--- title: "Edition No. 2 | 14 June 2026 | BNPS and Associates LLP" url: "https://bnpsca.com/insight/edition-no-2-14-june-2026" description: "KEY HIGHILIGHTS: • Ind AS 1 carve-out removed from April 2026 — liability classification now based solely on balance sheet date covenant compliance. • ICAI–N..." --- # Edition No. 2 \| 14 June 2026 Written by: **[CA Chintan Patel](https://bnpsca.com/partner/ca-chintan-patel)** \| Topic: **Board Members** ![Edition No. 2 | 14 June 2026](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:1200:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/6a7aa73b97dab-Images-2.jpeg)14-06-2026 KEY HIGHILIGHTS: • Ind AS 1 carve-out removed from April 2026 — liability classification now based solely on balance sheet date covenant compliance. • ICAI–NFRA coordination framework formalised; NFRA confirmed as standard-setting authority; revised SA 600 and SA 299 effective. • ₹950 crore Haryana government accounts fraud — systemic controls failure across 3 banks, 8 departments; CBI probe ordered. | **B N P S AND ASSOCIATES LLP** \| Chartered Accountants | |---| | \| **BOARDROOM INTELLIGENCE** *Essential Insights on Financial Reporting, Audit, Governance, Regulation & AI* \| **14 June 2026** Vol. I \| Sample Edition \| | |---| | | **Chintan's Perspective** | |---|---| | ![Title: Chintan N. Patel - Description: Partner, B N P S And Associates LLP](https://bnpsca.com/public/assets/upload/images/original/6872083e8d605-11.png) **Chintan N. Patel** Partner – Financial Reporting & Assurance *B N P S And Associates LLP* | The removal of India's carve-out on Ind AS 1 liability classification is a technical change with significant practical consequences. For years, entities relied on post-year-end waivers to preserve non-current classification of liabilities in breach of covenants. That window closes from 1 April 2026. Finance teams preparing FY 2026-27 financial statements must conduct a clean review of loan agreements and covenant compliance at the balance sheet date — not after it. Auditors must reassess how they audit the classification of financial liabilities and the adequacy of related disclosures. For leveraged businesses, this is not a footnote item. It can materially reshape the balance sheet and trigger lender conversations that should have started earlier. | |---|---| | | **Top Developments** | |---|---| | **01** | **Ind AS 1: India's Liability Classification Carve-out Removed from April 2026** ***WHY IT MATTERS*** *Post-year-end waivers can no longer rescue non-current classification — entities must assess covenant compliance at the balance sheet date itself.* MCA's Second Amendment Rules 2025 remove the temporary Indian carve-out that permitted entities to classify a liability as non-current even where a covenant breach existed at year-end, provided a waiver was obtained after the reporting date. From 1 April 2026 both carve-outs are eliminated. Classification now depends solely on the entity's right to defer settlement existing at the balance sheet date — fully aligned with IAS 1 / IFRS. **PRACTICAL IMPLICATION** Finance teams must review loan agreements for covenant compliance at the balance sheet date before preparing FY 2026-27 statements. Where waivers were obtained after year-end, current classification is mandatory. | |---|---| | **02** | **ICAI and NFRA Establish Formal Coordination Framework for Audit Oversight** ***WHY IT MATTERS*** *After sustained friction over audit standard revisions, India's two principal audit oversight bodies have formalised their roles — with NFRA confirmed as the standard-setting authority.* Following disagreements over SA 600 (Group Audits), SA 299 (Joint Audits) and related standards, ICAI and NFRA have established a formal coordination mechanism to align on audit quality and standard implementation. The Solicitor General's clarification confirms NFRA's primacy in standard-setting; ICAI's role is formally repositioned as advisory. Revised SA 600 and SA 299 are effective April 2026. **PRACTICAL IMPLICATION** Audit practitioners must treat NFRA-issued standards as authoritative. Where ICAI and NFRA positions have differed, NFRA takes precedence. Further NFRA-led standard revisions will follow — firms should monitor and update methodologies. | |---|---| | **03** | **₹950 Crore Haryana Government Accounts Fraud — Controls Failure Across Eight Departments** ***WHY IT MATTERS*** *Government funds were siphoned through forged cheques and shell entities at three banks, exposing systemic gaps in public sector financial controls and bank verification processes.