ICAI releases FAQs on SA 570 (Revised), ‘Going Concern’

ICAI releases FAQs on SA 570 (Revised), ‘Going Concern’

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The Institute of Chartered Accountants of India ( ICAI ) has issued Frequently Asked Questions on SA 570 (Revised), ‘Going Concern’ (Applicable for audits of financial year 2017-18).

ICAI has issued SA 570 (Revised), “Going Concern” along with other Standards, SA 700 (Revised), SA 701, SA 705 (Revised), SA 706 (Revised) & SA 260 (Revised) on 17th May, 2016 which were made applicable w.e.f. 01.04.2017 (for audits of financial statements for periods beginning on or after April 1, 2017).

The Council of ICAI, by issuing an announcement, deferred the applicability of SA 700 (Revised), SA 701, SA 705 (Revised), SA 706 (Revised) by one year, i.e. effective for audits of financial statements for periods beginning on or after April 1, 2018. However, SA 260 (Revised) & SA 570 (Revised) are applicable for audits of financial statements for periods beginning on or after April 1, 2017.

Now, The Auditing and Assurance Standards Board (AASB) of the ICAI, in view of the queries received from the members with respect to implementation of SA 570 (Revised) for the audit of FY 2017-18, has issued the following four FAQs on SA 570 (Revised)

Question 1: What are the main Implications of SA 570(Revised) for Auditor’s Report?
Answer: The main implications are summarised below:

S.N. Situation Reporting requirements in SA 570 (Revised)
1 Use of Going Concern Basis of Accounting in Financial Statements is inappropriate Adverse opinion {Refer paragraph 21 of SA 570(Revised)}
2 Use of Going Concern Basis of Accounting in Financial Statements is appropriate, but a material uncertainty exists  

 

2.1: Case 1:
Adequate disclosure of Material Uncertainty is made in Financial Statements
Unmodified opinion but a Separate Paragraph “Material Uncertainty Related to Going Concern” to highlight material uncertainty {Refer paragraph 22 of SA 570 (revised)}
2.2: Case 2:
Adequate disclosure of Material Uncertainty is not made in Financial Statements
Qualified or Adverse opinion {Refer paragraph 23 of SA 570 (Revised)}

 

Question 2: Is Emphasis of Matter Paragraph (EOM) also required to be given for the situation where the auditor is required to give Separate Paragraph on “Material Uncertainty Related to Going Concern” to highlight material uncertainty” as per SA 570 (Revised).

Answer: As per pre-revised SA 570 (which was applicable till audits of F.Y. 2016-17) an Emphasis of Matter Paragraph (EOM, refer para 19) was required to be given in the situation given in case 2.1 as above in question 1. SA 570 (Revised) in such situation requires a separate paragraph ‘Material Uncertainty Related to Going Concern’ instead of EOM Paragraph.

Accordingly, in situations which warrant separate Paragraph on “Material Uncertainty Related to Going Concern” as per SA 570 (Revised), auditor is not required to give EOM paragraph.

Question 3: Whether Illustrations of Auditor’s Reports given in Appendix of SA 570 (Revised) are applicable in respect of audits of F.Y. 2017-18?

Answer: The audit reports for audits of F.Y. 2017-18 are to be issued as per the applicable format of auditor’s report prescribed by extant SA 700, SA 705, SA 706 and the illustrative formats given in Appendix of SA 570 (Revised) make reference to new/Revised SAs, i.e. SA 700 (Revised), SA 701, SA 705 (Revised) & SA 706 (Revised) which are not applicable for audits of financial year 2017-18. Therefore, Illustrations of Auditor’s Reports given in SA 570 (Revised) are not applicable in respect of audits of F.Y. 2017-18.

Question 4: What will be the manner of reporting under SA 570 (Revised) in audits of F.Y. 2017-18, where use of Going Concern Basis of Accounting in Financial Statements is appropriate, but a material uncertainty exists and adequate disclosure of Material Uncertainty is made in Financial Statements.

Answer: In the given situation, the section ‘Material Uncertainty Related to Going Concern’ may be included in the below cited manner:

“Material Uncertainty Related to Going Concern
We draw attention to Note XX in the financial statements, which indicates that the Company incurred a net loss of ZZZ during the year ended December 31, 20X1 and, as of that date, the Company’s current liabilities exceeded its total assets by YYY. As stated in Note 6, these events or conditions, along with other matters as set forth in Note XX, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.”

