A private limited Company wants to restate its financials from the last 6 years. This is primarily due to change in the depreciation figures. The depreciation on P&M has been revised downwards as the useful life of the asset has been evaluated to me more on account of valuation from technical expert whose report says that the life of the asset is more than what is prescribed by the company's act. Now the BOD of the company wants to restate the financials retrospectively to show profits for the earlier years and improve their financial standing. Is this change possible and what are the consequences for the auditor in such a case ??
I think the companies just need to follow the companies act they can't use the prediction of an expert for the useful life of an asset.
I think there will be no need of restatement.
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Thank you
Hi,
As per my understanding, there is no need of restatement.
Hi,
- It is better to take the effect till 31.03.2018 and disclose it in notes to Accounts.
Thanks
Hi,
Restatement of financials of previous years is not that easy.Even the auditors are not comfortable for the same.
It is advisable that disclose the changes in current year financials through notes to accounts.
It is advisable to take the impact in the current year financials ending 31st Mar 2018. Revising all the prior year financials would be very complex and not required.
Regards
Nikhil.
Hi
Its not advisable to restate financials from last 6 years. Rather is better to disclose it in notes to accounts.
In my opinion ,you can revalue the asset(appreciation) with prospective effect.
Hope it helps
Hi
Only the financials of FY 17-18 need to be shown with the new asset values.
The auditor shall mention such change in valuation and depreciation in Note to Accounts.
Hi,
I would not recommend you to restate the financial statements for last six years. It's very long and cumbersome process.
Alternatively, You can take the effect of change in asset price in current year and show the effect in notes to accounts.
The current IND AS provision does have provision for reflecting the fair value of assets. However, there should be adequate justification and documents to the same.
All the reporting for the past years must have been done and hence merely restating them would not help. If the books are just restated for raising a loan or something, there could be serious consequences. Restating can be done for future years.
Also, the value of assets in the books does not impact the tax working which follows WDV method on the cost of the assets.
