March 14, 2026

Submitted By: Shweta Verma

MINISTRY OF CORPORATE AFFAIRS NOTIFICATION

The Companies (Accounting Standards) Amendment Rules, 2026, modify AS 22 to address the impact of the OECD’s Pillar Two model rules on income taxes. The amendment introduces a mandatory exception—effective immediately and retrospectively—prohibiting enterprises from recognizing or disclosing deferred tax assets and liabilities related to Pillar Two legislation. Instead, companies must disclose the application of this exception and separately report current tax expenses arising from these rules. For periods where the law is enacted but not yet effective, large enterprises must provide qualitative and quantitative information regarding their projected tax exposure, though Small and Medium-sized Companies (SMCs) are exempt from these specific forward-looking disclosure requirements.