Value Ind AS Limited - pwc

Value Ind AS Limited

Illustrative Ind AS consolidated

financial statements

March 2019

This publication presents an illustrative financial statements of a fictional listed company, Value Ind

AS Limited. It illustrates the financial reporting requirements that would apply to such a company

under Indian Accounting Standards (Ind AS) as issued at 31 December 2018. Supporting

commentary is also provided. For the purposes of this publication, Value Ind AS Limited is listed on a

fictive stock exchange and is the parent entity in this consolidated financial statements.

This publication is for illustrative purposes only and should be used in conjunction with the relevant

Ind AS and any other reporting pronouncements and legislation applicable in India.

PricewaterhouseCoopers Private Limited

This publication has been prepared for general guidance on matters of interest only, and does not constitute

professional advice. You should not act upon the information contained in this publication without obtaining specific

professional advice.

For your feedback and suggestions, write to us at: pwc.update@in.

? 2019 PricewaterhouseCoopers. All rights reserved. PwC refers to the PwC network and/or one or more of its

member firms, each of which is a separate legal entity. Please see structure for further details

Introduction

This publication presents illustrative consolidated financial statements of a fictitious listed company, Value Ind AS Limited.

The financial statements comply with Indian Accounting Standards (Ind AS) and Schedule III (Division II) of the Companies

Act, 2013 (Schedule III).

We have attempted to create a realistic set of financial statements for Value Ind AS Limited, a corporate entity that

manufactures goods, provides services and holds investment property. However, as this publication is a reference tool, we

have not removed any disclosures based on materiality. Instead, we have included illustrative disclosures for as many

common scenarios as possible. Please note that the amounts disclosed in this publication are purely for illustrative purposes

and may not be consistent throughout the publication.

New disclosure requirements and changes in accounting policies

Companies (Indian Accounting Standards) Amendment Rules, 2018 notified Ind AS 115, Revenue from Contracts with

Customers. The amendment rules are effective from reporting periods beginning on or after 1 April 2018. This publication

shows how the adoption of Ind AS 115 may affect a corporate entity. Note 43 provides example disclosures which explain the

impact of the change in accounting policies due to adoption of Ind AS 115. There are also many new disclosures illustrated

throughout the publication, in particular in note 6A, note 20, note 31, note 43 and Appendix A. You can find new or revised

disclosures by looking for shading in the reference column.

In compiling the illustrative disclosures, we have made a number of assumptions in relation to the adoption of Ind AS 115. In

particular, Ind AS 115 is adopted by Value Ind AS Limited retrospectively without using the practical expedient for completed

contracts and contract modifications. For further specific assumptions made, please refer to the commentary to note 43.

Under Ind AS 115, an entity has an option to adopt Ind AS 115 by applying modified retrospective method. Appendix A

illustrates the key changes to the group¡¯s financial statements had the group elected to apply Ind AS 115 using the modified

retrospective method.

The other amendments to Ind AS notified by the Companies (Indian Accounting Standards) Amendment Rules, 2018 and

Companies (Indian Accounting Standards) Second Amendment Rules, 2018 that apply from 1 April 2018 and that are

unrelated to the adoption of Ind AS 115 are primarily clarifications, see Appendix D. We have assumed that none of them

required a change in Value Ind AS Limited¡¯s accounting policies. However, this assumption will not necessarily apply to all

entities. Where there has been a change in policy that has a material impact on the reported amounts, this would also need to

be disclosed in note 43.

The Ministry of Corporate Affairs amended Schedule III on 11 October 2018 notifying certain additional presentation and

disclosure requirements such as presentation of trade-payables (current/non-current both) on face of the balance sheet as (a)

total outstanding dues of micro and small enterprises; and (b) total outstanding dues other than micro and small enterprises.

Using this publication

The source for each disclosure requirement is given in the reference column. There is also commentary that (i) explains some

of the more challenging areas, (ii) lists disclosures that have not been included because they are not relevant to Value Ind AS

Limited and (iii) provides additional disclosure examples.

