The Ministry of Corporate affairs has notified the new Indian Accounting Standard (Ind AS) 116 Leases on March 30, 2019. As per the notification, this new Ind AS 116 – Leases is applicable on companies from April 01, 2019 (financial year 2019-2020).
Even though it is applicable from the financial year 2019-20 still it will affect the statements for the financial year ended March 31, 2019.
As per para 30 of Ind AS 8 Accounting Policies, changes in accounting estimates and errors, when an entity has not applied a new Ind AS that has been issued but is not yet effective, the entity is required to make the following disclosures in its financial statements.
- This fact; and
- known or reasonably estimable information relevant to assessing the possible impact that application of the new Ind AS will have on the entity’s financial statements in the period of initial application.
Further as per Ind AS 8, para 31, in complying with para 30 (which is stated above), an entity considers disclosing:
- the title of the new Ind AS;
- the nature of the impending change or changes in accounting policy;
- the date by which application of the Ind AS is required;
- the date as it which it plans to apply the Ind AS initially and
- discussion of the impact that initial application of the Ind AS is expected to have on the entity’s financial statements; or
- if that impact is not known or reasonably estimable, a statement to that effect.
Therefore, the management should take cognisance of para 30 & 31 of Ind AS 8 and evaluate the possible impact of Ind AS 116 with known or reasonable estimable information on the financial statements for the year ended March 31, 2019.
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official notification, refer the below link: