29th June 2018

To 
The Secretary, 
Accounting Standards Board,  
The Institute of Chartered Accountants of India,  
ICAI Bhawan, Post Box No. 7100, Indraprastha Marg,  
New Delhi – 110 002

Dear Sir,

	Sub: Comments on Exposure Draft on AS 109 – Financial Instruments 

We are pleased to hear that the Accounting Standards Board of The ICAI has invited comments on Exposure Draft on AS 109, Financial Instruments. We have listed below our comments based on discussion with some experts.  

Para 28 (a) :- It will be good if the Standard provides some guidance on how to apply the requirement on "significant financial difficulties of the issuer". At what stage one can considers that the issuer is facing financial difficulty. Given that this Standard follows Incurred Loss Model (and not, Expected Credit Loss Model), it is all the more important that the Standard given some illustrative guidance. In other words, the Standard should clarify whether any forward looking event needs to be considered for determining whether the 'Issuer if facing any financial difficulty'

Para 30 (b) :- It will be good if the Standard provides guidance on what constitutes 'individually significant'. May be, some kind of bright line or, threshold

We have also sent the hard copy of the same which would be reaching you soon. We hope to continue contributing in all your initiatives for the benefits of members at large.

Thanking you, 

Yours sincerely

CA. Shravan Guduthur
Chairman
Bangalore Branch of SIRC of ICAI
M : +91 9844546161