{"id":1449,"date":"2021-03-11T02:52:22","date_gmt":"2021-03-11T02:52:22","guid":{"rendered":"http:\/\/slaasmb.gov.lk\/?page_id=1449"},"modified":"2021-03-11T02:58:50","modified_gmt":"2021-03-11T02:58:50","slug":"observations-in-2019","status":"publish","type":"page","link":"https:\/\/slaasmb.gov.lk\/si\/observations-in-2019\/","title":{"rendered":"Observations in 2019"},"content":{"rendered":"

Observations made on review of financial statements during 2019<\/h1>\n
    \n \t
  1. \n
      \n
    1. \n

      Undertakings obtained to make the required corrections<\/h4>\n<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n\n\n

      Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) obtained undertakings from two specified business enterprises (SBEs) to make corrections in the financial statements. These undertakings resulted in corrections to net profits\/equity amounting to Rs. 988 million. <\/p>\n\n\n\n

      Types of items for which the undertakings were obtained along with reference to the Sri Lanka Accounting Standards (Prefixed SLFRS\/ LKAS) not complied with by the SBEs are as follows.<\/p>\n\n\n\n

      Failure to recognise a deferred tax asset\/ liability in relation to buildings classified as investment property. (Reference; LKAS 12 paragraph 51)<\/p>\n\n\n

        \n
      • Failure to reflect the Available for Sale (AFS) investments at the amounts for which the company could establish the ownership and the existence (Reference; LKAS 32 paragraph 11 and The Conceptual Framework for Financial Reporting paragraph 4.44)<\/li>\n
      • Failure to reflect the amounts payable to related parties at the amounts of their present obligation. (Reference; LKAS 32 paragraph 11 and The Conceptual Framework for Financial Reporting paragraph 4.46)<\/li>\n
      • Failure to recognise an allowance for impairment to reflect the amounts due from related parties at their recoverable values. (Reference; LKAS 39 paragraph 58) <\/li>\n<\/ul>\n
          \n \t
        1. \n
            \n
          1. \n

            Letters of Assistance<\/h4>\n<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n\n\n

            Departures from Sri Lanka Accounting Standards detected, which were material, but not\nsignificant as to require the use of procedure using statutory provisions, were informed to\nSBEs, by letter, without extensive inquiries, so that the SBEs could, where necessary, take\ncorrective action on their own. Such letters not being directions issued by SLAASMB, are\nintended to be letters of assistance.<\/p>\n\n\n\n

            The main findings relating to which letters of assistance were sent to the SBEs are set out\nbelow<\/p>\n\n\n

              \n
            • Failure to make adequate disclosure at the end of the reporting period, on the nature
              \nand extent of risks arising from financial instruments to which, the entity is exposed
              \n\u2013 in 31 SBEs
              \n(Reference; SLFRS 7 paragraphs 35, 36 and 37)<\/li>\n
            • Failure to make adequate disclosure relating to valuation techniques used, inputs to
              \nthe valuation techniques, quantitative information about significant unobservable
              \ninputs used, significant adjustments made to the inputs and the fair value hierarchy
              \nfor each class of assets and liabilities measured at fair value \u2013 in 28 SBEs
              \n(Reference; SLFRS 13 paragraphs 91 and 93)<\/li>\n
            • Failure to consider all taxable temporary differences when recognizing deferred tax
              \nliabilities \u2013 in 42 SBEs including 13 in SME sector
              \n(Reference; LKAS 12 paragraphs 15, 24 and 48 and SME Section 29 paragraph
              \n29.12)<\/li>\n
            • Failure to adequately disclose the relationship between tax expense and accounting
              \nprofit and evidence to support recognition of deferred tax on tax losses \u2013in 34 SBEs
              \nincluding 10 in SME sector
              \n(Reference; LKAS 12 paragraph 81and SME Section 29 paragraph 29.32)<\/li>\n
            • Failure to make adequate disclosure relating to the nature of the related party
              \nrelationships as well as information about the transactions with related parties \u2013 in
              \n48 SBEs including 19 in SME sector
              \n(Reference; LKAS 24 paragraph 18 and SME Section 33 paragraph 33.9)<\/li>\n
            • Failure to make adequate disclosure in relation to the significant accounting policies
              \nwhich comprise of the measurement base and other accounting policies that are
              \nrelevant for an understanding of the financial statements \u2013 in 25 SBEs
              \n(Reference; LKAS 1 paragraphs 15 and 117)<\/li>\n
            • Failure to recognise adequate impairment allowances when objective evidence exist
              \nat the end of each reporting period on impairment of a financial asset or group of
              \nfinancial assets \u2013 in 20 SBEs including 5 in SME sector
              \n(Reference; LKAS 36 paragraph 8 and LKAS 39 paragraphs 58 and 63 and SME
              \nSection 11 paragraph 11.21)\n<\/li>\n
            • Failure to measure the expected credit losses of a financial instrument to reflect the
              \ntime value of money \u2013 in 04 SBEs
              \n(Reference; SLFRS 9 paragraph 5.5.17)<\/li>\n
            • Failure to disclose all relevant information in relation to valuation of property plant
              \nand equipment \u2013 in 20 SBEs including 8 in SME sector
              \n(Reference; LKAS 16 paragraphs 77 and SME Section 17 paragraph 17.33)<\/li>\n<\/ul>","protected":false},"excerpt":{"rendered":"

              Observations made on review of financial statements during 2019 Undertakings obtained to make the required corrections Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) obtained undertakings from two specified business enterprises (SBEs) to make corrections in the financial statements. These undertakings resulted in corrections to net profits\/equity amounting to Rs. 988 million. Types of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-1449","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/slaasmb.gov.lk\/si\/wp-json\/wp\/v2\/pages\/1449","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/slaasmb.gov.lk\/si\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/slaasmb.gov.lk\/si\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/slaasmb.gov.lk\/si\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/slaasmb.gov.lk\/si\/wp-json\/wp\/v2\/comments?post=1449"}],"version-history":[{"count":6,"href":"https:\/\/slaasmb.gov.lk\/si\/wp-json\/wp\/v2\/pages\/1449\/revisions"}],"predecessor-version":[{"id":1782,"href":"https:\/\/slaasmb.gov.lk\/si\/wp-json\/wp\/v2\/pages\/1449\/revisions\/1782"}],"wp:attachment":[{"href":"https:\/\/slaasmb.gov.lk\/si\/wp-json\/wp\/v2\/media?parent=1449"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}