Financial Daily from THE HINDU group of publications
Sunday, Apr 25, 2004
Financial Daily from THE HINDU group of publications Sunday, Apr 25, 2004 |
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Corporate
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Accounting Standards Accounting treatment: ICAI mulls disclosure norms K.R. Srivats
New Delhi , April 24 THE Institute of Chartered Accountants of India (ICAI) may soon enhance the responsibilities of its members through better disclosure. Chartered accountants in practice may be required to disclose in their report the divergence, if any, between the accounting treatment spelt out by the institute on a particular issue and the accounting treatment prescribed for it under court sanctioned schemes. Informed sources said that the ICAI is likely to come up with guidelines on this matter and is in the process of drafting the disclosure requirements. The institute, which is the regulator of the chartered accountancy profession, is also taking legal opinion on whether such guidelines and the disclosure format could be issued. Amalgamations and other restructuring exercises are on the rise in corporate India. Sources explained that the schemes sanctioned by the courts for such exercises sometimes prescribe an accounting treatment that is in variance with the one spelt out by the ICAI. "There can be no doubt on the court sanctioned scheme prevailing over the standards of the ICAI. The local law prevails and the accounting treatment mentioned in the court-sanctioned scheme should only be adopted. But the users of financial statements should be made aware that there is a difference, if any, in the accounting treatment adopted in line with the court sanctioned scheme and the norms set out by the ICAI," sources said.
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