* Financial irregularities of approximately ₹950 crore were uncovered in February 2026 at Chandigarh branches of IDFC First Bank, AU Small Finance Bank and Kotak Mahindra Bank. The fraud involved forged cheques, fictitious shell firms and government department accounts under housing schemes. CBI probe recommended; 15 arrests made; ED has conducted raids across 19 premises. Eight government departments and 12 accounts are implicated. **PRACTICAL IMPLICATION** Auditors of government-linked entities must revisit fraud risk assessment procedures. Bank reconciliation independence, cheque verification controls and shell entity checks are non-negotiable — regardless of entity type or sector. | |---|---| | **04** | **IASB Issues IFRS 20 — New Standard on Regulatory Assets and Liabilities** ***WHY IT MATTERS*** *Companies subject to rate regulation must now recognise regulatory assets and liabilities, fundamentally changing balance sheet presentation for utilities, infrastructure and energy entities.* The IASB issued IFRS 20 Regulatory Assets and Regulatory Liabilities in May 2026, effective for periods beginning on or after 1 January 2029. The standard requires recognition of amounts arising from regulatory rate-setting, improving investor understanding of how rate regulation affects financial performance and cash flow prospects. IFRS 20 supersedes the interim IFRS 14. Early adoption is permitted. **PRACTICAL IMPLICATION** Indian entities reporting under full IFRS — or subsidiaries of multinationals in regulated sectors — should begin impact assessments now. Systems, processes and investor communication will need recalibration well before 2029. | |---|---| | | **This Matters More Than It Appears** | |---|---| | SEBI's FAQs on Regulation 33 — quarterly and annual financial results disclosures — may appear to be routine compliance guidance. They are not. The clarifications on newly listed entities, SME-listed companies and entities migrating from the SME to the Main Board resolve long-standing ambiguities that have triggered exchange queries and compliance notices. For CFOs and company secretaries of recently listed entities, or those contemplating listing, these FAQs define the precise baseline: timelines, audit committee review requirements, and quarterly filing obligations from day one. Read them before the next board meeting. | |---| **Source: SEBI** [View SEBI FAQs →](https://www.sebi.gov.in/sebidata/faqfiles/apr-2025/1745399101865.pdf) | | **AI Watch** | |---|---| | Grant Thornton's 2026 AI Impact Survey finds 78% of business executives lack confidence they could pass an independent AI governance audit within 90 days — and only 21% have a mature AI governance model in place. For finance functions deploying AI in journal entry review, financial close or forecasting, this is a direct board and audit committee risk. The question auditors will increasingly ask: ‘Show me your AI governance framework.’ Source: 2026 AI Impact Survey. | |---| | | **Quote of the Day** | |---|---| | *“Only when the tide goes out do you discover who’s been swimming naked.”* — Warren Buffett | |---| | | **About BNPS** | |---|---| B N P S And Associates LLP is a firm of Chartered Accountants having offices at Ahmedabad, Bengaluru, Raichur, Rajkot. The firm provides professional services in the areas of audit, assurance, financial reporting, taxation, risk advisory, due diligence and related professional services. For details refer, [www.bnpsca.com](https://www.bnpsca.com). **Disclaimer:** This publication is intended solely for informational purposes and should not be construed as professional advice. Readers should seek professional guidance before acting on any information contained herein. - Tags: - [Ind AS](#) - [NFRA](#) - [Fraud](#) - [Board](#) - [Audit Committee](#) ![CA Chintan Patel](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:200:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/6872083e8d605-11.png)About the Author #### CA Chintan Patel Ahmedabad Ind AS Advisory Statutory Audit of Listed Companies ESG,BRSR [View Profile ](https://bnpsca.com/partner/ca-chintan-patel) #### Share this on social media : [ Share ](http://www.facebook.com/sharer.php?u=https://bnpsca.com/insight/edition-no-2-14-june-2026) [ Tweet ](https://twitter.com/intent/tweet?url=https://bnpsca.com/insight/edition-no-2-14-june-2026) [ Post ](https://vk.com/share.php?url=https://bnpsca.com/insight/edition-no-2-14-june-2026) [ post ](https://www.linkedin.com/shareArticle?mini=true&url=https://bnpsca.com/insight/edition-no-2-14-june-2026) [ Share ](https://api.whatsapp.com/send?text=https://bnpsca.com/insight/edition-no-2-14-june-2026) [ post ](https://reddit.com/submit?url=https://bnpsca.com/insight/edition-no-2-14-june-2026) [ pin ](https://pinterest.com/pin/create/button/?url=https://bnpsca.com/insight/edition-no-2-14-june-2026) ## You May Also Like Similar Articles You Might Find Interesting [ ![Edition No. 1 | 13 June 2026](https://imageproxy.inlancer.in/pr:sharp/f:webp/rs:fit:500:0/g:sm/plain/https://bnpsca.com/public/assets/upload/images/original/6a7aa5f36c663-Images-1.jpeg) ](https://bnpsca.com/insight/edition-no-1-13-june-2026 "Blog Link")13-06-2026 #### [Edition No. 1 \| 13 June 2026](https://bnpsca.com/insight/edition-no-1-13-june-2026 "Edition No. 1 | 13 June 2026") By Chintan N. 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