08/06/2013
Applicability of Pronouncements/Legislative Amendments/Circulars etc
for November, 2013
–
Intermediate (IPC)
Examination
Paper 1: Accounting
A.
Pronouncements
Accounting Standards
1, 2, 3, 6, 7, 9, 10, 13 and 14 are covered in the syllabus.
(Text of al
l applicable Accounting Standards are available in the Appendix
I of
Volume I of
‘
Accounting
’
Study Material
revised in
November, 2012
)
B.
Announcement relevant for November, 2013 examination
Criteria for Classification of Entities and Applicability of
Accounting Standards
Due to recent changes in the enhancement of tax audit limit, the Council of the ICAI has
recently decided to change the 1st criteria i.e. determination of SME on turnover basis for
Level II entities from Rs. 40 lakhs to Rs. 1 Crore wi
th effect from the accounting year
commencing on or after April 01, 2012.
Paper 5: Advanced Accounting
A.
Pronouncements
Accounting Standards
4, 5, 11, 12, 16, 19, 20
,
26 and 29 are covered in the syllabus.
(Text of all applicable Accounting Standards a
re available in the Appendix
II of
Volume I
of
‘
Advanced Accounting
’
Study Material
revised in
November, 2012
)
B.
Notification
/Announcement
relevant for
November,
2013 examination
1
Presentation of Foreign Currency Monetary Item Translation Difference
Account
(FCMITDA)
In the Revised Schedule VI format, no line item has been specified for the presentation of
“Foreign Currency Monetary Item Translation Difference Account (FCMITDA)”.
Therefore, the Council of the Institute at its 324th meeting held on M
arch 24
-
26, 2013 at
New Delhi, decided that debit or credit balance in FCMITDA should be shown on the
“Equity and Liabilities” side of the balance sheet under the head ‘Reserves and Surplus’
as a separate line item.
2
Criteria for Classification of Entit
ies and Applicability of Accounting Standards
Due to recent changes in the enhancement of tax audit limit, the Council of the ICAI has
recently decided to change the 1st criteria i.e. determination of SME on turnover basis for
Level II entities from Rs. 40
lakhs to Rs. 1 Crore with effect from the accounting year
commencing on or after April 01, 2012.
3
Clarification on Debenture Redemption Reserve (DRR)
Ministry of Corporate Affairs vide Circular no. 04/2013 dated 11 February, 2013 has
clarified the adequ
acy of DRR for various institutions/companies
as follows:
All India Financial Institutions (AIFIs) regulated by Reserve Bank of India
and
Banking
Companies for both public as well as privately placed
debentures
Nil
Other Financial Institutions and NBFCs r
egistered with the RBI under
Section 45
-
IA of the RBI (Amendment) Act, 1997
if debentures issued through public issue
25%
if privately placed debentures
Nil
Other companies including manufacturing and
infrastructure
companies
(including
listed
and
un
listed
companies)
25%
Every company required to create/maintain DRR shall before the 30th day of April of
each year, deposit or invest, as the case may be, a sum which shall not be less than
fifteen percent of the amount of its debentures maturing during
the year ending on the
31st day of March next following
year.
4.
Maintenance of Cash Reserve Ratio at 4.00 per cent
for all banks vide circular DBOD.
No. Ret. BC. 76/12.01.001/2012
-
13 dated January 29, 2013.
5.
Statutory Liquidity Ratio for Local Area Ba
nks be reduced from 25 per cent to 23
per cent of their Net Demand and Time Liabilities
(NDTL) with effect from the fortnight
beginning August 11, 2012.
6
Review of the Prudential Guidelines on
Restructuring of Advances by
Banks/Financial Institutions
Res
erve Bank of India has
review
ed
the prudential guidelines on restructuring of
advances by banks/ financial institutions
vide
circular no.
DBOD.No.BP.BC.63/21.04.048/2012
-
13 applicable for all scheduled commercial
banks excludi
ng RRBs dated November 26, 201
2 and has decided:
i)
To enhance the provisioning requirement for restructured accounts classified as
standard advances from the existing 2.00 per cent to 2.75 per cent in the first two
years from the date of restructuring. In cases of moratorium on paymen
t of
interest/principal after restructuring, such advances will attract a provision of 2.75
per cent for the period covering moratorium and two years thereafter; and that
ii)
Restructured accounts classified as non
-
performing advances, when upgraded to
sta
ndard category will attract a provision of 2.75 per cent in the first year from the
date of upgradation instead of the existing 2.00
per cent.
In accordance with the above, loans to projects under implementation, when restructured
due to change in the date
of commencement of commercial operations (DCCO) beyond
the original DCCO as envisaged at the time of financial closure and classified as
standard advances
would attract high
er provisioning at 2.75 per cent as against the
present requirement of 2.00 per ce
nt as per the details given below:
Infrastructure projects
Particulars
Provisioning
Requirement
If the revised DCCO is within two years from the
original DCCO prescribed at the time of financial
closure
0.40 per cent
If the DCCO is extended beyond two y
ears and upto four
years or three years from the original DCCO, as the case
may be, depending upon the reasons for such delay
(Ref.: DBOD.No.BP.BC.85 /21.04.048/2009
-
10 dated
March 31, 2010)
2.75 per cent
–
From the date of
such restructuring till the revi
sed
DCCO or 2 years from the date of
restructuring, whichever is later.
