Version 9 - June 2025 (CUD release)
- Financial period: 12 months (annual)
- Target Industry: Manufacturing, Services, and Generic (excluding Financial Services)
Content update
This CUD release focuses on the legislative content changes for the period ending March 2026.
Legislative updates
Accounting Standards: Quick Referencer (As on April 01, 2025)
The Accounting Standards Board (ASB) of the ICAI has issued the Accounting Standards: Quick Referencer (As on April 01, 2025) updated based on developments such as:
- Revision in the criteria for classification of non-company entities for applicability of Accounting Standards issued by ICAI in November 2024, and
- Amendments to AS 22, Accounting for Taxes on Income, related to International Tax Reform – Pillar Two Model Rules (for non-company entities), issued in July 2024.
Change in criteria for identification of MSMEs
In accordance with the Announcement made by the Union Finance Minister Nirmala Sitharaman during her Budget Speech, the Central Government has now notified revised investment and turnover criteria for classification MSMEs. The following changes made in the criteria:
Enterprise Type | Investment in Plant & Machinery/Equipment (Amount in crores) | Investment in Plant & Machinery/Equipment (Amount in crores) | Turnover (Amount in crores) | Turnover (Amount in crores) |
|---|---|---|---|---|
N/A | Pre-revised | Revised | Pre-revised | Revised |
Micro Enterprise | 1 | 2.5 | 5 | 10 |
Small Enterprise | 10 | 25 | 50 | 100 |
Medium Enterprise | 50 | 125 | 250 | 500 |
The revised criteria will come into force from the 1 April, 2025.
Reporting of overdue MSME payment to the Ministry of Corporate Affairs
The Central Government vide its notification dated 25 March 2025, has directed all companies who get supply of goods or services from micro and small enterprise suppliers and whose payments exceed forty five days from the date of acceptance/ acceptance of goods or services as per the MSME Act, to submit a half yearly return to the Ministry of Corporate Affairs stating the following:
- The amounts of payments due, and
- The reasons of the delay. No separate date has been specified for application of this requirement.
No separate date has been specified for application of this requirement.
National Financial Reporting Authority (NFRA) and Financial Reporting Review Board (FRRB) and Quality Review Board (QRB)
has provided various observations and clarifications under IGAAP for the companies in its compendium. The same shall be reviewed by companies to assure that none of the disclosures are missing or are incorrect.
Various accounting considerations should be accounted for due to government interventions and tariffs
Issues like Geopolitical instability and conflicts, Fluctuation in Commodity prices and Forex rates, Imports and exports restrictions, Supply chain disruptions, Higher refinancing costs and Tariffs Increase could lead to impacts on financial statements like Going concern (Loss of significant customers base/ critical suppliers and Inability to sell) , Revenue recognition and measurement, Impairment of assets, Fair value measurement, Onerous contracts, Control/ significant influence assessment, Hyperinflationary economies, Subsequent events and Estimation Uncertainty Disclosures. The companies should review the various impact on its business.
Climate related matters & Macroeconomic and geopolitical uncertainty
Given the current economic environment, entities should consider whether additional disclosures are necessary to explain macroeconomic and geopolitical events and related transactions subsequent to the previous reporting period that are significant to their financial statements. For instance, the current macroeconomic and geopolitical environment affects the assumptions and estimation uncertainty associated with the measurement of assets and liabilities. Therefore, entities should carefully consider whether additional disclosures are necessary to help users of financial statements understand the impact of those uncertainties and corresponding judgements applied in the financial statements. The education material also highlights that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that primary users of financial statements (hereafter, investors) make on the basis of those financial statements, which provide financial information about a specific company. For example, information about how management has considered climate-related matters in preparing a company’s financial statements may be material with respect to the most significant judgements and estimates that management has made.
MoEFCC
During the period, MoEFCC issued rules/ draft rules particularly dealing with waste processing, waste management, extended producer responsibility (EPR) targets, etc, which are summarized in below table. Companies are required to carefully evaluate accounting obligations of these rules.
Sr. No. | Rules / Draft Rules | Applicability Date |
|---|---|---|
1 | Environment Protection (End-of-Life Vehicles) Rules, 2025 | 1 April 2025 |
2 | Draft Liquid Waste Management Rules, 2024 | 1 October 2025 |
3 | Draft Solid Waste Management Rules, 2024 | 1 October 2025 |
4 | Draft Environment Protection (Extended Producer Responsibility for Packaging made from paper, glass and metal as well as sanitary products) Rules, 2024 | 1 April 2026 |
Companies (Management and Administration) Amendment Rules, 2025
The MCA has notified the Companies (Management and Administration) Amendment Rules, 2025 whereby the forms Nos MGT-7 (Annual Return (other than OPCs and Small Companies) ), MGT-7A (Abridged Annual Return for OPCs and Small Companies) and MGT-15 (Form for filing Report on Annual General Meeting) have been substituted with the revised e-Forms of the same numbers. The amendments will come into force with effect from 14 July 2025.
Companies (Audit and Auditors) Amendment Rules, 2025
The MCA has notified the Companies (Audit and Auditors) Amendment Rules, 2025 whereby among other changes the revised formats for statutory forms - ADT-1 (auditor appointment), ADT-2 (auditor removal), ADT3 (auditor resignation), and ADT-4 (fraud reporting). Key changes in ADT-4 include detailed descriptions of fraud (nature, modus operandi, period, detection, etc.), amount of losses, identification of involved persons, management's response and corrective actions, etc.
Also, it is required that going forward, ADT-4 must be filed electronically. The earlier requirement to prepare and submit fraud reports on the auditor's letterhead has been specifically removed. The amendments shall come into force with effect from 14 July 2025.
Companies (Accounts) Second Amendment Rules, 2025
The MCA has notified the Companies (Accounts) Second Amendment Rules, 2025 whereby the requirement to submit Forms such as AOC-1 (Statement containing salient features of the financial statement of Subsidiaries/ associate companies/ joint ventures) and Form AOC-2 (Disclosure of related transactions) has been replaced with the requirements to submit e-Forms AOC-1 and AOC-2. The MCA has also notified revised Forms AOC-1, AOC-2, AOC-4 (Form for filing financial statement and other documents) and CSR-2 (Corporate Social Responsibility reporting).
Also, going forward, the Board report should include disclosures covering (i) details of complaints received, disposed of, and pending for the Sexual Harassment, and (ii) details of the company’s compliance with the Maternity Benefit Act, 1961.
It is also required that a copy of the signed financial statements duly authenticated as per section 134 of the Act (including Board‘s report, auditors‘ report and other documents) in portable document format will also be attached with the XBRL Forms.
The amendments will come into force with effect from 14 July 2025.
Related Content
-
India GAAP
Format:
Article