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: cpt :: Central Excise rule to resale the machines to a new company :: VAT RATES :: ACCOUNTING STANDARD :: empanelment :: list of goods taxed at 4% :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: form 3cd :: due date for vat payment :: articles on VAT and GST in India :: ACCOUNTING STANDARDS
 
 
Latest Circulars »
 Recording of Details of Transactions in Passbook/ Statement of Account
 Exclusion of “The Royal Bank of Scotland N.V.” from the Second Schedule to the Reserve Bank of India Act, 1934
 Monitoring of Foreign Investment under PIS in Indian Companies- Removal from Ban List - FIIs/RPIs : M/s IDFC Limited
 FIIs/FPIs can now invest 24 to 49 per cent under PIS in M/s Satin Creditcare Network Limited
  Bankers & SME Borrowers: The Emerging Mantras (Shri S. S. Mundra, Deputy Governor – June 16, 2017 – at the 3rd Bankers Borrowers Business Summit organized by ASSOCHAM in New Delhi1)
 RBI extends Directions issued to Navodaya Urban Co-operative Bank Ltd, Nagpur, Maharashtra
 Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2016-17
 Bankers & SME Borrowers: The Emerging Mantras (Shri S. S. Mundra, Deputy Governor – June 16, 2017 – at the 3rd Bankers Borrowers Business Summit organized by ASSOCHAM in New Delhi1)
 RBI-Formation of a new district in the State of West Bengal - Assignment of Lead Bank Responsibility
 RBI-Period for Submission of Agency Commission Claims
  Master Direction - Information Technology Framework for the NBFC Sector

Rbi-Uniform Accounting Standards at ARCs
April, 25th 2014

RBI/2013-14/571
DNBS (PD) CC. No. 38/SCRC/26.03.001/2013-14

April 23, 2014

The Chairman/Managing Director/Chief Executive Officer
All registered Securitisation Companies/Reconstruction Companies

Dear Sir,

Uniform Accounting Standards at ARCs

Please refer to "The Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003" dated April 23, 2003 (herein after called Guidelines).

2. Pursuant to the recommendations of the Key Advisory Group (KAG) constituted by the Government of India on the Asset Reconstruction Companies (ARCs), Reserve Bank of India advises the guidelines on uniform accounting standard for ARCs as under:

a. Acquisition cost (Pre and post acquisition)

Expenses incurred at pre acquisition stage for performing due diligence etc. for acquiring financial assets from banks/ Fls should be expensed immediately by recognizing the same in the statement of profit and loss for the period in which such costs are incurred.

Expenses incurred after acquisition of assets on the formation of the trusts, stamp duty, registration, etc. which are recoverable from the trusts, should be reversed, if these expenses are not realised within 180 days from the planning period [In terms of RBI Notification No.DNBS.2/CGM(CSM)-2003, dated April 23, 2003 planning period means a period not exceeding twelve months allowed for formulating a plan for realization of non­performing assets (in the books of originator) acquired for the purpose of reconstruction] or downgrading of Security receipts (SRs) (i.e. Net Asset Value(NAV) is less than 50% of the face value of SRs ) whichever is earlier.

b.  Revenue Recognition-

(i) Yield should be recognised only after the full redemption of the entire principal amount of Security Receipts.

(ii) Upside income should be recognized only after full redemption of Security Receipts.

(iii) Management fees may be recognized on accrual basis. Management fees recognized during the planning period must be realized within 180 days from the date of expiry of the planning period. Management fees recognized after the planning period should be realized within 180 days from the date of recognition. Unrealised Management fees should be reversed thereafter. Further any unrealized Management fees will be reversed if before the prescribed time for realisation, NAV of the SRs fall below 50% of face value. [In terms of RBI Notification No.DNBS.2/CGM(CSM)-2003, dated April 23, 2003 planning period means a period not exceeding twelve months allowed for formulating a plan for realization of non-performing assets (in the books of originator) acquired for the purpose of reconstruction.]

c. Valuation of Security Receipts (SRs)

Considering nature of investment in SRs where underlying cash flows are dependent on realization from non performing assets, it can be classified as available for sale. Hence investments in SRs may be aggregated for the purpose of arriving at net depreciation/ appreciation of investments under the category. Net depreciation, if any shall be provided for. Net Appreciation, if any should be ignored. Net depreciation required to be provided for should not be reduced on account of net appreciation.

d. Applicability of 'Operating Cycle Concept' under Schedule VI

SC/ RCs are advised in their balance sheet to classify all the liabilities due within one year as "current liabilities" and assets maturing within one year along with cash and bank balances as "current assets". Capital and Reserves will be treated as liabilities on liability side while investment in SRs and Long term deposits with banks will be treated as fixed assets on the assets side.

3. The accounting guidelines will be effective from the accounting year 2014-15.

Yours sincerely,

(N. S. Vishwanathan)
Principal Chief General Manager

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Integrated Software Solutions Integrated Software Development Integrated Software Services Integrated Software Solutions India Integrated Softw

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