Indian Accounting Standard (Ind AS) 16, Property, Plant, and Equipment, establishes comprehensive guidelines for the recognition, measurement, and disclosure of tangible fixed assets. Adherence to this standard is essential for ensuring transparency, accuracy, and consistency in financial reporting. This article examines the key observations reported by the FRRB of ICAI regarding compliance with Ind AS 16. It highlights significant disclosure gaps related to:
‣ Non-disclosure of Capital Work-in-Progress Movements – Failure to provide detailed reconciliation of CWIP
‣ Non-disclosure of Depreciation Methods – Missing information on the method applied for asset depreciation
‣ Non-disclosure of Charges on PPE for Secured Loans – Omission of details regarding pledged assets
‣ Non-disclosure of Useful Lives & Depreciation Rates – Lack of clarity on asset longevity and depreciation schedules
‣ Inconsistencies in Carrying Amounts of PPE – Discrepancies between opening and closing asset values
