New ICAI norms for financial instruments soon

The Institute of Chartered Accountants of India (ICAI) is in the final stage of formulating the accounting standard for financial instruments in India.

ICAI President T N Manoharan said the draft of the accounting standard would be released by September for consultation with different stakeholders.

"The draft will be released by September for consultation. It will be finalised within December. The accounting standard for financial instruments will also include derivative products," Manoharan said.

ICAI was taking into consideration views of the Reserve Bank of India while finalising the accounting standard, he added.

Meanwhile, the institute has also initiated its work for framing the accounting standard in agricultural income. "We have just started working on the accounting standard in agricultural income. It is in the initial stage," Manoharan said.

On the other hand, ICAI is in the final stage of submitting the roadmap for implementing 'accrual system of accounting' in government accounts.

ICAI President further said, "Government of India adopts 'cash system of accounting' which is based on actual receipts and payments. We are in the process of formulating the roadmap for implementing 'accrual-based system of accounting."

The work is being carried out by ICAI in a sub-committee under Government Accounting Standards Advisory Board (GASAB).

"We have had two meetings with GASAB. The roadmap will be prepared by this month-end," he said.

ICAI has also been assigned to prepare performance model for the ministry of human resource development, for its two major projects "� Sarva Siksha Abhiyan and mid-day meal scheme.

"ICAI is preparing performance model to ensure optimal usage of funds. The basic model can be adopted for other welfare project of HRD ministry," Manoharan said.

At the same time, the committee of internal audit of ICAI is working on formulating a standard for internal audits.

"Currently, internal audit can be done by anyone. We are in the process of framing a standard for internal audit. ICAI is also working to formulate a standard for system audits," he said.

Manoharan also informed that the Central Board of Direct Taxes would now be discussing with ICAI before publishing any forms or circulars.