Corporates are now breathing easy with the government deferring compliance with provisioning in their balance sheets of forex losses and gains on mark-to-market basis till 2011, but partnership firms are not as fortunate as they have to abide by this norm.
According to accounting regulator Institute of Chartered Accountants of India (ICAI), the breather granted in form of postponing implementation of the Accounting Standard 11 (AS 11) will not be applicable to non-corporate bodies like partnership firms as per the notification issued by the government.Online GST Certification Course by TaxGuru & MSME- Click here to Join
“They (non-corporate assessees) will continue showing losses (or gains as may the case) as per the AS 11,” ICAI President Uttam Prakash Agarwal said here.
As per the norms, companies have to mandatorily provide for forex losses and gains on the basis of prevailing market value of their financial assets as per the AS 11.
However, the government has postponed the compliance for the corporates with retrospective effect from December 7, 2006, till 2011.
Companies will have an option to show the forex loss or gain as per AS 11 or Schedule VI of the Companies Act.
In 2011, the country has to converge with the international reporting norms, according to which the companies will have to compulsorily report mark-to-market losses and gains.