Development of accounting estimates involves use of judgements and/or assumptions based on the latest available, reliable information. As judgements or estimates can significantly impact a company’s financial statements, it is vital to disclose the significant accounting judgements and sources of estimation uncertainty for a better understanding of assumptions made and the extent to which changes to those assumptions may affect a company’s future financial position. Ind AS 1, Presentation of Financial Statements, prescribes requirements for disclosure of judgements that management has made in the process of applying an entity’s accounting policies, and assumptions it makes about the future and other major sources of estimation uncertainty. This edition of Accounting and Auditing Update (AAU) contains an article on key areas that regulators have highlighted and have provided improvement points relating to judgements and estimates with the help of illustrative examples and case study.
The activities in the manufacturing and production sectors are key drivers for economic growth. However, the activities in these sectors are leading to issues such as environment pollution and climate change. As a result, regulatory authorities across the globe are implementing climate and environment related regulations to protect and conserve the environment and ensure sustainable use of natural resources. The climate and environment related risks, corresponding regulatory requirements and strategic decisions undertaken by the entities may also have an impact on the business model of an organisation. The regulators are also mandating disclosure requirements with respect to climate and environment related risks and activities. In India, there are a number of climate and environment related regulations that companies would need to comply with. This publication carries an article on this topic which aims to provide an overview of the key climate and environment-related regulatory requirements in India for the companies in the manufacturing sector.
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 AAU.
For more information on this update, please write to aaupdate@kpmg.com.
