Transaction costs do not include debt premiums or discounts, financing costs or internal administrative or holding costs. Where the sale value is in excess of the NBV, banks can reverse excess provision only when cash is received (by way of initial consideration and/or redemption of Security Receipts (SRs)/ Pass Through Certificates (PTCs). Fair value at reclassification date becomes the carrying amount. After three years unquoted shares / bonds / units transferred to AFS and valued as below: Units – Valuation will be done at NAV shown by the VCF in its financial statements. Interest received will be taken to profit or loss for the year amounting to $0.25m. Debt instruments qualifying as Tier II Capital (a) Stated maturity – minimum period of 5 years and no step-ups and other incentives to redeem, (b) All instances of non-payment of coupons to be notified to the Reserve Bank (c) No put option but Call option only after minimum period 5 years (d) Mandatory stated coupon – fixed or market determined but no credit sensitive feature (e) Loss Absorption: i) such instruments, at the option of the RBI, will be either written off or converted into common equity upon occurrence of the trigger event, called the Point of Non-Viability (PONV). Presentation of Financial Statements and Disclosure. 30/06. In terms of RBI guidelines, in India, all categories of loans (with a few exceptions) should be priced with reference to the Base Rate. 5. It would also involve significant supervisory challenges in running two different supervisory systems, especially off-site surveillance systems, in parallel. The issue here is that the historical behaviour data is currently limited and as such whether it is possible for all the banks to estimate such losses in accordance with the provisions of the standard. In case latest balance sheet is not available, the shares are to be valued at Re. The Working Group came to the conclusion that status quo may continue and banks may be guided by the requirements of the relevant accounting standards in the matter. Whether investment portfolio held to comply with LCR qualifies the business model test for classification under Amortized Cost Category? However, Ind AS 21 states that if the exchange rates fluctuate significantly, the use of the average rate for a period is inappropriate. A set of segments imposed by an external body such as a regulator may be inconsistent with the provisions of the standard.RBI may consider withdrawing its instructions specifying the segments and disclosure formats and banks may follow the requirements of Ind AS 108 for segment reporting. To be valued applying the YTM method by marking it up by 25 basis points above the yields of the Central Govt. All legal expenses and reimbursement of expenses incurred in connection with legal services are to be included here. Prior RBI approval for applying Ind AS 109 impairment requirements. 7.5.3 In respect of the statement of financial position, as per paragraph 60 of IAS 1, entities are required to present current and non-current assets, and current and non-current liabilities as separate classification, except when a presentation based on liquidity provides information that is reliable and more relevant, in which case an entity shall present assets and liabilities in order of liquidity. Rebutting the presumption in each individual case may be time consuming. For instance, if an advance is secured by tangible assets to the extent of 75 per cent, the secured component would be reflected under secured advance while the balance 25 per cent unsecured component would be included in this head. Financial Assets . The Working Group discussed the issue as to whether financial instruments which have the best credit rating (say AAA or AA), and where the stability of ratings is high (say more than 95 per cent), can be considered to have low credit risk. Any previously recognised gains, losses or interest cannot be restated. Unquoted MF units are to be valued on the basis of latest repurchase price declared by MF in respect of each scheme. IND AS 109 does not specify the basis of accounting to be followed between trade date and settlement date accounting except for trading liabilities and derivatives which are required to be accounted for on a trade date basis. Also, for the more senior and junior tranches, it may be obvious, with relatively little analysis, whether the tranche is less or more risky than the underlying assets. The nominal rate of interest received will be lower than for an equivalent financial asset without conversion rights to reflect the right of choice the bondholder will make at some later date. There have been no significant changes to accounting for financial liabilities. There will be inconsistency with initial measurement of liability which includes credit risk element. The IASB has segregated the overall hedge accounting broadly into two components i.e. This may give some indicative guidance for banks while not violating the spirit of the standard. the foreign branch of an Indian bank). This may give some indicative guidance for banks while not violating the spirit of the standard. Sale of assets from Amortised Cost category. (ii) If classified to be measured at amortised cost The difference between the fair value and the contractual amount repayable at maturity … Fair value at the reclassification date becomes its new gross carrying amount. Unquoted securities not qualifying for SLR purposes where valuation is based on YTM with mark up/ credit spreads. In addition, accounting for impairment of financial assets has become less complex. Under the relevant provisions of the Banking Regulation Act, 1949, the RBI is required to approve schemes for voluntary merger of banks. But, the regulatory prescriptions do not explicitly specify the ‘proportion say 10%, 20%, 50%,etc’ of the portfolio to be periodically monetized. Paragraph 8 of Ind AS 21 defines ‘closing rate’ as the spot exchange rate at the end of the reporting period. Cumulative gain or loss on OCI is reclassified to profit or loss at reclassification date. Thus, eligible transaction costs may be included at initial recognition of financial asset held in amortised cost/ FVOCI category, rather than being expensed. Consequently, the RBI Working Group submitted an interim report in November 2012 based on IFRS 9 as finalised up to July 2012 and it was decided to monitor further developments on the matter before proceeding with the implementation of Ind AS. Based on the above, in cases where an entity does not have a subsidiary but investments in associates and/ or joint ventures it is required to prepare financial statements where the associate and/ or joint venture are accounted for using the equity method. If it is not practicable to do so, that fact should be disclosed together with the proportions of the items in the consolidated financial statements to which the different accounting policies have been applied. Certain requirements of the RBI guidelines are more conservative than the derecognition requirements under Ind As. 81 /21.04.018/2006-07 dated April 18, 2007, circular reference DBOD.No.BP.BC.82/21.04.018/2003-04 dated April 30, 2004, circular DBOD.No.BP.BC.89/21.04.018/2002-03 dated March 29, 2003, circular BP.BC.77/21.04.018/2013-14 dated December 20, 2013, RBI circular DBOD.No.BP.BC.88/21.02.067/2004-05 dated May 4, 2005, DBOD.No.BP.BC.86/21.04.157/2006-07 dated April 20, 2007, RBI circular DBOD.No.BP.BC.87/21.04.048/2010-11 dated April 21, 2011, DBOD.No.BP.BC.60/21.04.048/2005-06 dated February 1, 2006, DBOD.No.BP.BC-103/21.04.177/2011-12 dated May 7, 2012, DBOD.No.BP.BC.84/21.04.018/2007-08 dated May 21, 2008, Cash in hand and balances with Reserve Bank of India, Balances with other banks, Financial Institutions and money at call and short notice, Contingent liabilities, commitments and guarantees, (Amount pertaining to previous year given in parenthesis below), Balance as at April 1, _____ (beginning of the previous year), Changes in accounting policy/prior period errors, Restated balance at the beginning of the reporting period, Dividend paid including dividend distribution tax, Other Additions/ Deductions during the year (to be specified), Profit (loss) for the year after income tax, Other Comprehensive Income for the year before income tax, Balance as at March 31, ____ (end of previous year), Balance as at March 31, ____ (end of the current year), Impairment losses on financial instruments, Depreciation and impairment of property, plant and equipment, Amortisation and impairment of intangible assets, Net profit/(loss) before taxes and exceptional items, Net profit/(loss) after tax from continuing operations, Profit/(loss) from discontinued operations, net of tax, Total Comprehensive Income for the period, Earnings per equity share (for continuing operations), Earnings per equity share (for discontinued operations), Earnings per equity share (for continuing and discontinued operations), Cash in hand (including foreign currency notes), * Restrictions, if any, on utilisation of balances should be disclosed, (a) Deposits in lieu of shortfall in priority sector lending targets, Forward Rate Agreements and Interest Rate Swaps. 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