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: due date for vat payment :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: list of goods taxed at 4% :: VAT RATES :: articles on VAT and GST in India :: VAT Audit :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: Central Excise rule to resale the machines to a new company :: empanelment :: ACCOUNTING STANDARDS
 
 
« News Headlines »
 How to link your Aadhaar and PAN details to file income-tax returns
 How to calculate capital gains tax on property sold at less than stamp value?
 Return Filing - Under GST, this is how you will file tax returns from July 1
 Income tax filing FAQs part 1
 Filing Income Tax Returns? Things To Keep In Mind As Deadline Approaches
 Filing of online return for 4th quarter of 2016-17- extension of period thereof.
 New tax accounting standards may reduce leeway for infrastructure companies
 GST – CONCEPT & STATUS – As on 01st May, 2017
 Govt extends VAT deadline, relief for developers
 Income Tax Appellate Tribunal Rules, 2017
 Got your Form 16? You should file income tax returns early to enjoy benefits

ICAI removes doubts on accounting for foreign currency derivatives
April, 01st 2008
The Institute of Chartered Accountants of India (ICAI) on Monday made it clear that its recent announcement on accounting for foreign currency derivative exposures was not a new accounting norm to be adhered to by March 31 this year, but was a clarificatory one to highlight the best practices that could be followed by companies.

What we have said (late on Saturday) is not a new accounting norm. We have only clarified the position as on date and spelt out the accounting principles that could be adopted. We had to do this as doubts were raised in view of the Accounting Standard (AS-30) issued by us becoming recommendatory from April 1, 2009 and mandatory from April 1, 2011, Mr Ved Jain, ICAI President, said in a press conference.

Mr Jain said that ICAI has no plans to bring forward to an earlier date the implementation of AS-30 in view of the currency derivative exposures of certain companies and the possibility of such exposures translating into heavy losses due to fluctuations in the foreign currency rates.

On the clarificatory announcement, Mr Jain said that certain issues were raised with regard to the foreign currency derivative exposures of various corporates that were not being fully accounted for.

As earlier adoption of standard is always encouraged, the ICAI council has now said that the entities could follow the AS-30, Financial Instruments: Recognition and Measurement, which contains accounting for derivatives.

The significance of AS-30 is that the standard is fair-value based and requires recognition of losses or gains arising from outstanding derivative contracts at balance sheet date on fair value basis, say experts.

However, if an entity does not opt for AS-30, Mr Jain said that it does not mean that one should not follow the already spelt out accounting standards. Therefore, we have said that if an entity does not opt for AS-30, it should keep in view the principle of prudence as enunciated in AS-1 Disclosure of accounting policies and provide for losses in respect of all outstanding derivative contracts at the balance sheet by making them to market, Mr Jain said.

Under the principle of prudence, unrealised gains are not recognised. But all losses have to be provided for.

In its clarificatory announcement, the ICAI has said that the entity needs to disclose the policy followed by it for accounting for derivatives in its financial statements.

In case AS-30 is followed by the entity, a disclosure of the amounts recognised in the financial statements should be made. In case AS-30 is not followed, the losses provided for should be separately disclosed by the entity.

The institute has also said that the auditors should consider making appropriate disclosures in their reports if the spelt out accounting treatment and disclosures are not made.

For forward contracts, the ICAI has said that the entity needs to fully comply with the requirement of AS-11 and the clarificatory announcement made on Saturday would not be applicable to such contracts.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Sitemap

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