control, or are controlled by, or are under common

control with, the reporting enterprise (this includes holding companies,

subsidiaries and fellow subsidiariesb. Associates and joint ventures of the reporting enterprise and the

investing party or venturer in respect of which the reporting enterprise

is an associate or a oint venturec. Individuals owning, directly or indirectly, an interest in the voting

power of the reporting enterprise that gives them control or significant

influence over the enterprise, and relatives of any such individual

d. Key management personnel and relatives of such personnel; and

e. Enterprises over which any person described in (c) or (d) is able to

exercise significant influence. This includes enterprises owned by

directors or major shareholders of the reporting enterprise and

enterprises that have a member of key management in common with

the re ortin enter rise.


32/133

2. Have the related party transactions, which are a transfer of

resources or obligations between related parties, regardless of

whether or not a price is charged, been ascertained?

C. Disclosure

1. Does the element of "Control" exist in the related partyrelationships listed above?

2. If yes, have the following been disclosed, irrespective of whether or

not there have been transactions during the year?

a. Name of Related Party

b. Nature of Related Party relationship

3. Have there been transactions between related parties during

the existence of the RP relationship?

4. Have the following types of transactions been disclosed?

a. Purchases or sales of goods (finished or unfinished)

b. Purchases or sales of fixed assetsc. Rendering or receiving of services

d. Agency arrangements

e. Leasing or hire purchase arrangements

f. Transfer of research and development

g. License agreements

5. Have the following been disclosed in respect of every such

transaction?

a. The name of the transacting related party

b. A description of the relationship between the parties

c. A description of the nature of transactions

d. Volume of the transactions either as an amount or as an

appropriate proportion

e. Any other elements of the related party transactions necessary for

an understanding of the financial statements

f. The amounts or appropriate proportions of outstanding items

pertaining to related parties at the Balance Sheet date and provisions

for doubtful debts due from such parties at that dateg. Amounts written off or written back in the period in respect of debts

due from or to related parties.

Note :

a. Items of a similar nature may be disclosed in aggregate by type ofrelated party.

b. Exceptions to disclosure:

(i) No disclosure is required where providing such disclosures would

conflict with the Reporting Enterprises' duties of confidentiality as

specifically required in terms of a statute or by any regulator or similar

competent authority.


33/133

(ii) No disclosure is required in consolidated financial statements in

respect of intra-group transactions.

(iii) No disclosure is required in the financial statements of state-

controlled enterprises as regards related party relationships with other

state-controlled enterprises and transactions with such enterprises

AS-19 : ACCOUNTING FOR LEASES

Particulars

H. In the books of lessee

1. Finance lease

a. Has the lease been recognised as an asset and a liability immediately at the inception of

the lease at the lower of the fair value of the leased asset or the present value (PV) of the

minimum lease payments (MLP) from the standpoint of the lessee?

b. Has the initial direct cost if any been capitalised?

c. Have the lease payments been apportioned between the finance charge and reduction

of outstanding liability by allocating the finance charge to periods during the lease term so as

to produce a constant periodic rate of interest on the remaining balance of the liability for

each period?

d. Is the provision for depreciation made in the books of the lessee in consonance with the

depreciation on owned assets?

e. Where there is no reasonable certainty that the lessee will obtain ownership by the endof the lease term has the asset been fully depreciated over the lease term or its useful life

whichever is shorter?

f. Have the assets acquired under finance lease been segregated from

the assets owned?

g. Have contingent rents been recognized as expense in P & La/c?

h. Disclosure

(i) Has the net carrying amount for each class of assets been disclosed as at Balance

Sheet date?

(ii) Has a reconciliation between the total of MLP at the Balance Sheet date and their PVbeen made and disclosed properly?

(iii) Has the total of the MLPs at the Balance Sheet date and their PV been

disclosed in categories of(a) Less than One year

(b) Between one to five years

(c) Greater than five years

(iv) Has the total of future minimum sub-lease payments expected to be received undernon-cancelable subleases been disclosed?

(v) Has a genera! description of the lessee's significant leasing arrangement been

disclosed?

2. Operating lease

a. Are the lease payments recognised as expenses in the P & L a/c on a straight-iine basis

over the term of the lease unless another systematic basis is more representative of the time

pattern of the user's benefit?

b. Have the following disclosures made?


