Press Trust of India / New Delhi May 28, 2009, 16:47 IST
Corporatisation of agriculture and vast income potential of commercial crops have attracted the attention of accounting regulator ICAI, which for the first time is evolving accounting norms for the sector.
"So far, there are no rules and standards for the agriculture sector. How do you value tea and coffee crops or other commercial crops? We are thinking to frame some standards for the agriculture sector," ICAI Vice-President Amarjit Chopra told PTI.
Globally, there are accounting standards for the farm sector but this is not so in India, where agricultural income is exempted from income tax.
Chopra said the producers don't know how to value floriculture, horticulture, plantation crops like tea, coffee, rubber etc and hence the sector remains untapped.
The accounting norms become important more so when India is largely an agrarian economy, he added.
The International Accounting Standards prescribes the accounting treatment for agriculture, which includes biological transformation of living animals or plants for sale into agricultural produce or additional biological assets.
However, in India there is no accounting norm on biological assets and agricultural produce.
To The Editor,
Please desist from describing ICAI as Accounting regulator. ICAI regulates only Chartered Accountancy regulation for financial audits. Moreover, it can only frame Accounting Standards which need to be approved by NACAS and on these lines, you cannot come to conclude that ICAI is an accounting regualator. Moreover, there is another Statutory institute established by Indian Parliament - namely ICWAI - which regulates Cost accountancy profession and also issues COST ACCOUNTING STANDARDS. Therefore, please desist from desribing ICAI as Accounting regulator in your future columns - which gives a misleading direction that only ICAI regulates Accounting profession in India which totally ignores the fact that ICAI regulates only financial accounting WHEREAS it has no jurisidiction in cost accounting.
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