The sunday excel tip - how to remove #NA and #Div

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Many a times i have had this irritation that i didnt put an iserror forumla and prevented those little error symbols (#DIV/0! or #N/A) when i urgently printed out forecast statements. Even though I know they are harmless, I don’t want to have to explain them to a client/boss.

I was wondering if there was a way  I keep them off my printed sheets without having to go through the trouble of rewriting those unimportant formulas to eliminate them or using iserror on simple excel sheets...

Here's how you can ensure these do not happen, these formulaes  print because Excel is defaulted to print them, but you can change the default easily. In Excel 2003, click on File, Page Setup and then on the Sheet tab (see screenshot below). In Excel 2007, display the Page Layout tab of the ribbon and then click the small icon at the lower-right of the Page Setup group to display this dialog box.

When you go to the dropdown list next to Cell errors as, notice you have several choices:displayed prints the error values as shown in the worksheet;  hides the error values; - - replaces the error value with two dashes; and #N/A replaces all error values with #N/A.

All you need to do is, save your page set up on the excel sheet which you print and voila, errors don't get printed

If you have any questions on excel or want to know any shortcuts, do email them to us and we will revert back to you.

 

Matrix accounting -- Bond conversions weigh down on EPS

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With the change of an old accounting rule of APB 14-1 "Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion" coming into effect this quarter, companies may start seeing a dip in the EPS reported. The rule which was amended last year, requires companies which settle their bonds (liabilities) in the form of part equity and part cash, now will have to take an additional charge to the income statement on account of interest expense, thereby lowering the EPS

The interest expense will be the differential between the value of the equity shares as on the date of the conversion and the maturity value of the debt.

This rule does not affect straight convertible debt that must be settled with the corporate issuer's stock, convertible preferred shares classified as equity, convertible debt with embedded options that are recorded as derivatives, and convertible bonds that require cash settlement for fractional shares when converted.

Separating the settlement into cash and shares requires the use of so-called split accounting to record the transaction. That is, the issuer must book the debt and equity components of the bond separately. It's the split that results in a higher interest expense on the income statement that tugs the EPS ratio down. Here's why.

A convertible bond is attractive to issuers because the interest paid to bondholders is lower than the market rate for most other borrowing. On the other hand, the low-interest bond attracts investors because of the conversion option, which allows the bondholder to turn the debt into equity if market conditions are favorable. For many, convertible bonds were seen as a win-win situation.

But FASB wanted to make sure that companies issuing convertible debt reflected the economic reality of the instrument — that is, the risk associated with the bond — on their financial statements. In the board's opinion, companies that issued convertible bonds had a tendency to inflate their EPS because the interest expense associated with the potential cash payout was under-reported.

The new rule, however, forces companies to record a higher interest expense — or a higher depreciation expense in the case of debt used for capital improvements — because the debt is calculated as if there were no conversion option, and will be settled in cash. That assumed cash payout includes the additional interest expense.

FASB also is requiring that the rule be applied retrospectively to 2008 financial statements. That means that if issuing companies report a material adjustment to their income statement, they must restate their financial results accordingly, going back two or three years, depending on how many years of comparison reporting they included in their 2008 filings.

SPECIAL COMMUNICATION TO MEMBERS ON SATYAM ISSUE

My dear professional colleagues,

This is my first communication from me to you all, after having taken over the reigns of the Institute yesterday as the 57th President of the Institute.

Through this communication of mine, I would like to touch upon the most burning issue which has confronted our profession ever since the disgraced Chairman of Satyam Computer Services Limited, Mr. B. Ramalinga Raju, made shocking revelations of serious irregularities and mis-statements in the balance sheets of the Company for the past several years. The fact as to whether the auditors were innocent, or whether they were negligent or in the worst case scenario, whether they were hand in glove with the Chairman in falsifying the accounts, will no doubt come out of the investigations/probe being done by several agencies, including the disciplinary mechanism of the Institute, but the fact remains that the profession has received a severe beating.