34/133

(i) The total of future MLP under non-cancelable operating leases for the

periods(a) Less than One year



(ii)

The total of future minimum payments expected to be received under non-cancelablesubleases.

(iii) Lease payments recognised in P & L a/c with separate amounts for MLPs and

contingent rent.

(iv) Sub-Lease payments receivable recognised in the P & L a/c for the period.

(v) A general description of the lessee's significant terms

I. In the books of lessor

1. Finance lease

In case of Non-manufacturer lessor

a. Has the Net investment in lease been accounted for as receivables at inception of

lease.

b. Has the finance income been recognised based on a pattern reflecting a constant

periodic rate of return on net investment outstanding in respect of finance lease?

c. Have the lease payments of the accounting period excluding cost of services been

reduced from both principal and unearned finance income?

d. Have the estimated unguaranteed residual values used in computing the lessor's gross

investment in a lease been reviewed regularly?

e. If there has been a reduction in the unguaranteed residual value, has the allocation over

the remaining lease period been reversed and the reduction in respect of amounts already

accrued recognised immediately?

f. Have initial direct costs been either expensed or immediately allocated

against the finance income over the term of the lease?

In case of Manufacturer lessor

g. Has the income stream been segregated on the following basis?

(i) Profit or loss resulting from an outright sate of asset being leased at normal selling

prices reflecting any applicable volume or trade discounts and finance income over the lease

term.

(ii) In a transaction of sale, is the selling profit recognized in accordance with

enterprise's policy for outright sale?

h. At the commencement of lease term has the lessor recorded the sale revenue atthe fair value of the asset?

i. However if PV of MLPs accruing to the lessor computed at the

commercial -rate of interest is lower than the fair value, is the amount recorded as

sales revenue equal to the PV?j. If artificially low rates of interest are quoted, is profit on sale restricted to that

amount which would apply if a commercial rate of interest were charged?

k. Is the initial direct cost recognised as an expense at the inception of the lease?l. Have the following been disclosed in the books of the lessor

(i) Reconciliation between the total gross investment inlease and the PV of the MLP

receivable at the Balance Sheet date.

(ii) The total gross investment in the tease and the PV of MLP receivable for each of the

following per categories (i.e)

(a) Less than one year


35/133



(iii) Unearned Finance Income

(iv) The unguaranteed residual values accruing to benefit of the lessor.

(v) The accumulated provision for uncollectible MLP receivable.

(vi) Contingent rent recognised

(vii) A general description of the significant leasing arrangements of the lessor.

(viii)Accounting Policy in resoect of initial direct costs.

(ix) Accounting Policy in respect of initial direct costs.

2. Operating Lease

a. Are the assets given under operating lease disclosed under fixed Assets?

b. Is the lease income recognised on SLM basis over the lease term unless anothersystematic basis is representative?

c. Has the depreciation been provided on the basis of life of the asset?

d. Have the initial direct costs been expensed when incurred or deferred and allocated toincome over the lease term in proportion to the recognition of rent income?

e. Have the following disclosures been made:

(i) The gross carrying amount, the accumulated depreciation and accumulated

impairment lost the Balance Sheet date for each class of assets.

(ii) The depreciation recognised in the P & L a/c for the period

(iii) The impairment loss recognised / reversed in the P & L a/c for the period.

(iv) The future MLP under non-cancelable operating lease in the aggregate and

for each of the following period categories

(a) Less than one year



(v) The total contingent rents recognized as income.

(vi) A general description of the lessor's significant leasing arrangements.

(vii)Accounting Policy adopted In respect of initial direct costs.

AS - 20: Earnings Per Share

Particulars

A. Basic Earnings per Share - BEPS

1. Has net profit or loss for the period been arrived at after deductingthe following?

a. Tax expense

b. Preference Dividend

(i) On non-cumulative preference shares - the preference dividend

provided for in respect of the period; and

(ii) On cumulative preference shares - the preference dividends for

the period whether ur not the dividends have been provided for.


