Memorandum of Understanding(MOU) between the Core Group on IFRS constituted by the Ministry of Corporate Affairs, Government of India and the IFRS Cou

The India-Japan Forum 2010 was formally inaugurated on 26th July 2010 coinciding with the visit of India delegation led by Shri R. Bandhyopadhyay, Secretary, Ministry of Corporate Affairs, Government of India, to Japan. The occasion also witnessed signing of a historic Memorandum of Understanding (MOU) between the Core Group on IFRS constituted by the Ministry of Corporate Affairs, Government of India and the IFRS Council, Japan.

CA. Amarjit Chopra, President ICAI and Noriaki Shimazaki, Chairman, International Affairs Committee, the IFRS Council of Japan signed this MOU in the august presence of Shri R. Bandyopadhyay, Secretary, Ministry of Corporate Affairs, Government of India.

The Indian Delegation also comprised of Shri Sunil Verma, Secretary Audit Board, Office of C&AG, Shri C.B. Bhave, Chairman SEBI, Shri R.K. Nair, Member IRDA, Shri P.R. Ravi Mohan, Chief General Manager RBI, Shri Amarjit Chopra, President ICAI, Shri Manoj Fadnis, Chairman ASB of ICAI, Shri Pawan Kumar, Director, Ministry of Finance, Shri Ravi Narian MD & CEO, NSE, CA.G. Ramaswamy, Vice-President ICAI, Shri M.D. Pai, Director Board Infosys . Shri R. Ramanujam, Minister (Economic & Commercial), Embassy of India in Japan also joined the Indian Delegation on the two days. Sir David Tweedie, Chairman IASB also addressed the occasion and expressed satisfaction over the India-Japan dialogue and assurance of supporting this initiative.

With India already treading a path to convergence with IFRS in a phased manner; and Japan also having started the thought process for mandatory application of IFRS; which is to be determined around 2012 (in case of Japan), the coming together of two leading Asian economies for taking leadership role in the region assumes a great significance.

The collaboration between Indian Core Group on IFRS under the aegis of Ministry of Corporate Affairs, Government of India and the IFRS Council dwells on exchange of views on legal and regulatory issues at either end while moving to IFRS regime and in process address capacity building issues through knowledge and information sharing. The two sides will address critical issues arising in application of or convergence to IFRS through process of mutual consultation and through the India-Japan Forum raise such issues at appropriate international forums.

Addressing the India-Japan Forum 2010 on July 27, 2010; His Excellency Kouhei Ohtsuka, Senior Vice Minister of Cabinet office for Financial Services, Japan lauded the joint initiative of the IFRS Council, Japan and the India Core Group on IFRS. Referring to India & Japan also being part of G-20; and the fact that two nations have put great reliance on disclosure system of Corporate Performance and that two nations in their own way are proving to be engines of growth; their coming together augurs well for the Trade and Industry.

Speaking at the occasion; Shri R. Bandyopadhyay, Secretary, Ministry of Corporate Affairs, Government of India, focused on integration of world economies and therefore continuous evolution of measures for sustaining and enhancing the levels of transparency and fairness as the need of the hour. Addressing further, he added that Indian government has endeavored to evolve IFRS convergence through process of consultation with concerned stakeholders; preparing companies and professionals in the process through capacity building and training of professionals; to which direction Core Group on IFRS in India which has representatives of wide section of Regulators and other stakeholders is striving to work upon. The presentations during the forum primarily focused on Capital Market at either end, issues for regulators, issues arising out of convergence for Industry/Auditors/Standard Setters, in addition to a lively Panel Discussion on the aforesaid thematic issues.

Other relevant information

The IFRS Council has representatives from the Financial Accounting Standards Foundation (FASF), the Japan Business Federation (JBF), Japanese Institute of Certified Public Accountants (JICPA), Tokyo Stock Exchange (TSE), Osaka Securities Exchange (OSE), the Securities Analysts Association of Japan (SAAJ), the Accounting Standards Board of Japan (ASBJ), and the Financial Services Agency (FSA).

The day also saw presentations from RBI, SEBI, NSE, PFRDA, ASB of ICAI in addition to the perspective sharing by President & CEO, Tokyo Stock Exchange, FSA of Japan, ASB of Japan and the International Affairs Committee of the IFRS Council of Japan and was attended by over 300 JICPA professionals and others from industry in Japan.

During the occasion, the five sub groups on Accountancy Profession, Accounting Standard Standards, Stock Exchanges, Regulatory issues and Industry also met and made joint presentations to the Joint Working Group.

How to Show leading zeros (pls select display images on your email to view the images)

Sometimes you may need to enter numbers that begin with zeros into a worksheet, such as fixed-length part numbers or serial numbers. By default, Excel drops the leading zeros.

