| Conventional methods of accounting are inadequate to measure a company's development. Finance professionals need to bring in methods for measuring intangibles such as brand value, intellectual property and human resources, in order to reflect the true value of a company, Mr Vayalar Ravi, Union Minister for Overseas Indian Affairs, said.
Mr Ravi was speaking at a seminar organised by the South Asian Federation of Accountants (SAFA). Expressing a similar view, Mr T.N. Manoharan, President, Institute of Chartered Accountants of India, noted that the focus today was on `intangibles'.
He said that SAFA, an apex association of accounting bodies of SAARC countries, is working on a `common accounting standard' and a `common ethical code'. This would ensure easier flow of capital across the SAARC region, said Mr Sunil Goyal, President, SAFA.
In this regard, SAFA plans to formulate a common chartered accountancy curriculum for the SAARC region. SAFA is also undertaking studies on compliance levels of municipal accounts. "We will submit guidelines to help municipalities, blocks and departments of governments to move from the present single entry accounting to accrual based accounting," said Mr Goyal.
In single-entry accounting, only payments and receivables are accounted for while in accrual based accounting liabilities, assets and provisions such as subsidies and budgets for development would also be accounted for.
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