The Hindu Business Line : ICAI calls for changes in ESOP norms

THE Institute of Chartered Accountants of India (ICAI) wants the Securities and Exchange Board of India to drop all accounting related guidance from the latter's guidelines on employee stock option plans (ESOPs) and employee share purchase plans (ESPPs).

"We are in talks with SEBI and want them to remove those references or paragraphs relating to accounting from their guidelines on ESOPs and ESPPs. The idea is to make sure that all accounting related guidance is at one place," a senior ICAI official told Business Line here.

Following the suggestion of the capital market regulator, the ICAI has already expressed its intent to come up with an accounting standard on employee share based payments. The central council of the institute had cleared a guidance note on `Accounting for Employee Share Based Payments'.

With an accounting standard on employee share based payments on the anvil, indications are that the ICAI may not issue the Guidance Note that had been earlier approved by the council. The Capital Market regulator had in the last week of July 2004 amended its existing guidelines on ESOPs and ESPPs to incorporate some of the recommendations of the SEBI Committee on ESOPs that was chaired by Prof J.R. Varma.

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