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Corporate Laws Central Ministry of Finance Companies Act, 2013

Companies (Indian Accounting Standards) Second Amendment Rules, 2024

09-Sep-2024 | G.S.R. 554(E)

MCA has issued the Companies (Indian Accounting Standards) Second Amendment Rules, 2024, effective from 9th September 2024.

The key highlights include:

1. Ind AS 116 - Lease Liability in Sale and Leaseback:
a. A new paragraph 102A is added, specifying that from the commencement date, a seller-lessee must apply paragraphs 29-35 for the right-of-use asset and paragraphs 36-46 for the lease liability arising from a sale and leaseback transaction.
b. The seller-lessee should ensure that no gain or loss related to the right-of-use asset retained is recognized unless there is a partial or full termination of the lease.

2. Appendix C Modifications:
a. A new paragraph C1D is introduced, clarifying that amendments related to lease liabilities in sale and leaseback transactions are applicable from 1 April 2024.
b. Paragraph C20E is added to ensure retrospective application of the lease liability rules to sale and leaseback transactions occurring after the initial application of Ind AS 116.

3. Illustrative Examples:
Appendix D now includes illustrative examples to demonstrate the application of the sale and leaseback provisions, especially for transactions involving fixed payments and those with variable lease payments not dependent on an index or rate.

Kindly refer to the document for more information.

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