Page 169 - IC46 addendum

Indian Accounting Standards

only changes in market prices for
such assets (a financial variable) but
also the condition of the specific
asset held (a non-financial variable).

However, if the contract
compensates the beneficiary only for
changes in market prices and not
for changes in the condition of the
beneficiary’s asset, the contract is
a derivative and within the scope of
Ind AS 39.

Residual value guarantees given by
a lessee under a finance lease are
within the scope of Ind AS 17
Leases.

1.16 Product warranties issued Insurance contracts, but excluded

directly by a manufacturer, from the scope of this Standard (see

dealer or retailer. Ind AS 18 Revenue and Ind AS 37).

1.17 Product warranties issued Insurance contracts, no scope

by a third party. exclusion. Same treatment as other

insurance contracts.

1.18 Group insurance contract Insurance risk is insignificant.
that gives the insurer an Therefore, the contract is a financial
enforceable and non- instrument within the scope of Ind
cancellable contractual right AS 39. Servicing fees are within the
to recover all claims paid scope of Ind AS 18 (recognise as
out of future premiums, with services are provided, subject to
appropriate compensation various conditions).
for the time value of money.

1.19 Catastrophe bond: bond in Financial instrument with embedded
which principal, interest derivative. Both the holder and the
payments or both are reduced issuer measure the embedded
if a specified triggering event derivative at fair value.
occurs and the triggering
event does not include a
condition that the issuer of
the bond suffered a loss.

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