Caution:  The aforesaid paragraph is illustrative and should be amended appropriately based on circumstances which leads to material uncertainty regarding going concern.

Also, this section should be placed immediately after the opinion paragraph and before the EOM/OM paragraph, if any, using the applicable format of auditor’s report.

 

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ITR-5 and 7 ready for E-Filing

ITR-5 and 7 ready for E-Filing

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The Income Tax department has today informed the taxpayers that ITR-5 and 6 has been enabled in the e-portal for filing. Till now, all Forms except ITR 6 are available now in the portal.

“ITR 1, 2, 3, 4, 5 and 7 for AY 2018-19 is now available for e-Filing. ITR 6 will be available shortly,” a statement appeared in the income tax department today said.

On April this year, The Central Board of Direct Taxes (CBDT) has notified Income Tax Return Forms (ITR Forms) for the Assessment Year 2018-19.

ITR-5 has to be filed by a person being a firm, LLPs, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), cooperative society and local authority.

ITR-7 is filed when persons including companies fall under section 139(4A) or section 139 (4B) or section 139 (4C) or section 139 4(D).

  • Return under section 139(4A) is required to be filed by every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes.
  • Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount which is not chargeable to income-tax.
  • Return under section 139(4C) is required to be filed by every
  1. scientific research association ;
  2. news agency ;
  3. association or institution referred to in section 10(23A);
  4. institution referred to in section 10(23B);
  5. fund or institution or university or other educational institution or any hospital or other medical institution.
  • Return under section 139(4D) is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section.

 

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Govt. extends Due date of Filing GSTR-3B For April 2018 to May 22nd

Govt. extends Due date of Filing GSTR-3B For April 2018 to May 22nd

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The Central Government today extended the due date for filing GSTR-3B to 22nd May 2018. Earlier, the last date was on 20th May.

“Attention: the Last date of Filing GSTR-3B for the month of April 2018 has been extended to 22nd May 2018,” a statement appeared in the GST Portal said.

GSTR-3B

GSTR-3B is a monthly return. All regular taxpayers need to file this return till June 2018. Taxpayers can file their return on GST Portal. Taxpayers have to file this return by 20th of the subsequent month.

The due date has been extended due to the technical glitches in the GST Portal which was not properly working due to technical glitches. Today also, the site was unavailable due to emergency maintenance activity from 2:45 PM to 3:15 PM.

The last date for filing GSTR-5, GSTR-5A for the month of April is on 20th May 2018. However, these dates have not been changed yet.

The Finance Ministry also confirmed that “It has been decided to extend the last date for filing of return in FORM GSTR-3B for the month of April 2018 for two days, i.e, till 22nd May 2018. The notification in this regard shall be published shortly.”

gst 3B

Press Release on extension of date for filing return in FORM GSTR-3B 
for the month of April, 2018 till 22nd May, 2018

 

ITR-3 available in Income Tax Portal

ITR-3 available in Income Tax Portal

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The Income Tax Department has enabled ITR-3 which is applicable for individual and HUF who have income from profits and gains from business or profession. A total of four ITR Forms including ITR-1, 2, 3 and 4 has been launched by the department so far.

On April this year, The Central Board of Direct Taxes (CBDT) has notified Income Tax Return Forms (ITR Forms) for the Assessment Year 2018-19.

Initially, ITR-1 which can be filed by an individual who is resident other than not ordinarily resident, having income up to Rs.50 lakh and who is receiving income from salary, one house property / other income (interest etc.) has been enabled in the portal.

ITR Form-2 has also been rationalized by providing that Individuals and HUFs having income under any head other than business or profession shall be eligible to file ITR Form-2.  The Individuals and HUFs having income under the head business or profession shall file either ITR Form-3 or ITR Form-4 (in presumptive income cases).

The persons having income from following sources are eligible to file ITR 3, i.e, (i) carrying on a business or profession, or (ii) Return may include income from House property, Salary/Pension and Income from other sources.

The following changes have been made in ITR-3 for the year 2018-19.

  • In the general information tab an option to select section 115H (who is a non-resident Indian in any previous year, becomes assessable as a resident in India in respect of the total income of any subsequent year) has been added.
  • In the Profit and Loss schedule, the GST related details have been added
  • Limitation of maximum 40% depreciation in all depreciation related Schedules
  • Partners of partnership firms as against ITR 2 will have to file their returns in ITR 3

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