Letters: Accounting for change

This refers to the article “How to reform hedge accounting” (July 20). India today does not have a formalised accounting framework for financial instruments, leave alone hedge accounting. The accounting standards for financial instruments are optional and not legally enforceable under the Companies Act. Disparate accounting practices have emerged among corporations in accounting for foreign currency liabilities, including foreign currency convertible bonds (FCCBs). Concerns have been rightly raised about the powers of the Institute of Chartered Accountants of India to deal with accounting offences committed by its members and its ability to assume a leadership role in driving accounting reforms. Therefore, the proposal to set up a National Financial Reporting Authority to speed up accounting reforms and improve quality of service provided by accounting professionals is a welcome step.

 

Vinayak Pai V Bangalore

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