the Companies (Indian AccountingStandards) Amendment Rules, 2019

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 30th March, 2019

G.S.R………. (E).— In exercise of the powers conferred by section 133 read with section 469 of the
Companies Act, 2013 (18 of 2013), the Central Government, in consultation with the National
Financial Reporting Authority, hereby makes the following rules further to amend the Companies
(Indian Accounting Standards) Rules, 2015, namely:—
1. Short title and commencement.-(1) These rules may be called the Companies (Indian Accounting
Standards) Amendment Rules, 2019.
(2) They shall come into force on 1st day of April, 2019.
2. In the Companies (Indian Accounting Standards) Rules, 2015 (hereinafter referred to as the
principal rules), in the “Annexure”, under the heading “B. Indian Accounting Standards (Ind AS)”,-
I. in “Indian Accounting Standard (Ind AS) 101”, –
(i) for paragraph 30, the following paragraph shall be substituted, namely:-
“30 If an entity uses fair value in its opening Ind AS Balance Sheet as deemed cost for an
item of property, plant and equipment, an intangible asset or a right-of-use asset (see
paragraphs D5 and D7), the entity’s first Ind AS financial statements shall disclose, for
each line item in the opening Ind AS Balance Sheet:
(a)the aggregate of those fair values; and
(b)the aggregate adjustment to the carrying amounts reported under previous GAAP.”;
(ii)for paragraph 39AB, the following paragraph shall be substituted, namely:-
“39AB Ind AS 116, Leases, amended paragraphs 30, C4, D1, D7, D8B, D9 and D9AA,
deleted paragraph D9A and added paragraphs D9B–D9E. An entity shall apply those
amendments when it applies Ind AS 116.”
(iii) in Appendix C, in paragraph C4, for item (f), the following item shall be substituted,
namely:-
“(f) If an asset acquired, or liability assumed, in a past business combination was not
recognised in accordance with previous GAAP, it does not have a deemed cost of
zero in the opening Ind AS Balance Sheet. Instead, the acquirer shall recognise and
measure it in its consolidated Balance Sheet on the basis that Ind ASs would require
in the Balance Sheet of the acquiree. To illustrate: if the acquirer had not, in
accordance with its previous GAAP, capitalised leases acquired in a past business
combination in which acquiree was a lessee, it shall capitalise those leases in its
consolidated financial statements, as Ind AS 116, Leases, would require the acquiree
to do in its Ind AS Balance Sheet. Similarly, if the acquirer had not, in accordance
with its previous GAAP, recognised a contingent liability that still exists at the date
of transition to Ind ASs, the acquirer shall recognise that contingent liability at that
date unless Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets,
would prohibit its recognition in the financial statements of the acquiree. Conversely,
if an asset or liability was subsumed in goodwill/capital reserve in accordance with
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previous GAAP but would have been recognised separately under Ind AS 103, that
asset or liability remains in goodwill/capital reserve unless Ind ASs would require its
recognition in the financial statements of the acquiree. ”;
(iv) In Appendix D,
(a)in paragraph D1, for item (d), the following item shall be substituted, namely:-
“(d) leases (paragraphs D9, D9AA and D9B-D9E);”
(b) in paragraphs D7, after item (a), the following item shall be inserted, namely:-
“ (aa) right-of-use assets (Ind AS 116, Leases); and”;
(c)for paragraph D8B, the following paragraph shall be substituted, namely:-
“D8B Some entities hold items of property, plant and equipment, right-of-use assets
or intangible assets that are used, or were previously used, in operations subject to
rate regulation. The carrying amount of such items might include amounts that
were determined under previous GAAP but do not qualify for capitalisation in
accordance with Ind ASs. If this is the case, a first-time adopter may elect to use
the previous GAAP carrying amount of such an item at the date of transition to Ind
ASs as deemed cost. If an entity applies this exemption to an item, it need not
apply it to all items. At the date of transition to Ind ASs, an entity shall test for
impairment in accordance with Ind AS 36 each item for which this exemption is
used. For the purposes of this paragraph, operations are subject to rate regulation if
they are governed by a framework for establishing the prices that can be charged
to customers for goods or services and that framework is subject to oversight
and/or approval by a rate regulator (as defined in Ind AS 114, Regulatory Deferral
