The Hindu Business Line : ICAI plans draft on standards for financial tools, derivatives

The Institute of Chartered Accountants of India (ICAI) intends to have two accounting standards on financial instruments and derivatives, a move backed by the central bank.

ICAI, which plans to have an exposure draft ready by June, proposes to deal with such important aspects like recognition, disclosure and presentation of financial instruments and derivatives, said Mr T.N. Manoharan, President.

The plan has RBI's backing as the apex bank expects the institute to expedite it in the context of the huge inflows of investments. Readers of financial statements want information pertaining to such important issues as disclosure and presentation of financial instruments and derivatives.

"At the moment, there is no accounting standard pertaining to these issues in India. However, in the emerging situation, these have assumed great significance. We are also in touch with the capital market regulator SEBI on the matter," the ICAI chief maintained.

Norms for local bodies

The institute, on another front, is also developing accounting standards for local government, especially for municipalities and corporations. The move has found support from the concerned government department as well, it is pointed out.

"A committee formed last year has already finalised a draft preface. We hope that the `Accounting Standards for Local Bodies' will soon start making its mark," Mr Manoharan told newspersons on Saturday.

The ICAI president further referred to the CA (Amendment) Act, 2006, which has stated that a Quality Review Board will take over the function of the existing Peer Review Board. The new board will be able to make recommendations to the council on matters related to the quality of services provided by members.

Brand building

ICAI has mandated NID, Ahmedabad, for designing a logo to indicate the profession, Mr Manoharan said, adding that members will be free to use it on their visiting cards. The new logo, part of the institute's decision to spend roughly Rs 2 crore on a branding exercise, will help create a finer identity, it is expected.

ICAI will initiate a new promotion exercise, aimed at making youngsters aware of the profession. It hopes to reach out to schools to facilitate the programme. The institute has further conducted training programmes for various government officials.

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