Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: VAT RATES :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: VAT Audit :: empanelment :: due date for vat payment :: TDS :: TAX RATES - GOODS TAXABLE @ 4%
 
 
« ICAI »
 Introduction of facility for online submission of requests for issue of duplicate mark sheets/pass certificates.
 ICAI invites suggestions on revised Model GST Law
 Guidance Note on Reports in Company Prospectuses (Revised 2016) issued by the Auditing and Assurance Standards Board
 President's Message - December 2016
 Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 6
 Announcement regarding registration as an Insolvency Professional with the Indian Institute of Insolvency Professionals of ICAI
 CPE Events 28th November - 3th November 2016
 Admit Cards for CPT December 2016 Examination
 Application Form for the Information Systems Audit (ISA) Assessment Test - December, 2016 [Last Date - 7th December, 2016]
  MCA Announcement - To avoid Last Minutes rush please file the Financial Statements and Annual Returns at the earliest.
 CPE Events 21th November - 26th November 2016

Icai proposes upgrades for accounting norms
December, 08th 2011

With the ministry of corporate affairs (MCA) not moving ahead on implementing global accounting standards in India, the countrys apex accounting body is proposing upgrades to existing norms to match the International Financial Reporting Standards (IFRS).

One such change is through an exposure draft on fixed assets. The draft particularly pertains to components, spare parts, moulds, dyes and intangibles such as goodwill and is likely to benefit balance sheets as also the profit and loss accounts of companies working in areas such as mining and oil and gas exploration.

The Institute of Chartered Accountants of India (Icai) has sought comments from the public on the draft by 20 December.

IFRS specialists, however, say the proposed changes are cosmetic and will have little impact on Icais attempt to transit to global standards.

Prime Minister Manmohan Singh committed to adopt IFRS in the Group of Twenty nations (G-20) conference in London in 2009 by 2011. Accordingly, MCA notified 35 accounting standards (Ind-AS) compliant with IFRS along with a road map earlier this year, but has missed its 1 April deadline for their implementation.

MCA cites taxation issues as also passage of the Companies Bill, 2011, for not having begun to implement IFRS. A direct tax code introduced last year in Parliament has to be first enacted.

Amarjit Chopra, former president of Icai. File photo
The institute was getting representation from the industry to improve accounting for some fixed assets used in plant and machinery during their construction period so that they can be capitalized rather than expensed for. This helps the balance sheet look better, said Amarjit Chopra, former president of Icai.
A capitalized item becomes an asset whereas an expensed item is a liability.

Vinayak Pai, a Bangalore-based independent consultant on IFRS and business solutions, said the proposed amendment will not help upgrade existing accounting standards. The opportunity to make such limited amendments should have been utilized to improve accounting practices in the area of revaluation of fixed assets. Today, upward revaluation is a free choice and results in a positive impact on the balance sheet with the P&L (profit and loss account) being insulated from any resultant impact on account of additional depreciation, said Pai. He added this is a deviation from IFRS.

Jamil Khatri, executive director and head of accounting advisory services at audit and consulting firm KPMG in India agrees with Pai. The proposed changes should have been more assertive and things should have been made mandatory as in the case of IFRS as also Ind-AS (notified, but yet to be implemented), said Khatri. Icai has just played around with the grammar where words like may be have been replaced by is. This, in fact, will create more confusion.

Dolphy DSouza, partner, assurance and national leader, IFRS services, at Ernst and Young, however, is less critical.

A recent expert advisory committee?opinion did not allow capitalization?of?enabling assets such as roads and bridges required to construct a factory. The reason provided was that the enabling assets could be used by the public and the company did not have any control on the same, he said. The proposed amendment in AS-10 permits capitalization of such expenditure. This will improve companys balance sheet as well as the P&L.

Rahul Chattopadhyay, partner at Price Waterhouse, a unit of PricewaterhouseCoopers, also said that despite limited amendments there are some good points in the proposed exposure draft: Specifying that items for safety and environmental reasons will qualify for recognition as asset because they allow entities to derive future economic benefits will encourage companies to invest in such items.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions