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If you thought Indian policymakers’ had given a go by to ‘fair value’ accounting in the wake of the global financial crisis, then think again.
The revamped National Advisory Committee on Accounting Standards (NACAS) will consider for final approval the accounting standard Ind AS 113 on October 20, which was cleared and recommended by the CA Institute few years back.
“We will take up the accounting standard on fair value accounting at our next meeting in Delhi on October 20”, Amarjit Chopra, Chairman of NACAS, told Business Line here on Sunday
The first meeting of the revamped NACAS took place in the capital on Saturday.
Besides giving its nod for some accounting standards, the advisory panel also discussed the "definition" differences between the new company law and the
Fair value is basically an alternative approach to measurement that seeks to capture changes in asset and liability values over time.
The result of this approach is a balance sheet that better reflects the current value of assets and liabilities.
Fair value accounting is most frequently applied to financial assets (equities, bonds, commodities) and liabilities as market prices are most likely to be available for such elements.
The Ind AS 113—which corresponds to IFRS 13-- is important as it explains how to measure “fair value” in situations spelt out by other accounting standard requiring such a methodology.
This accounting standard is all about the ‘how to measure’ and does not get into aspects such as when and where it should be done, said a senior official in the CA Institute.
NACAS WORK
Chopra also said that NACAS was working towards clearing several accounting standards recommended by the CA Institute post 2011.
He expressed confidence that the pending work will be completed within the December deadline specified by the new Modi-led Government.
srivats.kr@thehindu.co.in.
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