In that scenario, I feel it is important to bring to the notice of our members as to the consequent steps that their Institute has taken in the matter. Hence this communication.

1. The Director (Discipline) of the Institute took immediate cognizance of the matter and has issued show-cause notices to the auditors, viz. M/s Price Waterhouse, Bangalore, M/s Price Waterhouse, Kolkata and M/s Price Waterhouse, New Delhi vide letters respectively dated 10th January, 2009, 14th January, 2009 and 14th January, 2009.

2. Show-cause notices dated 14th January, 2009 have also been issued to Shri Vadlamani Srinivasu, ex-CFO and to Shri V.S. Prabhakara Gupta, ex-Sr. Vice President (Internal Audit), of the company.

3. Communications have been sent to the following authorities/agencies seeking relevant documents/details in their possession, for the purpose of examination:

(a) Ministry of Corporate Affairs
(b) Securities and Exchange Board of India
(c) Registrar of Companies, Hyderabad
(d) Shri Ram Mynampati, the then interim CEO of the company
(e) M/s Ernst & Young Pvt. Ltd., Secunderabad
(f) Shri Deepak Parekh, newly appointed Director of the company.

4. The Financial Reporting Review Board of the Institute, which has been constituted by the Council of the Institute about five years back, for review of General Purpose Financial Statements of enterprises and auditor's report thereon, with a view to improve financial reporting practices in the country, has commenced the task of review of financial statement of the company for the last five years. The Board has the mandate of the Council to be on the fast track mode.

5. The Council of the Institute met on 12th & 13th January, 2009 at New Delhi and took the following further decisions:

(a) To place in public domain by hosting on the website, the following:

(i) Details of members found guilty of severe/major offences, for which a punishment of removal of name from Register of Members for a period of five years and above has been awarded/recommended.

(ii) Information regarding firms with which such tainted Chartered Accountants are associated as on the date of occurrence of misconduct.

(b) To communicate the details at (i) and (ii) above to the regulatory authorities such as C&AG, RBI, SEBI, IRDA etc. and also to any authority/entity/public who wish to make use of the same, before engagement of any CA/firms.

(c) To constitute a High Powered Committee headed by the then Vice President to examine the entire gamut of Satyam fiasco in relation to accounting and auditing aspects including financial reporting requirements, helping/co-ordination with investigation being carried out by various agencies, going into the roots of the problem, identification of the root crisis, effectiveness of the system in place, systemic issues, and to suggest changes, wherever required, for the purpose of making appropriate recommendations to the Government, SEBI and other regulators. The seven-member Committee, which comprises of one member from each of the five Regions and two Government nominees, has already commenced its task.

It has held two meetings whereat it has crystallized its road map and also met the concerned regulators/key personnel in Ministry of Corporate affairs, Office of C&AG, Finance Ministry, SEBI, CRISIL, DSP Merrill Lynch, besides a Board Member of Satyam. Meanwhile, the Committee has received a number of suggestions from Honble members on the possible way forward for the Institute on the entire matter, which is being taken into consideration by the Committee.

The Institute is speedily working in the matter and would be submitting its report to the Council, whereafter the contents of the same would be brought into public domain. We are sanguine of repairing the damage caused to our profession by this incident, which we believe is only an aberration.

In this effort of ours, we draw strength from the support of our members.

Professionally yours

CA. UTTAM PRAKASH AGARWAL
President
Date: 6th February, 2009.

Mutual Recognition Agreement (MRA) with CPA Australia Ltd.

MOU with CPA Australia recognizing each others qualification

The Institute of Chartered Accountants of India (ICAI) and CPA Australia Ltd, the two largest Chartered Accountancy bodies in the world have decided together by working out a Mutual Recognition Agreement (MRA), which was signed today, to recognize the qualification, training of each other and admit the members in good standing by prescribing a bridging mechanism.

