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ICAI exposure draft on accounting standards

Our Bureau

NEW DELHI, May 1

THE Accounting Standards Board of the Institute of Chartered Accountants of India (ICAI) has issued an exposure draft of the proposed accounting standard on `Accounting for investments in associates in consolidated financial statements'.

The objective of this proposed accounting standard is to set out principles and procedures for recognising, in the consolidated financial statements, the effects of investments in associates on the financial position and operating results of a group.

A statement issued by ICAI said that an `associate' has been defined in the exposure draft as an enterprise in which the investor has significant influence and which is neither a subsidiary nor a joint venture of the investor.

The exposure draft also proposes that an investment in an associate should be accounted for in consolidated financial statements under the equity method subject to certain exceptions.

ICAI clears

I-T standard

THE Central Council of the Institute of Chartered Accountants of India (ICAI) has cleared a new accounting standard on `accounting for taxes on income'.

"This accounting standard will be mandatory in nature and will come into effect in respect of accounting periods commencing from April 1, 2001," Mr N.D.Gupta, ICAI President, told Business Line.

The objective of the accounting standard is to prescribe the accounting treatment for taxes on income. Taxes on income are one of the significant items in a statement of profit and loss of an enterprise.

Mr Gupta also said that the Council, which met during April 27-30, has finalised a guidance note on `Corporate Governance'.

"The listing agreement with the stock exchanges requires chartered accountants to certify compliance of corporate governance practices. We have now finalised a guidance note for our members in this regard", he said.