TOPIC:-ACCOUNTING STANDARDS 27,28

BY:KAPIL KATUKE
ABHISHEK KUMAR
 Accounting standard - 27
FINANCIAL REPORTING OF Interests in Joint
Ventures
 Applicable in accounting for interests in joint
ventures and the reporting of joint venture
assets, liabilities, income and expenses in FS
of ventures and investors, regardless of the
structures or forms under which the joint
venture activities take place.
 Applicable whether independent or
consolidated FS presented by the venturer.
 A joint venture is a contractual arrangement
whereby two or more parties undertake an
economic activity, which is subject to joint
control.
 Joint control is the contractually agreed
sharing of control over an economic activity.
 Control is the power to govern the financial
and operating policies of an economic activity
so as to obtain benefits from it.
 A venture is a party to a joint venture and has
joint control over that joint venture.
 M/s BHEL and M/S NTPC, both Public Sector
Undertakings (PSU) have joined together and
promoted a Joint Venture Company, “NTPC BHEL
Power Projects Private Ltd (NBPPL)”

 Magnetic Merely, Suzuki Motor Corporation and

Maruti Suzuki India Limited have signed an
agreement for the creation of a joint venture in
India, aimed at the production of electronic
control units (ECU) for diesel engines.
 – Jointly controlled operations
 – Jointly controlled assets
 – Jointly controlled entities
ACCOUNTING STANDARD-28
IMPAIRMENT OF ASSETS
 Impairment denotes loss in value.

 An enterprise should assess, at each

balance sheet date, existence of any
indication of impairment. If any such
indication exists, the enterprise should
estimate the recoverable amount of the
asset.
- To ensure that the assets are carried at no
more than recoverable amount
- Recoverable amount not to exceed the amount
to be recovered through use or sale of the asset
- Impaired loss to be recognised in the financial
statement
- Impaired loss may be reversed in certain
circumstances
- To make certain disclosures for impaired assets .
Impairment loss - is the amount by which the carrying
amount of an asset exceeds its
recoverable amount

Carrying amount- is the amount at which an asset is

recognised in the balance sheet
(W.D.V.)

Recoverable - is the higher of an asset’s net selling

amount price and its value in use
 Recoverable amount is the higher of an asset’s
net selling price and value in use.

 Value in use is the amount obtainable from the

sale of an asset in an arm’s length transaction,
less the cost of disposal.

 After an impairment is recognised, the reduced

carrying amount of the asset shall be accounted
for as its new cost and depreciation would be
charged on the new cost for the remaining life.
 Does not apply to:
 inventories

 Assets arising from construction

contracts
 Financial instruments

 Deferred tax asset

 goodwill
THANK YOU