ARTICLES
Lease Accounting
Lease Accounting Software – Data Input Process
Creation of Company
Super Admin is the administrative contact from RVSBELL Analytics, who will create the company and the user login ids for all the users of the application.
Creation of users
Three users are created by …
Lease Accounting Software Computation Process
Generate cash flows
Based on the start date, effective date, end date, frequency of the lease, payable at beginning or end etc, cash flows for the entire period is generated as follows:
Change the following data – only …
Lease Accounting Software – Deposit Management
Upload Lease Deposit
Deposits with sample data
Import ‘Lease advance’ file
Click the import data and upload the advance.csv in the given format
Deposits uploaded
Compute the Lease Deposit
Prepare the schedule of dates first.
1. Discount factor is based on the …
Lease Accounting Software Modification and Termination
1. Processing is done on a quarterly basis.
2. Journal entries are passed on a monthly basis always. All entries will be dated the end of each month. Exception is the payment of lease rental and …
Hedge Accounting
What is meant by Hedging
Requirements for hedging
Hedging is a mechanism to either minimise the loss or to protect unrealised profits, if any. Maximising the profit is not an objective of hedging. Hedging is a risk management tool. There has to …
Discontinuation of hedge accounting
Only prospective discontinuation
Discontinuation of hedge accounting applies prospectively from the date on which the qualifying criteria are no longer met.
An entity shall not de-designate and thereby discontinue a hedging relationship that:
still meets the risk management objective on …
Equity derivatives and interest rate derivatives
Equity derivatives
The important difference between futures contract and options contract is that in the case of a futures contract, the risk-reward is symmetric, whereas in an options contract, the risk reward is asymmetric. In other …
Hedge Accounting as per indas109 / IFRS 9
It may be useful to understand the genesis of hedge accounting as to how the process itself matured over the last two decades. Even though this may not be relevant in the context …
Hedging instruments and hedged items
Hedging instrument
A hedging instrument should normally have one or more of the following characteristic features
It should help minimise risk.It should protect the profit still unrealised by locking the same.It should not have the effect of realising …
Qualifying criteria for hedge accounting
Three criteria for hedge accounting
A hedging relationship qualifies for hedge accounting only if all of the following criteria are met:
Eligible instruments only
The hedging relationship consists only of eligible hedging instruments and eligible hedged items.
Formal designation and …
Publications
Foreword by Shri T N Manoharan
Mr R. Venkata Subramani, known for his expertise in the field of Financial Instruments accounting, has come up with a new series of books on Financial Instruments as per Ind AS, incorporating all the relevant aspects …
Message / Review from CA P. R. Ramesh
Financial Instruments is by far the most complex and difficult subject in the field of accounting. The varied nature of such instruments with a wide range of derivatives and associated risk makes the …
Accounting for Investments – Volume 2
Preface to Volume 2
Accounting for Investments – Fixed Income Securities & Interest Rate Derivatives is the second volume of the Accounting for Investments series. This volume covers the financial instruments of fixed income securities and interest …
Accounting for Investments – Volume 1
Accounting for Investments Volume 1 attempts to give an exhaustive treatment of various accounting entries that should be recorded by any entity holding any financial instrument. Over the past two decades there have been several …
Financial Instruments Book Series as per Ind AS 109 (indas109)
Preface to the Book
Financial instruments are probably the most complex topic in the entire literature of accounting standards. Accounting for financial instruments in the Indian context was earlier covered by AS …
Message from Shri Yagnesh Mohanlal Desai
I have gone through the manuscript of Book – 1 viz., ‘Financial Instruments – An Introduction as per Ind AS 109’ in the series ‘Financial Instruments as per Ind AS’.
CA R Venkata Subramani (Venkat), has …
Introduction by Shri M P Vijayakumar
Almost all business transactions culminate in financial instruments in some form. In the present era of money, money and money, we witness an increasing trend of businesses being done through contractual arrangements which are structured …
Expected Credit Loss
How is the expected credit loss measured
ECL measurement criteria
An entity shall measure expected credit losses of a financial instrument in a way that reflects:
an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;the time value of money; …
Approaches for assessing credit risk
Drivers of expected credit loss
The Standard explains that an entity may apply various approaches to determine whether the credit risk on a financial instrument has increased significantly since initial recognition or when measuring expected credit losses. …
Simplified Approach for ECL for trade receivables
Trade receivables, contract assets & lease receivables
An entity shall always measure the loss allowance at an amount equal to lifetime expected credit losses for:
(a) trade receivables or contract assets that result from transactions that …
What is meant by significant increase in credit risk
Significant increase in credit risk (SICR)
At each reporting date an entity shall assess whether the credit risk on a financial instrument is increased significantly since initial recognition. The entity is required to …
What is the new Expected Credit Loss Model
What is the new ECL Model?