36/133

2. Does the net profit or loss include the following?

a. Extraordinary items

b. Prior period items

3. If the enterprise has more than one class of equity shares, has net

profit or loss for the period been apportioned over different classes of

shares in accordance with their dividend rights?4. Has the Weighted Average Number of Equity Shares (WANES)

outstanding during the period been computed as the number of equity

shares outstanding at the beginning of the period, adjusted by the

number of equity shares bought back or issued during the period

multi lied b the time-wei htin factor?5. Have shares been included in WANES from the date the

consideration is receivable?

6. Have equity shares issued as part of consideration in

amalgamation in the nature of purchase been included in WANES as

of the date of acquisition?7. Have equity shares issued as part of consideration in

amalgamation in the nature of merger been included in WANES from

the be innin of re ortin eriod?8. Have partly paid equity shares been treated as a fraction of an

equity share to the extent they were entitled to participate in dividends

relative to a fully paid equity share?9. Have equity shares of different nominal values but same dividend

rights been converted into equivalent shares of same nominal value?

10. Have contingently issuable shares been included from the date

when all necessary conditions under the contract have beensatisfied?11. Has it been ensured that in computing WANES, events given

below, that have changed the number of equity shares outstanding

without a corresponding change in resources been adjusted?a. A bonus issue

b. A bonus element in any other issue, for example a bonus element

in a rights issue to existing shareholders

c. A share split; and d. A reverse share split (consolidation of shares).

12. Has the BEPS been computed by dividing the net prolit or loss for

the period attributable to equity shareholders by the WANES

outstanding during the period?

B. Diluted Earnings Per Share (DEPS)

1. Does the enterprise have any of the potential equity shares (PES)

listed below?

a. Debt instruments or preference shares, that are convertible into

equity shares;


37/133

b. Share warrants;

c. Options including employee stock option plans under which

employees of an enterprise are entitled to receive equity shares as

part of their remuneration and other similar plans; andd. Contingently issuable shares.

2. Have PES been treated as dilutive when and only when their conversion to equity shares would decrease net profit per share from

continuing ordinary operations?3. Has the effect of anti-dilutive PES been ignored?

4. Have PES been weighted for the period that they were

outstanding?

5. Has the net profit or loss for the period attributable to the equity

shareholders been adjusted in respect of the following pertaining to

PES after adjusting for tax expense?a. Dividends b. Interest

c. Any other changes in expenses or income

6. Have the number of equity shares been computed as the

aggregate of WANES considered for BEPS as also WANES which

would be issued on the conversion of all Dilutive PES into equity

shares?7. Have dilutive PES been deemed to have been converted into

equity shares at the beginning of the period or if issued later, the date

of the issue of the PES?8. Has the number of equity shares winch would be issued on the

conversion of dilutive PES, been determined from the terms of the

PES?

b. The issue of shares when the proceeds are used to repay debt or

preference shares outstanding at the Balance Sheet date

c. The cancellation of equity shares outstanding at the Balance Sheet

date

d. The conversion or exercise of PES, outstanding at the Balance

Sheet date, into equity shares

e. The issue of warrants, options or convertible securities

f. The satisfaction of conditions that would result in the issue of

contingently issuable shares.

4. If yes, has a description of such transactions been included in the


5. Has the entity opted for these recommendatory disclosures? E.

Disclosure


statements?


38/133

a. The amounts used as the numerators in calculating BEPS and

DEPS, and a reconciliation of those amounts to the net profit or loss

for the period.b. The WANES used as the denominator in calculating BEPS and

DEPS, and a reconciliation of these denominators to each other

c. The nominal value of shares along with the earnings per sharefigures

d. The fact that per share calculations reflect changes in the number

of shares as described in 'Restatement' above

e. Items and conditions of contracts generating PES which affect the

measurement of BEPS and DEPS

2. Has the following recommendatory disclosure been adopted by the

entity?

Other per share amounts for various components of net profits, which

may help the users to evaluate the performance of the enterprise.

E.g. profit from ordinary activities

AS-21 : CONSOLIDATED FINANCIAL STATEMENTS

Particulars

A .. Coverage

1. Has 9 list of entities over which the parent exercises control been

prepared?

2. Is the objective of the control of the entities to obtain economic

benefits from their activities?

3. Have Consolidated Financial Statements (CFS) been presentedincluding all the entities over which the enterprise exercises control?