Here are a couple of options:

Option 1 - The Apostrophe Method:

If you just need to enter an occasional number with leading zeros you can simply type an apostrophe before the number (e.g. '00123).

Option 2 - The Custom Number Format Method

Another way is to create a custom number format to display your numbers with leading zeros. In this scenario, your numbers are displayed as fixed-length numbers with leading zeros (e.g. 00123), however, the underlying value in the cell is still the number without the zeros (e.g. 123).

1) Select the cells containing the numbers you want to show leading zeros;

2) in Excel 2007, on the Home tab, click on the Number Format dropdown in the Numbergroup and choose More Number Formats at the bottom of the list. For Excel 2000-2003, from the Format menu select Cells and click the Number tab;

3) In the Category area, select Custom;

4) In the Type field enter zeros for the number of digits you want your numbers displayed.

Option 3 - The Text Format Method

A third way to enter numbers with leading zeros is to format the range of cells as Text.

To do this...

1) Select the cells to be formatted;

2) In Excel 2007, on the Home tab, click on the Number Format dropdown in the Number group and select Text from the list. In Excel 2000-2003, from the Format menu selectCells, click the Number tab, and select Text from the Category list.

INVITATION TO COMMENT

Whether to apply AS 30 (Revised) Financial Instruments: Recognition and

Measurement corresponding to IAS 39 or apply early AS 40 corresponding to IFRS

9, Financial Instruments, for entities which are required to follow converged

Accounting Standards from April 1, 2011

The Accounting Standards Board (ASB) of the Institute of Chartered Accountants of

India (ICAI) has issued the exposure draft of proposed Accounting Standard (AS) 40,

Financial Instruments corresponding to International Financial Reporting Standard

(IFRS) 9, Financial Instruments, issued by International Accounting Standard Board

(IASB).

The IASB has announced that IFRS 9 will come into effect from January 01, 2013 . Until

2013, International Accounting Standard (IAS ) 39, Financial Instruments: Recognition

and Measurement, would remain in force. However, since early adoption of IFRS 9 is

encouraged, it is possible to follow IFRS 9 before January 01, 2013. The ASB of ICAI

has also issued exposure draft of revised AS 30 incorporating the amendments in IAS 39

since the issuance of AS 30 by ICAI in 2007.

It may be noted that like IFRS 9 , the exposure draft of AS 40 deals only with the

accounting for financial assets . For accounting for other aspects of financial assets and

other financial instruments, e.g., financial liabilities, derecognition, impairment and

hedge accounting, it makes reference to AS 30 (Revised). IASB expects that IFRS 9 will

be completed incorporating the abovementioned aspects by the middle of 2011.

In respect of entities which are required to converge from April 01, 2011 , one of the

following options is being considered for:

1. To require application of AS 30 in all respects including financial assets; or

2. To require early application of AS 40 which would mean that accounting for

financial assets would be as per AS 40 and accounting for other aspects of

financial assets and other financial instruments would be as per AS 30 (Revised).

Comments are invited as to which one of the above options should be followed. It has

been decided that allowing both the options will not be considered.

Comments should be submitted in writing to the Secretary, Accounting Standards Board ,

The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100,

Indraprastha Marg, New Delhi – 110 002, so as to be received not later than July 31,

2010. Comments can also be sent by e -mail at edcommentsasb@icai.org or asb@icai.org.

The text of the Exposure Drafts is available at the following links on the web-site of the

Institute:

(i) Exposure Draft of AS 40 (Issued 20XX), Financial Instruments at:

http://www.icai.org/resource_file/19429announas40.pdf

(ii) Exposure Draft of AS 30 (Revised 20XX) Financial Instruments: Recognition

and Measurement at

http://www.icai.org/resource_file/19426announas30.pdf

GAAP and IFRS - six degrees of separation (cfo.com)

Next year American and international accounting standard setters will complete their eight-year mission to develop one set of global rules. In the end, the so-called convergence project will make U.S. generally accepted accounting principles look more like international financial reporting standards.

Although much uncertainty surrounds whether American companies will be forced to make a wholesale switch to IFRS, international standards will be "a reality" in the United States, predicted Ronald Kral, managing partner at accounting firm Candela Solutions, at a recent conference sponsored by the Institute of Management Accountants.

