Report regarding framework for computation of book profit for the purposes of levy of Minimum Alternate Tax (MAT) under section 115JB of the Income-tax Act, 1961 for Indian Accounting Standards (Ind AS) compliant companies in the year of adoption and thereafter

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....g Standards (Ind AS) compliant companies in the year of adoption and thereafter - reg. Kindly refer to the interim report dated 18th March, 2016 submitted by the Committee on the above subject. The comments/ suggestions received from stakeholders on the interim report, which was placed in the public domain vide Press Release dated 28th April, 2016, have been examined by the Committee. 2. The recommendation/ suggestions on the main issues relating to first time adoption raised by the stakeholders are as under. I. Fixed Assets - Adjustment to retained earnings Issue: As per Indian Accounting Standard (Ind AS) 101, First-time Adoption of Indian Accounting Standards, an entity may elect to measure an item of property, plant and equipmen....

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....sal/ retirement of such assets shall be computed ignoring the aforesaid retained earnings adjustment. * Other adjustments to fixed assets (like Decommissioning Liability, Foreign exchange capitalisation/decapitalization, Borrowing costs adjustments etc.) on the date of transition shall also be ignored in a similar manner. The same principles shall also apply to Intangible assets (Ind AS 38). II. Leases - Straight lining of lease rentals Issue: As per Indian Accounting Standard (Ind AS) 17, Leases, lease payments under an operating lease shall not be recognised as an expense/income on a straight-line basis over the lease term if the payments to the lessor are structured to increase in line with expected general inflation to compens....

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....implicity of implementation, the Committee recommends option C. III. Investments - Fair value adjustments through profit & loss account Issue: As per Indian Accounting Standard (Ind AS) 109, Financial Instruments, an entity shall measure its financial asset or financial liability at fair value or at amortised cost. Examples of financial asset or financial liability that are required to be recognised at fair value on each reporting date with changes in fair value being recognised in the profit or loss includes - * Investment in equity shares/ mutual funds carried at fair value through profit or loss; * Investment in subsidiaries/ associates/ joint ventures carried at fair value through profit or loss; * Investment in preferenc....