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Govt may defer implementation of accounting standard-11

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Source : The Hindu Date : 29.03.2009

Govt may defer implementation of accounting standard-11

Relief for cos as forex losses would dent profit.

 


ICAI members argue that “companies were taking the forex fluctuations to the profit and loss account when they were making profits, but now that they are making losses, they don’t want to take it to profit and loss account.”


Richa Mishra
K.R. Srivats

New Delhi, March 27 The Ministry for Corporate Affairs (MCA) may defer the implementation of the accounting standard (AS-11) that deals with foreign exchange differences. This would come as a respite for corporate India, which has been hit by the recent rapid depreciation of the rupee against the US dollar.

Simply put, companies may not be required to take their losses arising from exchange differences to their profit and loss account for the accounting period ended March 31, 2009.

The likely deferment on the application of the AS-11 by the Government follows a recommendation made by National Advisory Committee on Accounting Standard (NACAS) at its meeting on Wednesday.

NACAS, which was constituted to advise the Government on formulation of accounting standards to be followed by corporate entities, has suggested deferring the implementation of AS-11 to 2011.

Amendments suggested

Official sources told Business Line that “historically, the Ministry has not gone against NACAS recommendations. However, the Ministry was yet to take a final view.”

“While proposing a postponement NACAS has also suggested certain amendments in AS 11,” official sources said, while declining to disclose the exact changes proposed.

Cos don’t comply

AS-11 deals with mark-to-market provisioning in corporate profit and loss accounts for foreign exchange-related gains and losses. However, despite the Institute of Chartered Accountants of India (ICAI) notifying the norm, several big companies were not following it and instead were complying with Schedule VI of the Companies Act.

Placing of losses

The Companies Act stipulates that as a result of exchange rate fluctuation, any change in the repayment liability needed to be added or deducted from the cost of fixed assets and allows such losses to be capitalised.

In order to put to rest the controversy, the Ministry had referred the matter to NACAS. “While deferring the implementation of AS-11, NACAS has suggested some transitional arrangement should be made for the shift from Schedule VI to AS-11,” sources said.

ICAI, on the other hand, has been opposing any deferment. Members of the Institute argued that “companies were taking the forex fluctuations to the profit and loss account when they were making profits, but now that they are making losses, they don’t want to take it to profit and loss account.” Further, the Institute’s council was also yet to take a view on AS-11, even as it claimed that the majority of its council members were not in favour of deferment.

Last Updated on Wednesday, 03 June 2009 08:03
 

UK can offer sustainable model for water supply

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Source : The Business Line Date : 17.02.2009

‘UK can offer sustainable model for water supply’

Our Bureau

Chennai, Feb. 16 The Indian public sector water utilities need to move towards private sector participation to ensure quality in water supply and sewage disposal service, according to the British Water Mission to India, a delegation looking at partnerships with Indian companies in water-related infrastructure.

Water management companies in the UK have over two decades of experience in handling water utilities that have been in private hands. Even if not privatising, public sector utilities need to move towards a sustainable system that would involve levying viable tariffs and heavy capital investments to ensure quality supply and to cope with growing demand for water and sewage disposal, the members said.

Addressing a seminar on India and UK developing water sector partnership, Mr Peter Jarema, Director, Farrer Consulting Ltd, a member of the water mission, said issues in the Indian water sector involved intermittent supply, leakage, inefficient zoning, lack of metering, unviable tariffs that barely cover operation and maintenance, and poor service to the consumer. Absence of capital investments to improve service only leads to deterioration and further drop in quality.

UK water companies have been involved in water utility services ever since privatisation happened over two decades ago.

Last Updated on Wednesday, 03 June 2009 12:05
 

MCC Plans Property Tax Payment online

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Source : The Business Line Date : 09.02.2009

MCC plans property tax payment online

Our Bureau

Mangalore, Feb. 8

The Mangalore City Corporation (MCC) is planning to introduce online payment of property tax from the next financial year.

Speaking at a public awareness programme on self-assessment scheme (SAS) of property tax – jointly organised by the Kanara Chamber of Commerce and Industry (KCCI) and the Mangalore branch of the Southern India Regional Council of Institute of Chartered Accountants of India (ICAI) – here on Friday evening, Mr Sameer Shukla, Commissioner of MCC, said that the corporation is planning to introduce online payment of property tax, probably from the next financial year.

The new system will be equipped with online calculator for the calculation of property tax under the SAS. Plans are also there to introduce payment of property tax through credit cards, he said.

Stating that SAS of property tax has been introduced on the basis of capital value scheme (CVS), Mr Shukla said it is the most scientific method of calculating property tax. The earlier system of fixation of property tax on the basis of annual ratable value had several discrepancies.

When the participants in the programme told him that the SAS forms are in Kannada and it would be difficult for non-Kannadigas, he said these forms would be made bilingual from the next financial year. Plans are also afoot to introduce worked-out examples in the SAS brochures, so that it will help the tax-payers while calculating their property tax, he added.

Mr Praveen Kumar Shetty, chartered accountant from Mangalore, made a presentation on the valuation procedures in SAS. Mr Srinivasa S. Kamath, President of KCCI, welcomed the gathering

Last Updated on Wednesday, 03 June 2009 07:35
 


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