Accounts).”;
(d)for paragraph D9, the following paragraph shall be substituted, namely:-
“D9 A first-time adopter may assess whether a contract existing at the date of
transition to Ind ASs contains a lease by applying paragraphs 9-11 of Ind AS 116
to those contracts on the basis of facts and circumstances existing at that date.”;
(e)paragraph D9A shall be omitted;
(f) for paragraph D9AA, the following paragraph shall be substituted, namely:-
“D9AA When a lease includes both land and building elements, a first time adopter
lessor may assess the classification of each element as finance or an operating
lease at the date of transition to Ind ASs on the basis of the facts and
circumstances existing as at that date.”;
(g)after paragraph D9AA, the following paragraph shall be inserted, namely:-
“D9B When a first-time adopter that is a lessee recognises lease liabilities and
right-of-use assets, it may apply the following approach to all of its leases (subject
to the practical expedients described in paragraph D9D):-
(a) measure a lease liability at the date of transition to Ind AS. A lessee following
this approach shall measure that lease liability at the present value of the
remaining lease payments (see paragraph D9E), discounted using the lessee’s
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incremental borrowing rate (see paragraph D9E) at the date of transition to Ind
AS.;
(b) measure a right-of-use asset at the date of transition to Ind AS. The lessee
shall choose, on a lease-by-lease basis, to measure that right-of-use asset at
either:-
(i) its carrying amount as if Ind AS 116 had been applied since the
commencement date of the lease (see paragraph D9E), but discounted
using the lessee’s incremental borrowing rate at the date of transition to
Ind AS; or
(ii) an amount equal to the lease liability, adjusted by the amount of any
prepaid or accrued lease payments relating to that lease recognised in the
Balance Sheet immediately before the date of transition to Ind AS.
(c) apply Ind AS 36 to right-of-use assets at the date of transition to Ind AS.
D9C Omitted*
D9D A first-time adopter that is a lessee may do one or more of the following at
the date of transition to Ind AS, applied on a lease-by-lease basis:
(a)apply a single discount rate to a portfolio of leases with reasonably similar
characteristics (for example, a similar remaining lease term for a similar
class of underlying asset in a similar economic environment).
(b)elect not to apply the requirements in paragraph D9B to leases for which the
lease term (see paragraph D9E) ends within 12 months of the date of
transition to Ind AS. Instead, the entity shall account for (including
disclosure of information about) these leases as if they were short-term
leases accounted for in accordance with paragraph 6 of Ind AS 116.
(c)elect not to apply the requirements in paragraph D9B to leases for which the
underlying asset is of low value (as described in paragraphs B3-B8 of Ind
AS 116). Instead, the entity shall account for (including disclosure of
information about) these leases in accordance with paragraph 6 of Ind AS
116.
(d)exclude initial direct costs (see paragraph D9E) from the measurement of the
right-of-use asset at the date of transition to Ind AS.
(e)use hindsight, such as in determining the lease term if the contract contains
options to extend or terminate the lease.
D9E Lease payments, lessee, lessee’s incremental borrowing rate, commencement
date of the lease, initial direct costs and lease term are defined terms in Ind AS
116 and are used in this Standard with the same meaning.”;
(v) In Appendix 1,
(a)for paragraph 12, the following paragraph shall be substituted, namely:-
“12. Following paragraph numbers appear as ‘deleted’ in IFRS 1. In order to maintain
consistency with paragraph numbers of IFRS 1, the paragraph numbers are
retained in Ind AS 101:
(i) Paragraph 19
(ii) Paragraph D1(e)
(iii)Paragraph D1(o)

* Refer Appendix 1
4
(iv) Paragraphs D9A and D9C
(v)Paragraphs D10-11
(vi) Paragraph D24
(vii)Paragraph D31”;
(b)for paragraphs 13 and 14, the following paragraphs shall be substituted, namely:-
“13. IAS 40, Investment Property permits both cost model and fair value model (except
in some situations) for measurement of investment properties after initial
recognition. Ind AS 40, Investment Property, permits only the cost model. As a
consequence, paragraph 30 is amended and paragraphs D7(a) and D9C are
deleted.”
14. Paragraphs 34-39W and 39Y-39AA have not been included in Ind AS 101 as
these paragraphs relate to effective date and are not relevant in Indian context.