4. If no, has it been ensured that the following conditions/situations do

not exist for such excluded subsiditirics?

a. Control is intended to be temporary because the subsidiary is

acquired and held exclusively with a view to its subsequent disposal in

the near future; orb. Subsidiary operates under severe long - term restrictions, which

significantly impair its ability to transfer funds to its parent.

B. Consolidation Procedures1. Have the following consolidation procedures been complied with?

a. Line by line addition of like items of assets; liabilities, income and

expenses


39/133

b. Identification and elimination of cost of investment of the enterprise

in each subsidiary and portion of equity of each subsidiary, at the date

on which investment in each subsidiary is made.

c. Recognition of difference of cost of investment over portion of

equity as goodwill or capital reserve in the CFS.d. Identification and adjustment of minority interest in the net

income of consolidated subsidiaries.

e. Identification and presentation of minority interest in the net

assets of consolidated subsidiaries, consisting of

(i) Amount of equity attributable to minorities at the date on which

investment is made

(ii) Minorities' share of movements in equity since the date the parent

subsidiary relationship came into existence

f. Elimination of intra group balances and intra group

transactions and resulting unrealised profits in full.g. Elimination of unrealised losses resulting from intra group

transactions (unless cost cannot be recovered)

h. Set off of goodwill and capital reserve arising on consolidation

of more than one subsidiary

2. Do losses applicable to the minority in a consolidated subsidiary

exceed the minority interest in equity of the subsidiary?

3. If yes, has such excess been adjusted against the controlling

auditee's interest except to the extent that minority has a binding

obli ation to make ood the losses?4. Does any subsidiary have outstanding cumulative preference

shares held outside the group?

5. If yes, has the share of profits/losses been computed after

adjusting for the subsidiaries preference dividend, whether or not

dividends have been declared?6. Is the carrying amount of the subsidiary in the books different from

its cost?

7. If yes, has the carrying amount been considered for the purpose of

the above computations?

8. Are financial statements of the subsidiary as on the date of

investment in the subsidiary available?

9. If no, is it practicable to draw the financial statements of thesubsidiary as on that date?

10. If no, have the financial statements of the subsidiary for the

immediately preceding period been use'"! as a basis for

consolidation?


40/133

11. If yes, have the effects of significant transactions; or other events

that occur between the date of such financial statements and the date

of investment in such subsidiaries been adjusted?12. Has the enterprise made two or more investments in the

subsidiary at different dates?

13. If yes, was the control eventually obtained?14. If yes, has CFS been presented only from the date on which

parent - subsidiary relationship came into existence?

15. Has the equity of the subsidiary as on the date of investment been

determined on a step-by-step basis?

16. Does the reporting date of any subsidiary vary with the Parent's

reporting date?

17. If yes, is it practicaolo to draw up the financial statements of such

subsidiaries to the Parent's reporting date?

18. If no, have financial statements drawn up to different reporting

dates been consolidated? Note : The difference should not be more

than six months.19. If yes, have the effects of significant transactions or other events

that occur between those dates and the date of the parent's financial

statements been adjusted?20. Have the CFS been prepared using uniform accounting policies

for like transactions and other events in similar circumstances?

21. Has the auditee disposed of the whole or any part of investment in

any subsidiary?

22. If yes, has the disposal resulted in the cessation 0)' parent-

subsidiary relationship?23. If yes, have the following been ensured?

a. Inclusion of results .of operations of the subsidiary until the date of

cessation of relationship

b. Recognition of profit or loss on disposal of investment in subsidiary

in the consolidated P & L a/c.

c. If the whole of the investment in the subsidiary has not been

disposed, is accounting for the remaining investment in accordance

with AS 13/ AS 23?24. Have other ASs (including AS 17 on Segment Reporting) en

applied in the preparation of CFS as they apply to sarate financial

statements?

C. Disclosure

1. Have the following been disclosed in the CFS?

a. A complete description of subsidiaries e.g. name, country of

incorporation or residence, proportion of ownership interest.

b. Where applicable:


41/133

(i) Relationship between parent and subsidiary, if the parent does not

own, directly or indirectly through subsidiaries, more than one-half of

the voting power of the subsidiary;(ii) The effect of the acquisition and disposal Jf subsidiaries on the

financial position at the reporting date, the results for the reporting

period and on the corresponding amounts for the preceding period;and(iii) The names of the subsidiary (ies) of which repo

Documents

10 Accounting Standards