This is the twenty fifth 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 2019 to June 2020. This compilation of opinions is termed as “Selected Opinions”.

During the period from July 2019 to June 2020, the Board issued written responses on 16 accounting enquiries. However, this compilation only includes the Board’s responses on the accounting enquiries which are relevant for guidance of general membership. Accordingly, this compilation does not include the Board’s written responses on the enquiries received from the regulators (such as SECP and SBP) on regulatory matters relating to financial reporting.

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 Accounting for Moulds under IAS 16 Property, Plant & Equipment
1.2 Treatment of employer’s unpaid contribution to defined benefit fund under IAS 26 Accounting & Reporting by Retirement Benefit Plans
1.3 Revenue recognition in immigration business under IFRS 15 Revenue from Contracts with the Customers
1.4 Accrual of mark-up on a defaulted loan under IFRS 9 Financial Instruments – Recognition & Measurement
1.5 Assessment of Associated Company, Related Party & Associate Relationship
1.6 Clarification on applicability of International Valuation Standards on fair value measurements done under IFRS 13 Fair Value Measurement
1.7 Application of IFRS 16 Leases in circumstances where entire lease payments are paid in advance
1.8 Recognition of membership fee in light of IFRS 15 Revenue from Customers, accounting of tenancy agreement in light of IFRS 16 Leases and disclosure of reimbursement expenses to a related party in light of IAS 24 Related Party Disclosures
1.9 Revenue recognition under IFRS 15 in the circumstances where customer has no intention and ability to pay consideration

AUDITING

1.10 Audit Report based on ATR-17
1.11 Opinion on accepting audit engagement