The question of when to recognise or derecognise a trade receivable or payable seems relatively simple on the surface. However, it has generated a significant amount of debate because there is diversity in practice for both the receivable and payable sides of the transaction. Considering this, the International Accounting Standards Board (IASB) amended financial instrument standards in the area of measurement setting out the guidance for measurement principles for derecognition of financial instruments. The amendments are effective for annual periods beginning on or after 1 January 2026, with early application permitted. This edition of Accounting and Auditing Update (AAU) discusses the guidance provided by IASB regarding recognition and derecognition for both financial asset (receivable) and financial liability (payable).
The publication also carries an article on offer document, which summarises some of the recent key circulars issued by SEBI with regard to the offer documents. A public offer is a process that enables companies to raise funds for multiple purposes. An offer document (in whatever name it is referred) plays an eminent role in the public offer process. The offer document introduces a company, its operations, financial health, risks, opportunities and its offer of securities to a potential investor. Information in the offer document would influence potential investor’s investment decision process. Considering the importance of offer document, the Securities and Exchange Board of India (SEBI) closely reviews offer documents. With a view to enhance the appositeness of the offer documents to the investors, SEBI has issued various circulars or directions under SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2018, (ICDR Regulations) to companies and to lead managers prescribing certain matters.
As is the case each month, we have also included a regular round-up of some recent regulatory updates.
We would be delighted to receive feedback/suggestions from you on the topics we should cover in the forthcoming editions of the AAU.
For more information on this update, please write to aaupdate@kpmg.com.