Non
-
infrastructure projects
Particulars
Provisioning
Requirement
If the revised DCCO is within six months from the original
DCCO prescribed at the time of financial closure
0.40 pe
r cent
If the DCCO is extended beyond six months and upto one
year from the original DCCO prescribed at the time of financial
closure (Ref.:
DBOD.No.BP.BC.85 /21.04.048/2009
-
10 dated
March 31, 2010)
2.75 per cent
–
From the
date of such restructuring
for
2 years.
All other extant guidelines on Income Recognition, Asset Classification and Provisioning
pertaining to advances will remain unchanged.
Note
:
(Common for
Intermediate (
IPC
)
Paper 1 and Paper 5)
Non
-
Applicability of Ind ASs for
November
, 2013
E
xami
nation
The MCA has hosted on its website 35 converged Indian Accounting Standards (Ind AS)
without announcing the applicability date. These are the standards which are being
converged by eliminating the differences of the Indian Accounting Standards vis
-
à
-
vis IFRS.
(Students may note that Ind ASs are not applicable in November, 2013 Examination.
However, Accounting Standards as specified in the syllabus are applicable for them in
November, 2013 examination.)
Paper 4: Taxation
Applicability of Finance Ac
t, Assessment Year etc. for November, 2013
examination
(1)
The amendments made by the
Finance Act, 2012
in income
-
tax and service tax;
(2)
The provisions of income
-
tax law as applicable for the
assessment year 2013
-
14
;
(3)
The significant
notif
ications and circulars issued upto 30th April, 2013
(income
-
tax and service tax)
(The Study Materials relevant for May, 2013 and November, 2013 examinations are updated
based on the provisions of law as amended by the Finance Act, 2012 and significant cir
culars
and notifications issued up to 30.6.2012.
The amendments made by the Finance Act, 2012 in
income
-
tax and service
-
tax and notifications and circulars issued between 1.5.2011 and
30.4.2012 in income
-
tax are also separately discussed in the publication
“Supplementary
Study Paper
-
2012”.
)
Paper 6: Auditing and Assurance
I.
Standards on Auditing (SAs)
S.No
SA
Title of Standard on Auditing
Effective Date
1
SA 200
Overall Objectives of the Independent Auditor and the
Conduct of an Audit in Accordance with
Standards on
Auditing
April 1, 2010
2
SA 210
Agreeing the Terms of Audit Engagements
April 1, 2010
3
SA 220
Quality Control for Audit of Financial Statements
April 1, 2010
4
SA 230
Audit Documentation
April 1, 2009
5
SA 240
The Auditor’s responsibil
ities Relating to Fraud in an
Audit of Financial Statements
April 1, 2009
6
SA 250
Consideration of Laws and Regulations in An Audit of
Financial Statements
April 1, 2009
7
SA 260
Communication with Those Charged with Governance
April 1, 2009
8
SA 26
5
Communicating Deficiencies in Internal Control to Those
Charged with Governance and Management
April 1, 2010
9
SA 299
Responsibility of Joint Auditors
April 1, 1996
10
SA 300
Planning an Audit of Financial Statements
April 1, 2008
11
SA 315
Identify
ing and Assessing the Risks of Material
Misstatement through Understanding the Entity and its
Environment
April 1, 2008
12
SA 320
Materiality in Planning and Performing an Audit
April 1, 2010
13
SA 330
The Auditor’s Responses to Assessed Risks
April
1, 2008
14
SA 402
Audit Considerations Relating to an Entity Using a
Service Organization
April 1, 2010
15
SA 450
Evaluation of Misstatements Identified during the Audits
April 1, 2010
16
SA 500
Audit Evidence
April 1, 2009
17
SA 501
Audit Evidence
-
Specific Considerations for Selected
Items
April 1, 2010
18
SA 505
External Confirmations
April 1, 2010
19
SA 510
Initial Audit Engagements
-
Opening Balances
April 1, 2010
20
SA 520
Analytical Procedures
April 1, 2010
21
SA 530
Audit Sampling
April
1, 2009
22
SA 540
Auditing Accounting Estimates, Including Fair Value
Accounting Estimates, and Related Disclosures
April 1, 2009
23
SA 550
Related Parties
April 1, 2010
24
SA 560
Subsequent Events
April 1, 2009
25
SA 570
Going Concern
April 1, 200
9
26
SA 580
Written Representations
April 1, 2009
27
SA 600
Using the Work of Another Auditor
April 1, 2002
28
SA 610
Using the Work of Internal Auditors
April 1, 2010
29
SA 620
Using the Work of an Auditor’s Expert
April1, 2010
30
SA 700
Forming an
Opinion and Reporting on Financial
Statements
April 1, 2012
31
SA 705
Modifications to the Opinion in the Independent Auditor’s
Report
April 1, 2012
32
SA 706
Emphasis of Matter Paragraphs and Other Matter
Paragraphs in the Independent Auditor’s Report
April 1, 2012
33
SA 710
Comparative Information
–
Corresponding Figures and
Comparative Financial Statements
April 1, 2011
34
SA 720
The Auditor’s Responsibility in Relation to Other
Information in Documents Containing Audited Financial
Statements
Apri
l 1, 2010
II.
Statements