However, in order to maintain consistency with paragraph numbers of IFRS 1,
these paragraph numbers are retained in Ind AS 101.”;
II. in “Indian Accounting Standard (Ind AS) 103”, –
(i) for paragraph 14, the following paragraph shall be substituted, namely:-
“14. Paragraphs B31–B40 provide guidance on recognising intangible assets. Paragraphs
22–28B specify the types of identifiable assets and liabilities that include items for
which this Ind AS provides limited exceptions to the recognition principle and
conditions.”;
(ii)in paragraph 17 for item (a), the following item shall be substituted, namely:-
“(a) classification of a lease contract in which acquiree is the lessor as either an
operating lease or a finance lease in accordance with Ind AS 116, Leases; and”;

(iii) after paragraph 28, the following paragraphs shall be inserted, namely:-
“Leases in which the acquiree is the lessee
28A The acquirer shall recognise right-of-use assets and lease liabilities for leases
identified in accordance with Ind AS 116 in which the acquiree is the lessee. The
acquirer is not required to recognise right-of-use assets and lease liabilities for:
(a) leases for which the lease term (as defined in Ind AS 116) ends within 12 months
of the acquisition date; or
(b) leases for which the underlying asset is of low value (as described in paragraphs
B3–B8 of Ind AS 116).
28B The acquirer shall measure the lease liability at the present value of the remaining
lease payments (as defined in Ind AS 116) as if the acquired lease were a new
lease at the acquisition date. The acquirer shall measure the right-of-use asset at
the same amount as the lease liability, adjusted to reflect favourable or
unfavourable terms of the lease when compared with market terms. ”;
(iv) after paragraph 64K, the following paragraphs shall be inserted, namely:-
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“64L Omitted *
64M Ind AS 116 amended paragraphs 14, 17, B32 and B42, deleted paragraphs B28–B30
and their related heading and added paragraphs 28A–28B and their related heading.
An entity shall apply those amendments when it applies Ind AS 116.”;
(v)in Appendix B,
(a) paragraphs B28, B29 and B30 along with the heading ‘Operating leases’ shall be
omitted;
(b) paragraph B32(a) shall be omitted;
(c) for paragraph B42, the following paragraphs shall be substituted, namely:-
“B42 In measuring the acquisition-date fair value of an asset such as a building or a
patent that is subject to an operating lease in which the acquiree is the lessor, the
acquirer shall take into account the terms of the lease. The acquirer does not
recognise a separate asset or liability if the terms of an operating lease are either
favourable or unfavourable when compared with market terms.”;
(vi) in Appendix 1,
(a) for paragraph 5, the following paragraphs shall be substituted, namely:-
“5 Paragraphs 64-64J and 64L related to effective date have not been included in Ind AS
103 as these are not relevant in Indian context. However, in order to maintain
consistency with paragraph numbers of IFRS 3, these paragraph numbers are retained
in Ind AS 103.
6. The following paragraph numbers appear as ‘Deleted’ in IFRS 3. In order to maintain
consistency with paragraph numbers of Ind AS 103, the paragraph numbers are
retained in Ind AS 103:
(a)Paragraph B28- B30
(b)Paragraph B32(a)”;
III. in “Indian Accounting Standard (Ind AS) 104”, –
(i) in paragraph 4, for item (c), the following item shall be substituted, namely:-
“(c) contractual rights or contractual obligations that are contingent on the future use of, or
right to use, a non-financial item (for example, some licence fees, royalties, variable
lease payments and similar items), as well as a lessee’s residual value guarantee
embedded in a lease (see Ind AS 116, Leases, Ind AS 115, Revenue from Contracts
with Customers, and Ind AS 38, Intangible Assets).”;
(ii)after paragraph 41G, the following paragraphs shall be inserted, namely:-
“41H Omitted *

* Refer Appendix 1
6
41 I Ind AS 116 amended paragraph 4. An entity shall apply that amendment when it
applies Ind AS 116.”;
(iii) in Appendix 1, for paragraph 4, the following paragraph shall be substituted, namely:-
“4 Paragraphs 40-41F and 41H related to effective date have not been included in Ind
AS 104 as these are not relevant in Indian context. However, in order to maintain
consistency with paragraph numbers of IFRS 4, these paragraph numbers are retained
in Ind AS 104.”.
IV. in “Indian Accounting Standard (Ind AS) 107”, –
(i) in paragraph 29 for items (c) and (d), the following items shall be substituted, namely:-
“(c) for a contract containing a discretionary participation feature (as described in Ind AS
104) if the fair value of that feature cannot be measured reliably; or
(d) for lease liabilities”;
(ii) after paragraph 42H, the following paragraphs shall be inserted, namely:-
“42 I-42S Omitted *
Effective date and transition
43-44BB Omitted*
44CC Ind AS 116 amended paragraphs 29 and B11D. An entity shall apply those
amendments when it applies Ind AS 116.”;
(iii)in Appendix B, in paragraph B11D for item (a), the following item shall be substituted,
namely:-
“ (a) gross lease liabilities (before deducting finance charges); ”;
(iv) in Appendix 1, after paragraph 4, the following paragraph shall be inserted, namely:-
“5. Paragraphs 42I-42S of IFRS 7 have not been included in Ind AS 107 as these
paragraphs relate to Initial application of IFRS 9 which are not relevant in Indian
context. Paragraphs 43-44BB related to effective date and transition given in IFRS
7 have not been given in Ind AS 107 since it is not relevant in Indian context.
