Background: Entity is engaged in the business of development of a special economic zone and industrial park. For development of SEZ, the Entity has purchased, and Government has awarded large parcels of land to the entity. The Company shall develop the land and shall create infrastructure on such land before selling/ leasing the plots to the other businesses. Thus, some portion of land with the entity will be sold in ordinary course of business and some shall be provided on finance lease. Consequently that land shall be classified and presented as “inventory” as per IAS 2 / Ind AS 2 – Inventories in the books of the entity. Due to some legal issues, there are uncertainties regarding the usage of the land and entity is uncertain about the exact usage of the land i.e., whether it will be sold or given on finance lease or operating lease on the date of reporting. Few queries with respect to the accounting of such property have been raised as below. As a part of this blog, we will an...

  Impact on accounting for financial instruments due to Interest Rate Benchmark Reform (IRBR) Overview By the end of year 2021, some major interbank offer rates such as LIBOR, EURIBOR, TIBOR will cease to be published and will be replaced by new interest rate benchmarks. This poses challenges for accounting of broad range of financial products and contracts which use these interbank offer rates as benchmarks. To address these challenges amendments have been made by IASB to the relevant IFRS’ and in India, corresponding changes have been made to Ind AS’. The amendments are issued to provide guidance on accounting of financial instruments during the phase of transitioning to new benchmarks (pre replacement phase) and after the replacement of existing interbank offer rates with new rates (replacement phase). This document aims to summaries the amendments and explain their practical applicability by way of an example. What is Interest Rate Benchmark Reform? Interest rate benchmarks (IR...