“The instant MRA with CPA Australia by ICAI is a step forward in increased mobility to professionals at either end and would herald a new dimension for businesses globally” said President, ICAI, Ved Jain. Adding further Mr Ved Jain stated “ It also puts the two Accountancy Profession from India and Australia on global radar to play the leadership role in addressing new challenges before profession.”

“A landmark agreement between CPA Australia and ICAI highlights the increasingly global nature of the accounting profession”, said President, CPA Australia, Alex Malley.

As per the Mutual Recognition Agreement reached, members of ICAI who are graduates will be eligible for CPA Australia membership on passing one paper on Business Strategy and Leadership. On the other hand, members of CPA Australia will be eligible for ICAI membership subject to passing two papers on Corporate & Allied Laws and Taxation and two more papers on Advanced Auditing & Professional Ethics and Financial Reporting, if they have not already passed them as a part of the CPA Australia programme.

The papers in respect of bridging mechanism as above would be administered locally by the two institutes. Mutual Recognition Agreement is likely to herald an increased mobility of the professionals in either country.

The MRA will open professional opportunities to our members in Australia and this will bring the two countries, India and Australia, closer.

CPA Australia is one of the Worlds largest accounting bodies, representing 122, 000 finance, accounting and business professionals in Australia, Asia and Europe with 12 overseas divisions and branches.

The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949 for the regulation of the profession of Chartered Accountants in India. During its nearly six decades of existence, ICAI has achieved recognition as a premier accounting body not only in the country but also globally, for its contribution in the fields of education, professional development, maintenance of high accounting, auditing and ethical standards. ICAI now is the second largest accounting body in the world.

This MRA comes closer on the heels of an arrangement entered by ICAI with the Institute of Chartered Accountants of England and Wales in November 2008.

Launch of Accounting museum

February 2, 2009
Press Release
The Institute of Chartered Accountants of India has set up the Accountancy Museum at its office in the ICAI Bhawan at C-1, Sector-1, in Noida. It was inaugurated by the President of the Institute, CA. Shri Ved Jain on February 2, 2009, at 12.30 PM. The Vice President CA. Shri Uttam Prakash Agarwal and all the Council members were also present on the occasion.

This Accountancy Museum has been conceptualised as an assemblage to trace the origin and growth of accountancy in India and in the world. Focus of the Museum is on the accountancy practices in ancient, medieval and modern India. The Museum through its collection of rare and unique items on display traces the evolution of bookkeeping, accounting and profession of accountants in India.

This museum depicts the development of accountancy at different stages of the history through artefacts, documents, manuscripts, photographs etc. to give an aura of the historical period. Among many items displayed in the museum, we have old balance sheets dating back to 1929, first balance sheet of the Institute, first report of the Council of the Institute, Certificate of the Government Diploma in Accountancy (GDA), first Certificate of Membership of Shri G.P. Kapadia, certificates of merit and Gold Medals of the first R.A. Final Examination and first C.A. Final Examination.

The Museum also narrates the story of the birth of the Institute through the documents from the recordings of the proceedings of the meetings of the Indian Accountancy Board. Among the images, there are, among other rare and invaluable items, a photograph of the members of the Indian Accountancy Board of 1938, and a khata-bahi that dates back to Samwat 1905/ 1848 AD. There are sculptures of Kubera (the lord of wealth), Chanakya (author of Arthasastra), of a prototypical Muneemji (accountant) and Luca Pacioli (the father of Accountancy). In addition to this, there are other images that have been procured from the British Museum as well as from the private collectors from India and abroad. The National Archives of India and the archives of The Times of India and The Indian Express had been consulted for strengthening the storyline of our narrative. The sound archive of the All India Radio has also helped us with their archival collection.

A set of 5 picture post cards of the items of the museum and a comprehensive booklet are available at a nominal and reasonable price in the Museum. Eventually, we would like to request the media, the public and all the concerned for further contributions to our collection. We also would like all of you to come, observe and offer your valuable comments and suggestions.

Contact: DR NK RANJAN
Phone: +91-120-3054847; +91-9810700631