Ind AS 109 is the converged version of IFRS 9, as it stood as of 24 July, 2014 when the revised IFRS 9 was announced by the International …
Ind AS 109 / IFRS 9
Accounting treatment for FVOCI Instruments
Is there any difference between the accounting treatment for equity instruments and debt instruments classified as Fair Value Through Other Comprehensive Income (FVOCI)? The answer is ‘yes’. Frequently participants in my class ask me the underlying …
Effective interest Rate
Effective interest rate – definition
The rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the …
Modification of contractual cash flows
Modification due to renegotiation
When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not result in the de-recognition of that financial asset, an entity shall recalculate …
Equity derivatives and interest rate derivatives
Equity derivatives
The important difference between futures contract and options contract is that in the case of a futures contract, the risk-reward is symmetric, whereas in an options contract, the risk reward is asymmetric. In other …
Hedge Accounting as per indas109 / IFRS 9
It may be useful to understand the genesis of hedge accounting as to how the process itself matured over the last two decades. Even though this may not be relevant in the context …
Accounting for Investments – Volume 1
Accounting for Investments Volume 1 attempts to give an exhaustive treatment of various accounting entries that should be recorded by any entity holding any financial instrument. Over the past two decades there have been several …
Debt instrument measured at FVOCI
For financial assets that are debt instruments measured at FVOCI, both the amortised cost and the fair value of the instrument are relevant. The reason for this is the objective of categorising a debt instrument as …
Financial Instruments Book Series as per Ind AS 109 (indas109)
Preface to the Book
Financial instruments are probably the most complex topic in the entire literature of accounting standards. Accounting for financial instruments in the Indian context was earlier covered by AS …
Ind AS 102 / IFRS 2
Main Features of Ind AS 102
Share based payment transactions
Indian Accounting Standard Ind AS 102 deals with Share based payment trans-actions. This is one of the standards announced by MCA
IFRS 2 is the corresponding Accounting Standard issued by International Ac-counting Standards …
Fair Value of Loans
Debt instrument measured at FVOCI
For financial assets that are debt instruments measured at FVOCI, both the amortised cost and the fair value of the instrument are relevant. The reason for this is the objective of categorising a debt instrument as …
Miscellaneous items – Ind AS 21
Intra-group transactions
While following the normal consolidation process, intra-group balances and intra-group transactions of a subsidiary are eliminated, thereby incorporating the results and the financial position of the foreign operation with that of the reporting entity.
However, …
Editorial Team
CA Sanjay Sisodia
A senior Chartered Accountant professional with broad knowledge of fund accounting, financial business principles of asset management, hedge fund industry including role performed by service providers in middle & back office, fund administration, reconciliation, custodians, prime brokers, broking, …
Sumit Dhadda
Chartered accountant, member since 2003 & secured gold medal in CA Inter exams (AIR 25th), Diploma in Information System Audit & Risk Management, Certified Anti Money Laundering Specialist, Certified Concurrent Auditor
Registered Valuer from Insolvency & Bankruptcy Board of India …
Yagnesh Mohanlal Desai
Professional Accountant practicing since August 1983
Actively participated in the process of formulation of IFRS in India
Advising and implementing Indian Accounting Standards (Ind AS)
Imparting training in the field of Accounting and Auditing Standards
Helping big corporates select and implement accounting …
CA Sunitha Suri
Sunitha is a Chartered Accountant with over 10 years’ experience in international taxation
She is also a Cost and Management Accountant (India) and Cost Management Accountant (UK)
She has co-authored the chapter ’Dispute Resolution’ in the book ‘Transfer Pricing Law and Practice …
CA Viral Shah
He is a fellow Member of ICAI, also holds bachelor’s and Master’s in Commerce from Gujarat University, AhmedabadHe holds a USA CPA license from Arizona State Board of AccountancyHe also has successfully passed the certified course of Ind …
Dr. Anand Banka
Dr. Anand Banka is a Fellow Chartered Accountant with PhD in Finance, an Author of 6 best-selling books and a celebrated faculty for courses on International Financial Reporting Standards (IFRS). He started young and always had zeal for …
Dr. K. Sriram
Sriram is a Consulting Actuary engaged in Employee Benefits Consulting Practice since 2007
He is also an Actuarial Consultant- Trainer to some of the leading analytics firms in the area of actuarial analytics
Sriram has over two decades of experience …
Mohan R. Lavi
He has over 25 years of experience in industry across a variety of industries, qualified as Chartered Accountant in 1989
Mohan is the author of books on US GAAP, IFRS and the Sarbanes Oxley Act
He writes frequently on IFRS …
Arunachalam Rajaraman
He is a Consulting Actuary and Cost & Management Accountant from Chennai with about 25+ years of work and consulting experience.
His experience is spread across Consulting, Technology, Investments, Pensions, Life Insurance and General Insurance.
He had earlier been elected and served as the …