Listed company involved in real estate activities was a land owner since many years of large land in suburban area of Mumbai. This land was shown at historical cost in company’s financials as per current accounting standard of India whereas the fair value of land was much more. Due to this, financials could not reflect the strong fair valuation of the land and company was unable to explain this point to bankers while applying for loan.
Company was required to follow IND AS (IFRS converged Accounting standards for India) as a part of phase wise applicability of Ind AS Implementation in India. As a part of Implementation project, APMH converged the last 2 year’s financials of the company as per IND AS & as per IND AS 101, fair value as deemed cost of the land was elected as first time adoption option. This boosted the net worth of the company as difference between cost & fair value of land was transferred to other equity as a fair value adjustment on first time adoption as per IND AS 101.
By following IND AS, company could reflect the true picture of financials to the investors, bankers & other authorities. This helped the company in raising funds by showing more real picture of financial statements.
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The article is in relation to the recent amendment in the tax audit report i.e Form 3CD vide Notification 33/ 2018 dated 20 July 2018. The said Notification inter alia requires the Assessee to report the breakup of expenditure into GST and non GST transactions.
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