However, in order to maintain consistency with paragraph numbers of IFRS 7,
these paragraph numbers are retained in Ind AS 107. ”.
V. in “Indian Accounting Standard (Ind AS) 109”, –
(i) in paragraph 2.1, for item (b), the following item shall be substituted, namely:-

* Refer Appendix 1
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“(b) rights and obligations under leases to which Ind AS 116, Leases applies.
However:
(i) finance lease receivables (i.e. net investments in finance leases) and
operating lease receivables recognised by a lessor are subject to the
derecognition and impairment requirements of this Standard;
(ii) lease liabilities recognised by a lessee are subject to the derecognition
requirements in paragraph 3.3.1 of this Standard; and
(iii) derivatives that are embedded in leases are subject to the embedded
derivatives requirements of this Standard. ”;
(ii) in paragraph 5.5.15, for item (b), the following item shall be substituted, namely:-
“(b) lease receivables that result from transactions that are within the scope of
Ind AS 116, if the entity chooses as its accounting policy to measure the loss
allowance at an amount equal to lifetime expected credit losses. That
accounting policy shall be applied to all lease receivables but may be applied
separately to finance and operating lease receivables. ”;
(iii) after paragraph 7.1.4, the following paragraph shall be inserted, namely:-
“7.1.5 Ind AS 116 amended paragraphs 2.1, 5.5.15, B4.3.8, B5.5.34 and B5.5.46. An
entity shall apply those amendments when it applies Ind AS 116.”;
(iv) in Appendix B,
(a) in paragraph B4.3.8, for item (f), the following item shall be substituted, namely:-
“(f) An embedded derivative in a host lease contract is closely related to the host
contract if the embedded derivative is (i) an inflation-related index such as an
index of lease payments to a consumer price index (provided that the lease is not
leveraged and the index relates to inflation in the entity’s own economic
environment), (ii) variable lease payments based on related sales or (iii) variable
lease payments based on variable interest rates.”;
(b) for paragraph B5.5.34, the following paragraph shall be substituted, namely:-
“B5.5.34 When measuring a loss allowance for a lease receivable, the cash flows used
for determining the expected credit losses should be consistent with the cash flows
used in measuring the lease receivable in accordance with Ind AS 116, Leases.”;
(c) for paragraph B5.5.46, the following paragraph shall be substituted, namely:-
“B5.5.46 Expected credit losses on lease receivables shall be discounted using the same
discount rate used in the measurement of the lease receivable in accordance with
Ind AS 116.”;
(v) in Appendix E, paragraph 3 shall be omitted.
VI. in “Indian Accounting Standard (Ind AS) 113”, –
(i) in paragraph 6, for item (b), the following item shall be substituted, namely:-
“(b) leasing transactions accounted for in accordance with Ind AS 116, Leases; and”;
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(ii) for Appendix C, the following Appendices shall be substituted, namely:-
“Appendix C
Effective date and transition
This appendix is an integral part of the Ind AS and has same authority as the other parts of
the Ind AS.
C1-C5 Omitted *
C6 Ind AS 116, Leases, amended paragraph 6. An entity shall apply that amendment when
it applies Ind AS 116.”
Appendix D
References to matters contained in other Indian Accounting Standards
This appendix is an integral part of the Ind AS.
This appendix lists the appendices which are part of other Indian Accounting Standards
and make reference to Ind AS 113, Fair Value Measurement.
1. Appendix A, Distributions of Non-cash Assets to Owners contained in Ind AS 10,
Events after the Reporting Period.
2. Appendix D, Extinguishing Financial Liabilities with Equity Instruments contained in
Ind AS 109, Financial Instruments.”;
(iii) in Appendix 1, after paragraph 2, the following paragraph shall be inserted, namely:-
“3. Paragraphs C1-C5 of IFRS 13 have not been included in Ind AS 113 as these
paragraphs relate to effective date and transition which are not relevant in Indian
context. However, in order to maintain consistency with paragraph numbers of IFRS
13, these paragraph numbers are retained in Ind AS 113.”.