The brand new Accounting Commonplace (Ind AS 117), which might be relevant from April 1, 2024, would considerably converge with the IFRS 17, which is now being adopted by over 140 international locations since January 1, 2023. The most recent MCA transfer will carry Indian accounting requirements nearer to world requirements, consultants stated.
- Additionally learn: MCA mandates digital mode for all adjudication proceedings of penalties
MCA has notified Ind AS 117 based mostly on the suggestions of the Nationwide Monetary Reporting Authority (NFRA), which is the nation’s sole unbiased audit regulator.
The most recent Ind AS 117 has changed the presently notified Ind AS 104, insurance coverage contracts.
Roadmap for implementation
Commenting on the newest MCA transfer, Avinash Chander, former Technical Director, Institute of Chartered Accountants of India (ICAI) stated, “Whereas the Authorities has notified Ind AS 117, Insurance coverage Contracts, efficient April 1, 2024, nonetheless it is not going to be utilized by insurance coverage firms in India as a result of the Indian Accounting Requirements aren’t relevant to such firms pending issuance of street map by IRDAI. Now that this normal has been notified, all eyes are on IRDAI, to quickly problem a roadmap for implementation of Indian Accounting Requirements for such firms.”
Amarjit Chopra, former President of ICAI stated “With Ind AS 117 now notified by MCA, it’s fascinating that IRDAI ought to mandate the implementation of Ind AS within the numerous insurance coverage firms”.
He highlighted that neither IRDAI nor RBI has to date mandated Ind AS adoption for his or her regulated entities beneath them. “On the most, the notified Ind AS 117 may have some influence as regards accounting of monetary ensures which can be in nature of insurance coverage contracts”, Chopra famous.
ICAI had additionally undertaken intensive public session by issuing publicity drafts of the proposed Ind AS 117 in 2018, 2021 and 2022.
IFRS 17, initially issued by the Worldwide Accounting Requirements Board (IASB), in Could 2017, is a whole overhaul of the accounting for the insurance coverage business.
It’s thought-about as a primary actually worldwide IFRS normal for insurance coverage contracts to assist buyers and different customers to higher perceive insurers’ threat publicity, profitability and monetary place. Globally, it has develop into efficient from January 1, 2023.
IFRS 17 is particularly designed to seize the distinctive options of the insurance coverage and funding contracts of the insurance coverage entities. It’s extremely insurance coverage merchandise particular and would entail a paradigm shift within the measurement, presentation and disclosure necessities. Insurance coverage business fulfils a major position within the world financial system.
Worldwide Accounting Requirements Board (IASB’s) factsheet of 2017 says with $13 trillion in property, insurers account for 12 per cent of the overall property of listed firms that use IFRS requirements.Given the central financial position of the business, correct and clear accounting for insurance coverage contracts is of essential significance, stated consultants.
#MCA #notifies #accounting #normal #Ind #insurance coverage #contracts