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Understanding Regulatory Changes In Financial Reporting (1)

Transparent reporting can help spot and stop financial dishonesty. For example, the RBI and SEBI in India work hard to ensure companies report their finances truthfully to protect investorsu200bu200bu200bu200b.<br>

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Understanding Regulatory Changes In Financial Reporting (1)

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  1. Understanding Regulatory Changes In Financial Reporting

  2. About CFO Bridge • The story of CFO Bridge began when our founder V Srinivasan heard his close friends from successful startups struggling to hire top financial management talent during his daily morning walks. • Upon realizing start-ups and SMEs’ struggle to match the salary offered by the bigger players, Srinivasan started CFO Bridge in 2012. • Fast forward to 2024, CFO Bridge is India’s largest and most sought-after virtual CFO services and financial services provider.

  3. Understanding Regulatory Changes In Financial Reporting • Have you ever wondered how the changing financial reporting rules could impact how businesses operate and communicate their financial health? Financial reporting standards ensure that businesses report their financial data in a manner that is accurate, consistent, and comparable across industries and borders.  • However, these regulations are not static; they evolve in response to economic shifts, technological advancements, and the need for greater transparency in financial markets. • Keep reading to understand the significance of staying ahead with these changes and how they redefine financial reporting.

  4. Major Regulatory Changes in Financial Reporting • In 2023, India saw significant regulatory changes aimed at streamlining corporate governance and making it easier for businesses to operate. • These reforms, introduced by the Ministry of Corporate Affairs (MCA), focus on simplifying processes for company incorporation, liquidation, and compliance with antitrust regulations. • Here's a closer look at these significant changes:

  5. Business Dissolution Initiatives • The MCA introduced the Central Processing for Accelerated Corporate Exit (C-PACE) system in 2023, operational from May 1, following its announcement in the 2022 Union Budget. This initiative represents a significant step towards simplifying the voluntary dissolution of companies. • C-PACE aims to reduce the time and paperwork traditionally associated with closing a business by providing swift approvals for companies looking to cease operations voluntarily. This move is part of a broader strategy to make it easier for companies to wind up operations without enduring lengthy and complex procedures.

  6. Amendments in Merger Control and Antitrust Laws • 2023 was a landmark year for the overhaul of India's merger control and antitrust regulations. The Competition (Amendment) Bill, 2023, passed by both houses of Parliament and receiving Presidential assent, marked a significant update to the country's antitrust regime and the Competition Act 2002, which is India’s primary competition law.

  7. Updates to Accounting Standards • The MCA issued the Companies (Indian Accounting Standards) Amendment Rules, 2023, which came into effect on April 1, 2023. This amendment introduced changes to several Indian Accounting Standards (IndAS), including IndAS 1, IndAS 8, and IndAS 12. • Amendments to Ind AS 1 are related to the Presentation of Financial Statements. Amendments to Ind AS 1 are related to the Presentation of Financial Statements. Amendments to Ind AS 8 are related to the Accounting Policies, Changes in Accounting Estimates and Errors. Amendments to Ind AS 12 are related to the Income Taxes.

  8. Extensions for Annual and Extraordinary General Meetings • In response to the ongoing need for flexibility due to various challenges, including those posed by the global pandemic, the MCA extended the timelines for virtual Annual and Extraordinary General Meetings (AGMs and EGMs) through the General Circular no. 09/2023. • The order further allows the formats for conducting the AGM and EGMs through Video Conference (VC) or other Audio visual (OVAM) or transact items through postal ballot for the year 2023 or 2024 on or before 30th September, 2024.

  9. Innovations in Insolvency Resolution Procedures • A notable amendment was made to the Companies (Incorporation) Rules, 2014, facilitating the smooth relocation of registered offices post-resolution plan approval under the Bankruptcy Code. • This amendment, notified through G.S.R. 790(E) dated October 20, 2023, allows companies under new management to move their registered office, provided there is no pending appeal against the resolution plan and no ongoing inquiry, inspection, or investigation.

  10. Transition to Electronic Form Processing • The MCA made a significant move by transitioning additional e-forms from Non-STP (Straight Through Process) to STP mode. This change means that these forms can now be processed and approved electronically without the need for manual intervention. • By moving towards an STP model, the MCA aims to speed up the approval process for various corporate filings, reduce paperwork, and minimize the chances of human error. This transition is expected to benefit thousands of companies by making it quicker and more straightforward to comply with regulatory requirements.

  11. Mandate on Dematerialization of Shares for Private Companies • Another significant regulatory change in 2023 was the mandate on the dematerialization of shares for larger private companies. • This requirement, notified under GSR 802(E) dated October 27, 2023, signifies a shift towards aligning private companies with contemporary market practices, ensuring greater transparency and security in share ownership and transactions. • This move is expected to bring about several benefits, including reduced risks of loss, theft, or forgery of share certificates, streamlined processes for share transfers, and improved efficiency in handling corporate actions.

  12. Conclusion • It's crucial for businesses to stay updated and adjust to the latest regulatory modifications in financial reporting to ensure they operate within legal boundaries and achieve success. Utilizing technological advancements and automation, as well as consulting with professionals, can greatly simplify this adjustment. • CFO services India are essential in guiding companies through these regulatory changes. Companies should make the most of technology and expert advice to remain compliant and ahead in the market. For specialized assistance, CFO Bridge is a reliable source for thorough support in financial reporting and adherence to regulations.

  13. Contact Us Address: AWFIS, 10th Floor, R- City Mall, LBS Marg, Ghatkopar West, Mumbai, 400086 Contact no: +91 88991 17255 Email: vidya@cfobridge.com Website: https://cfobridge.com/

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