Accounting outsourcing

Accounting outsourcing 123

Accounting outsourcing:

We can handle complete accounting for your business so that you can focus on core business operations. Accounting would be done as per applicable laws to your business like Income tax, GST, Companies act, Transfer pricing provision, consolidated accounts etc.

Benefits of outsourcing:

  • Cost saving
  • No dependability on staff
  • Work done by experts
  • Focus on core business

IFRS Reporting Requirements:

  1. Statement of Financial Position / Balance Sheet: IFRS impacts the ways in which the workings of a balance sheet are reported.
  2. Statement of Comprehensive Income: It can be separated into a profit and loss statement and a statement of other income including property and equipment or it can take form of one statement.
  3. Statement of Changes in Equity/ statement of retained earnings: For the given financial period the company’s documented changes in earnings or profit.
  4. Statement of Cash flow:  In the given period, this report summarizes the company’s financial transaction, separating cash flow into operating, financing and Investing.

Usually considered an end product of Accounting is Financial Reporting. The typical components of reporting are:

  1. The financial statements consists of Balance Sheet, Profit and loss account, cash flow statement and Statement of changes in stock holder’s equity.
  2. Notes to financial statement.
  3. In case of listed companies quarterly and annual reports.
  4. In case of companies going for IPOs Prospectus.
  5. In case of public companies management discussion & analysis.

Ind AS Financials:

  1. Materiality Defined : Financial statements to disclose all material items. Items are material if they could, individually or collectively, influence the economic decisions that users make on the basis of financial statements.
  2. Materiality in SPL: Any item of income or expenditure which exceeds 1% of the revenue from operations or Rs 10 lakhs whichever is higher, to be disclosed separately.
  3. Third Balance Sheet: Where any item has been retrospectively restated, a third balance sheet to be prepared and presented.
  4. Proposed Dividend: In a sharp contrast to AS, if proposed dividend has been proposed after the financial dates, it cannot be recognized in the SPL. However, the disclosure for the same shall be given in the notes to accounts.

Cost accounting:

To successfully compete in today’s global marketplace, cost accounting fundamentals provides the necessary tools and concepts required for businesses. Various methodologies seen in practices related to inventory valuation, product pricing and cost analysis, the strength and weaknesses are clearly identified and explained. As a result, you can easily derived and implement the best practices.

Transfer Pricing:

International transactions and specified domestic transactions between associated enterprises (AE) transfer pricing provisions are applicable. Transactions between two or more AE involving one of the following activities is known as international transactions:

  1. The sale, purchase or lease of tangible or intangible property.
  2. The lending or borrowing of money
  3. The provisions of services or cost saving agreements.
  4. With an associated enterprises a transaction of business restructuring or reorganization irrespective of the fact it has bearing on the profit, income, losses or assets
  5. With a bearing on the profits, income, losses or assets of such enterprises, any other transactions.

Consolidation of financial statement:

Financial statements of an entity with multiple divisions or subsidiaries are known as consolidated financial statements. The financial Accounting standards Board defines consolidated financial statement reporting as reporting of an entity structured with a parent company and subsidiaries.

Consolidated balance sheet, consolidated statement of profit and loss and notes, explanatory material that form an integral part thereof and also consolidated cash flow are included in consolidated financial statements.

Section 129 (3) has been substituted via company Amendment Act,2017 with the following clause:

Where a company has one or more subsidiaries or associate companies it shall, in addition to financial statements provided under sub-section (2), prepare a consolidated financial statement of the company and of all the subsidiaries and associate companies in the same form and manner as that its own and in accordance with applicable accounting standards, which shall also be laid before the annual general meeting of the company along with the laying of its financial statement under sub-section(2).

The company shall provide a separate statement containing the salient features of the financial statement of its subsidiary or subsidiaries  and associate company or companies in such form as may be prescribed along with its financial statement.

A company just because has common directors and shareholders does not mean that sec 129(3) is applicable. For consolidation to apply, the company must hold shares in the other company.