Appendix B gives further information about industry-specific disclosures. It also includes disclosures relating to correction of

an error relating to prior year. A list of abbreviations used in this publication is presented in Appendix E.

The example disclosures are not the only acceptable form of presenting financial statements. Alternative presentations may

be acceptable if they comply with the specific disclosure requirements prescribed in Ind AS and Schedule III.

Some of the disclosures in this publication would likely be immaterial if Value Ind AS Limited was a ¡®real life¡¯ company. The

purpose of this publication is to provide a broad selection of illustrative disclosures which cover most common scenarios

encountered in practice. The underlying story of the company only provides the framework for these disclosures and the

amounts disclosed are for illustration purposes only. Disclosures should not be included where they are not relevant or not

material in specific circumstances.

Preparers of financial reports should also consider local legal and regulatory requirements which may stipulate additional

disclosures that are not illustrated in this publication.

Format

The structure used in this publication is not meant to be used as a template, but to provide you with possible ideas. It will not

necessarily be suitable for all companies. The structure of financial reports should reflect the particular circumstances of the

company and the likely priorities of its report readers. There is no ¡°one size fits all¡± approach and companies should engage

with their investors and users to determine what would be most relevant to them. Companies may use an alternative

structure for presenting the notes to the financial statements.

Industry-specific requirements

VALUE Ind AS Limited does not illustrate the disclosures specifically relevant to specialised industries. However,

Appendix B provides an illustration and explanation of the industry-specific disclosure requirements of Ind AS 106,

Exploration for and Evaluation of Mineral Resources and Ind AS 41, Agriculture.

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Value Ind AS Limited

Illustrative Ind AS consolidated financial statements - March 2019

Financial statements

Balance sheet

Statement of profit and loss

Statement of changes in equity

Statement of cash flows

Notes to the financial statements

1.

2.

Summary of significant accounting policies

Critical estimates and judgements

Notes to the balance sheet

3.

4.

5.

6.

6A.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

Property, plant and equipment

Investment properties

Intangible assets

Financial assets

(a) Investments

(b) Trade receivables

(c) Loans

(d) Cash and cash equivalents

(e) Other financial assets

Contract assets and contract liabilities

Deferred tax assets

Other non-current assets

Inventories

Other current assets

Assets classified as held for sale

Equity share capital and other equity

(a) Equity share capital

(b) Reserves and surplus

(c) Other reserves

Financial liabilities

(a) Borrowings

(b) Other financial liabilities

(c) Trade payables

Provisions

Employee benefit obligations

Deferred tax liabilities

Current tax liabilities

Government grants

Other current liabilities

Notes to the statement of profit and loss

20. Revenue from operations

21. (a) Other income

(b) Other gains/(losses)

22. (a) Cost of materials consumed

(b) Changes in inventories of work-in-progress, stock-in-trade and finished goods

23. Employee benefit expense

24. Depreciation and amortisation expense

25. Other expenses

26. Finance costs

27. Income tax expense

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13

20

23

28

46

47

49

50

53

54

55

55

56

56

57

58

58

58

58

59

60

61

64

67

67

67

69

78

79

79

79

86

88

88

89

89

89

90

90

91

93

3

Financial instruments and risk management

28. Fair value measurements

29. Financial risk management

30. Capital management

97

103

122

Group information, acquisitions and disposals

31.

32.

33.

34.

35.

Segment information

Business combination

Discontinued operation

Interests in other entities

Related party transactions

125

130

133

135

141

XX

Unrecognised items

36. Contingent liabilities and contingent assets

37. Commitments

38. Events occurring after the reporting period

146

147

149

XX

Other information

39.

40.

41.

42.

43.

44.

Share-based payments

Earnings per share

Offsetting financial assets and liabilities

Assets pledged as security

Changes in accounting policies

Additional information required by Schedule III

151

153

155

157

158

163

Appendices

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