This is the twenty fourth compilation of opinions issued by the Institute’s Accounting Standards Board (the Board) and the Auditing Standards & Ethics Committee (the Committee) on the enquiries raised by members, entities and regulators during the period from July 2018 to June 2019. This compilation of opinions is termed as “Selected Opinions”.

These selected opinions are issued for the general guidance of the members of the Institute. In this document, the accounting opinions represent the opinions of the Board and opinions related to auditing and ethical matters represent the opinions of the Committee. These are not the official opinions of the Council of the Institute. The opinions are operational in nature and not on issues on which relevant laws and rules are not explicit. These selected opinions are not a compendium of “legal advice”.

The opinions are based on the accounting and auditing principles on the date the Board and the Committee finalises the particular opinion. The date of finalisation of each opinion is indicated along with the opinion. Since an opinion is arrived at on the basis of the facts and circumstances of each individual query provided by the enquirer, it may change if the facts and the circumstances change. An opinion may also change due to subsequent developments in law, pronouncements made by the Institute and other relevant changes. The Institute, the Board and the Committee will have no liability in connection with such opinion.

In every case the members have to take their own decisions in the light of facts and circumstances in accordance with related laws and rules applicable on the issue at that point in time.

ACCOUNTING

1.1 Guidance on reclassification of investments out of fair value through profit or loss category under IAS 39 Financial Instruments: Recognition and Measurement

1.2 Accounting treatment of foreign exchange losses due to recent depreciation of PKR, used for acquisition of revalued property, plant and equipment

1.3 Application of IAS 12 Income Taxes on recognition in profit and loss account/equity of surplus retained in statutory funds of life insurance companies

1.4 Accounting and presentation of compensation for delayed delivery of vehicles

1.5 Treatment of retained balance in Participants’ Takaful Fund of Window Takaful Operations in published financial statements

1.6 Accounting treatment of cost incurred on bridge construction under ‘Design, Finance, Build, Operate and Transfer’ (DFBOT) basis

1.7 Guidance on revenue recognition for a software distributor

1.8 Deferred tax in case of Final Tax Regime (FTR)

1.9 Clarification of disclosure requirements for disposal of fixed assets under the Companies Act, 2017

AUDITING

2.1 Opinion on Retention of Audit Report and Copy of Financial Statements Signed by the Client

2.2 Disclosure of Information to Managing Director of DEF Company Limited

2.3 Going Concern of a Private Limited Company