IBBI Enhances Framework for Mandatory Disclosure of Carry Forward Losses in Information Memorandum
The Insolvency and Bankruptcy Board of India (IBBI) issued a circular on March 17, 2025, reinforcing amendments to Regulation 36 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The circular mandates all Insolvency Professionals (IPs) to include a specific section in the Information Memorandum (IM) to disclose details of carry- forward losses as per the Income Tax Act, 1961. This follows observations that prior disclosures by IPs lacked robustness.
The dedicated section must highlight, including but not limited to, the following:
- The total quantum of carry forward losses available to the corporate debtor;
- A breakdown of these losses under relevant heads of the Income Tax Act, 1961;
- The time limits for utilizing these losses; and
- A clear statement if no carry-forward losses are available.
This enhanced disclosure framework seeks to equip potential resolution applicants with a clearer understanding of the corporate debtor’s financial health, facilitating better-informed resolution plans. This directive reflects IBBI’s commitment to improving the insolvency resolution process’s transparency and effectiveness.
Published On:
- July 25, 2025
Contributors:
- Abhishek Swaroop
- Shreya Chandhok
- Kirti Talreja
- Rounak Doshi
- Bharath Krishna