{"id":1781,"date":"2022-05-31T07:09:24","date_gmt":"2022-05-31T07:09:24","guid":{"rendered":"http:\/\/slaasmb.gov.lk\/?page_id=1781"},"modified":"2022-05-31T07:19:15","modified_gmt":"2022-05-31T07:19:15","slug":"observations-in-2018","status":"publish","type":"page","link":"https:\/\/slaasmb.gov.lk\/ta\/observations-in-2018\/","title":{"rendered":"Observations in 2018"},"content":{"rendered":"\n

Observations made on review of financial statements during 2018<\/h1>\n
    \n

  1. Undertakings obtained to make the required corrections<\/h4>\n

    Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) obtained\nundertakings from five specified business enterprises (SBEs) to make corrections in the\nfinancial statements. These undertakings resulted in corrections to net profits\/equity\namounting to Rs. 1.1 billion.<\/p>\n

    Further, a direction was issued to a Licensed Commercial Bank to make certain\nadjustments with the implementation of SLFRS 9 and to disclose the said fact in the\ninterim financial statements with the object of presenting a true and fair view. <\/p>\n

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

      \n
    • Failure to make adequate allowances for impairment of the investment in associate\nwhen impairment indicators exist (Reference; LKAS 36 paragraph 8 and)<\/li>\n
    • Failure to make adequate allowances for impairment of financial assets when\nimpairment indicators exist (Reference; LKAS 39 paragraphs 59 and 63)<\/li>\n
    • Incorrect recognition of income tax liability and corresponding deferred tax asset\nin relation to loans written off which had been fully claimed when recognizing\ndeferred tax liabilities (Reference; LKAS 12 paragraph 5 and LKAS 37 paragraph\n10)<\/li>\n
    • Failure to recognise biological assets and measure at fair value. (Reference; LKAS\n41 paragraph 12)<\/li>\n
    • Failure to measure investment properties at fair values by considering\nrestrictions\/characteristics specific to such investment properties (Reference;\nLKAS 40 paragraph 40)<\/li>\n<\/ul>\n<\/li>\n

    • Letters of Assistance <\/h4>\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\nthe Specified Business Enterprises (SBEs), by letter, without extensive inquiries, so that\nthe SBEs could, where necessary, take corrective action on their own. Such letters not\nbeing directions issued by SLAASMB, are intended to be letters of assistance.<\/p>\n

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

        \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 61 SBEs\n(Reference; SLFRS 13 paragraphs 91 and 93)<\/li>\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 29 SBEs\n(Reference; SLFRS 7 paragraphs 31, 36 and 37)<\/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 23 SBEs\n(Reference; LKAS 36 paragraph 8 and LKAS 39 paragraphs 58 and 63)<\/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\n21 SBEs\n(Reference; LKAS 24 paragraph 18)<\/li>\n
      • Failure to consider all taxable temporary differences when recognizing deferred tax\nliabilities \u2013 in 18 SBEs\n(Reference; LKAS 12 paragraphs 15 and 24)<\/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 16 SBEs\n(Reference; LKAS 1 paragraph 117)<\/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 \u2013 in 15\nSBEs\n(Reference; LKAS 12 paragraph 81)<\/li>\n
      • Failure to make adequate disclosure on the effects of changes in the assumptions\nused to measure insurance assets and liabilities, that had a material effect on the\nfinancial statements \u2013 in 11 SBEs\n(Reference; SLFRS 4 paragraphs 37)<\/li>\n
      • Failure to perform regular revaluations when the fair values of revalued assets differ\nmaterially from the carrying amounts \u2013 in 8 SBEs\n(Reference; LKAS 16 paragraphs 31 and 34)<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

        Observations made on review of financial statements during 2018 Undertakings obtained to make the required corrections Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) obtained undertakings from five specified business enterprises (SBEs) to make corrections in the financial statements. These undertakings resulted in corrections to net profits\/equity amounting to Rs. 1.1 billion. Further, a […]<\/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-1781","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/slaasmb.gov.lk\/ta\/wp-json\/wp\/v2\/pages\/1781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/slaasmb.gov.lk\/ta\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/slaasmb.gov.lk\/ta\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/slaasmb.gov.lk\/ta\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/slaasmb.gov.lk\/ta\/wp-json\/wp\/v2\/comments?post=1781"}],"version-history":[{"count":9,"href":"https:\/\/slaasmb.gov.lk\/ta\/wp-json\/wp\/v2\/pages\/1781\/revisions"}],"predecessor-version":[{"id":1791,"href":"https:\/\/slaasmb.gov.lk\/ta\/wp-json\/wp\/v2\/pages\/1781\/revisions\/1791"}],"wp:attachment":[{"href":"https:\/\/slaasmb.gov.lk\/ta\/wp-json\/wp\/v2\/media?parent=1781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}