On September 30, 2025, the National Financial Reporting Authority (NFRA) released the Auditor-Audit Committee Interactions Series 4 titled: Audit of Accounting Estimates and Judgments-Impairment of Non-financial Assets- Ind AS 36, SA 540 etc. This series aims to strengthen communication between auditors and audit committees, enhance audit quality, and safeguard investor protection. The NFRA's enforcement, review, and monitoring activities have highlighted the importance of auditor communication with those charged with Governance (TCWG), including Audit Committees. The NFRA issues the series to address significant areas of accounting and auditing, focusing on the audit of impairment of non-financial assets as required by Ind AS 36, Impairment of Assets, and SA 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures. The series is available at https://nfra.gov.in/nfra-auditor-audit-committee-interaction-series-4-audit-of-accounting-estimates-and-judgements-impairment-of-non-financial-assets-ind-as-36-sa-540/. The release ID is 2173326.
Key Entities Referenced
National Financial Reporting Authority (NFRA): The primary regulator responsible for the regulation and supervision of auditors and the auditing profession in India.
Auditor-Audit Committee Interaction Series 4: A series of communications issued by the NFRA focusing on key aspects of accounting and auditing to enhance communication between auditors and audit committees.
Ind AS 36: Indian Accounting Standard 36 relating to the impairment of assets.
SA 540: Standard on Auditing (SA) 540 focusing on the audit of accounting estimates, including fair value accounting estimates, and related disclosures.
Companies Act 2013 (CA 2013): Indian law that regulates Indian companies, and makes stipulations on the role of statutory auditors.
National Financial Reporting Authority
NFRA releases Auditor-Audit Committee Interaction
Series 4 titled: Audit of Accounting Estimates and
Judgments-Impairment of Non-financial Assets
Initiative Strengthens Communication between
Auditors and Audit Committees to Enhance Audit
Quality; Protects Public Interest and Safeguards
Investor Protection
Posted On: 30 SEP 2025 8:07PM by PIB Delhi
The National Financial Reporting Authority (NFRA) has released the Auditor-Audit Committee Interactions
Series 4, titled: Audit of Accounting Estimates and Judgements-Impairment of Non-financial Assets- Ind AS
36, SA 540 etc.
In the course of NFRA’s enforcement, review and monitoring activities, the auditor’s communication with
those charged with Governance (TCWG) (including the Audit Committees) has been highlighted. A need has
been felt through these activities towards reinforcing the ways and means of communication between the
Statutory Auditors and the Audit Committees in particular drawing upon the requirements in the Companies
Act 2013 (CA 2013), the two relevant Standards on Auditing (SA 260 (R) and 265), other related SAs and the
Standard on Quality Control (SQC).
NFRA has obligations to suggest measures for improvement in overall audit quality and to promote awareness
and significance of accounting- auditing standards, auditor’s responsibilities and audit quality. Therefore
keeping in view NFRA’s objectives of protecting public interest and investor protection, NFRA continues
with its series of Auditor-Audit Committee Interactions, which are being issued on significant areas of
accounting and auditing, from time to time.
This Auditor-Audit Committee Interactions Series 4 draws the attention of the auditors to the potential
questions the Audit Committees/Board of Directors may ask them in respect of impairment of non-financial
assets. Within that, this communication includes aspects pertaining to the audit of impairment of non-financial
assets as required by Ind AS 36, Impairment of Assets and SA 540, Auditing Accounting Estimates, Including
Fair Value Accounting Estimates, and Related Disclosures.
Link of the series: https://nfra.gov.in/nfra-auditor-audit-committee-interaction-series-4-audit-of-accounting-
estimates-and-judgements-impairment-of-non-financial-assets-ind-as-36-sa-540/
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NB/AD
(Release ID: 2173326)