Wednesday 27 May 2015

Simple Comparison of IND AS with Tax accounting Standard


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Topic
ICD (Tax acing Std)
Indian GAAP
New IND AS
Mark to market loss
Shall not be recognized.
Allowed to be recognized.
No specific directions but based on prudent test, allowed.
Prior period loss
Not covered
Separate disclosure
Re-statement of profit of earlier period.
Construction contract Inventory
Out of scope of inventory
Included in inventory
Included in inventory
Inventory – deferred settlement
Not covered
Not covered
Credit terms to be recognized as interest expenses.
Inventory cost formula
FIFO or weighted average
No specific
No specific
Inventory – reversal of write down of inventory
Not covered
Not covered
Allowed.
Inventory in case of dissolution
Valued at NRV
Not covered
Not covered
Definition of revenue
Same as Indian GAAP
Gross inflow of cash
Increase in economic benefit.
Contract revenue
Percentage completion method only
Both percentage completion and completed service method applicable
Entity satisfies a performance obligation.
Contract incidental income
Reduce the contract cost accordingly
Other income
Not covered
Non cash considerations
Not covered
Not covered
Measured at fair value.
Estimated cost of dismantling of PPE
Not covered
Not covered
Included in cost.
PPE Revaluation
Not covered
Not covered
Allowed.
PPE Depreciation
Under income tax act.
Follow sch II of Co. Act.
Each components requires to depreciate separately.
PPE – Compensation for impairment
Not covered
Not covered
To be considered in P&L.
PPE – residual value
Not covered
Not covered
Required to be reviewed at end of each year.
PPE – reassessment of useful life
Not covered
Not covered
Required.
PPE- method of depreciation
Not covered
Straight line or WDV
Number of options.
PPE – Change in method of depreciation
Not covered
Retrospective re-computation
Considered as change in accounting estimate
PPE – sale of assets
Not covered
Not covered
To be considered in P&L.
PPE – changes in decommission
Not covered`
Not covered
Requires to be adjust in capital cost.
 
Topic
ICD (Tax acing Std)
Indian GAAP
New IND AS
Forex – MTM
Recognized only at settlement
MTM allowed
MTM allowed
GG – discounted loan
Not covered`
Not covered`
Required to be accounted separately.
Scope of  Security
Only stock in trade
Stock –out of scope
Broader definition.
Valuation of security
At cost
At cost
At fair value
Borrowing cost
Similar to Indian GAAP
Simple terms.
Concept of effective interest method
PCCA – Discounting
No discounting for future
No discounting for future
discounting for future
Contingent assets
Require to recognize
Not  Require to recognize
Not  Require to recognize
PCCA measurement
Best estimate
No guidelines
No guidelines

 

 

*PPE means Property, plant and equipment.

**GG – Government Grant 

***PCCA – Provision, Contingent liabilities and Contingent assets.  

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