Issue no. 91 | February 2024

Issue no. 91 | February 2024

Monthly publication that covers emerging accounting and financial reporting topics and regulatory updates relevant for companies in India.

The statement of cash flows is a primary component of an entity’s financial statements. Ind AS 7, Statement of Cash Flows prescribes certain disclosure requirements for an effective review of operating, investing, and financing activities of a company. As per the principle of Ind AS 7, cash flows are classified as either operating, financing or investing activities depending on their nature. But identifying the appropriate activity category for many types of cash flow transactions can be complex. Regulators have also provided observation relating to discrepancies in application of certain requirements. This edition of Accounting and Auditing Update (AAU) discusses some of the key areas that regulators have highlighted and provided improvement points relating to statement of cash flows. The article also discusses illustrative disclosures with the help of examples.

The publication also carries an article on accounting treatment of other income earned from Externally Aided Project (EAP). The accounting of interest income is governed by principles of Ind AS 109, Financial Instruments, Ind AS 107, Financial InstrumentsDisclosures and Ind AS 1, Presentation of Financial StatementsHowever, where an entity temporarily invests funds borrowed for the construction of specific assets, treatment of such interest income to be evaluated considering the principles of Ind AS 23, Borrowing Cost. The Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) in its recent opinion deliberated on the accounting and presentation of the interest income earned on funds received by a company from the government authorities for a specific project temporarily invested by the company in bank deposits. Our article on this topic aims to discuss some of the key factors considered by the EAC while clarifying the accounting for interest income on funds invested that were received as borrowings for specific projects.

As is the case each month, we have also included a regular round-up of some recent regulatory updates in India and internationally.

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.

 Accounting and Auditing Update February 2024

Issue no. 91 | February 2024

Accounting and Auditing Update February 2024

 Key accounting and financial reporting issues-statement of cash flows

Chapter 1

Key accounting and financial reporting issues-statement of cash flows.

 Accounting Treatment of other income earned from Externally Aided Project (EAP)

Chapter 2

Accounting Treatment of other income earned from Externally Aided Project (EAP).

Regulatory updates

Chapter 3

Regulatory updates.