In this edition of the Accounting and Auditing Update (AAU), we conclude our two-part series on standard-setting initiatives by the International Accounting Standards Board (IASB) focussing on several key projects currently under development. These projects provide an early view of the future direction of global financial reporting. An article on this topic discusses, among other developments, proposals relating to expansion of fair value option under International Accounting Standard (IAS) 28, Investments in associates and joint ventures; the financial instruments with characteristics of equity (FICE) amendments to IAS 32, Financial Instruments: Presentation; amendments to IAS 37, Provisions, contingent liabilities and contingent assets, enhanced disclosure requirements for business combinations, among other initiatives. Collectively, these projects seek to enhance transparency, comparability and decision usefulness while addressing areas that have historically required significant judgement. For management and audit committee members, early assessment of these proposals will be important to anticipate implementation challenges and evaluate the potential impact on accounting policies, systems, controls and stakeholders’ communication.
This edition of the AAU also examines the practical application of Indian Accounting Standard (Ind AS) 23, Borrowing Costs. While the underlying principle of capitalising borrowing costs attributable to qualifying assets is well established, its application often requires considerable judgement in practice. Through a series of practical illustrations, the chapter explores matters such as identifying qualifying assets, accounting for group financing structures, foreign currency borrowings, phased project completions, among others. As businesses increasingly deploy complex treasury structures and large-scale capital projects, these issues remain highly relevant to organisations seeking to deliver consistent, high-quality financial reporting while navigating evolving financing and investment arrangements.
Finally, this edition of the AAU provides an overview of recent regulatory developments across the financial reporting and governance landscape. Key updates from the Reserve Bank of India (RBI) include liberalisation of foreign portfolio investment rules, revised identification criteria for Upper Layer of Non-banking Finance Companies, and amendments to Responsible Business Conduct Directions among others. The Securities and Exchange Board of India (SEBI) in its board meeting held in June 2026 approved the reintroduction of open-market buy-back of securities, intraday borrowings by mutual funds, mechanism for faster launch of Private Placement Memorandums by Alternate Investment Funds. The chapter also covers updates from Ministry of Corporate Affairs, updates to the Employees’ Provident Fund Scheme and other schemes under the new Code on Social Security, 2020, and updates with respect to format of financial results issued by insurance companies under Ind AS. Other key updates from the regulators during the month are also covered in this edition. Together, these developments reinforce the continued focus of regulators and standard setters on strengthening market integrity, investor protection, transparency and high-quality reporting.
We would be delighted to receive feedback or 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.