The Securities and Exchange Commission will decide next year whether publicly traded companies will be required to adopt international standards. It's likely that U.S. exceptions will be written into the version of IFRS that the SEC sanctions, said Kral. "Just about every country that has adopted IFRS tweaks it...to some degree," he said.Companies in mid-2011 will have their hands full with at least 10 major new standards issued as joint projects of the Financial Accounting Standards Board and the International Accounting Standards Board. The areas covered include accounting for financial instruments, fair-value measurement, leases, and revenue recognition. FASB originally intended to release a dozen new exposure drafts in June, noted Kral, but the board mercifully put the brakes on, promising to have only four drafts out for comment at any one time.

But in addition to finalizing new accounting standards, FASB and the IASB must iron out a number of technical accounting issues before the convergence project can be completed, said Kral. Finding common ground on those issues should make the SEC's decision about switching to IFRS easier, he said, as U.S. GAAP would look similar to international standards in several critical areas. Kral singled out six differences between U.S. and international rules for comment:

1. Error correction. According to IFRS rule IAS 8, it's not always necessary to retrospectively restate financial results when a company corrects errors, especially if the adjustment is impractical or too costly. U.S. GAAP, on the other hand, requires restatements in many error-correction cases.

2. Death of LIFO. Last-in, first-out inventory accounting is prohibited under IAS 2, so any American company using the method will have to abandon it (and the tax benefits) and move to another methodology. Although LIFO is permitted under U.S. GAAP, the repeal of LIFO for tax purposes is an ongoing debate.

3. Reversal of impairments. IAS 36 permits companies to reverse impairment losses up to the amount of the original impairment when the reason for the charge decreases or no longer exists. However, U.S. GAAP bans reversal.

4. PP&E valuation. IAS 16 allows for the revaluation of property, plant, and equipment, but the entire asset class must be revalued. That means a company can choose to use the revaluation model if its fair value can be measured reliably. But it must choose to use one model or the other; both cannot be used at the same time. U.S. GAAP does not allow revaluation.

5. Component depreciation. Also under IAS 16, companies must recognize and depreciate equipment components separately if the components can be physically separated from the asset and have different useful life spans. In practical terms, that means controllers will have to rely on the operations side of the business to help assess equipment components. U.S. GAAP allows component depreciation, but it is not required.

6. Development costs. Based on IAS 38, companies are permitted to capitalize development costs as long as they meet six criteria. However, research costs are still expensed. U.S. GAAP requires that all R&D costs be charged to expense when incurred.

Kral also warned preparers and users of financial statements to get ready for an avalanche of footnotes. Since using IFRS requires more judgment than using U.S. GAAP, he said, "two to three times as many footnotes" will be needed to explain the rationales for accounting approaches. Indeed, Kral asserted that although principles-based standards are supposed to promote more comparability between financial statements, all they really do "is force investors to read more footnotes."

Review of Indo-Singapore CECA - Services Agreement-Reply from Members of ICAI

Review of Indo-Singapore CECA – Services Agreement

The Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore came into force on August 1, 2005. . It was the first comprehensive trade agreement India signed with any trade partner and was aimed at facilitating trade in goods and services and investment between the two countries.

The present exercise is regarding review of the trade in services based upon the working of the provisions contained in Chapter 7 (Trade in services) and Chapter 9 (Movement of Natural Persons).

It was also agreed that Mutual Recognition Agreements (MRA) between the professional bodies of the two states will be entered into, which will allow doctors, dentists, nurses, accountants and architects trained in India to practise in Singapore and vice-versa.

It has undergone one review in 2007, as per the agreed schedule and concentrated on implementation issues.

A fresh review will soon be underway and has been announced by both nations. As part of the India-Singapore Bilateral Economic Roadmap drawn between the two sides, the following issues relate to Services: Assess implementation of CECA Services Chapter with a view to further improvement. Expedite conclusion of MRAs for dentistry, medical, nursing, architecture, accountancy and company secretary professionals on priority Explore expansion of the provisions of CECA to liberalize and facilitate movement of Indian professionals to Singapore.

From an Indian perspective the initial years have seen several unforeseen problems such as the inability/unwillingness to conclude the mutual recognition agreements (MRAs) on the professional services of interest to India. These procedural issues must be sorted out, in the hope that bilateral trade flows in commercial services will grow at a comparable pace as the merchandise trade growth.

A Questionnaire is formulated to assess the impact of the India-Singapore CECA with respect to the Indian Services Sector.

[The Indian commitments in the CECA for Services can be accessed at http://commerce.nic.in/ceca/anx7a.pdf.

Similarly, the Singaporean commitments are available at http://commerce.nic.in/ceca/anx7b.pdf. ]

The chapter on Movement of Natural Persons is available at http://commerce.nic.in/ceca/ch9.pdf.

Group for Revision of Recommended Scale of Fee Chargeable by the Members of the Institute (Image below - click on display images on your email)

Submission of Suggestions on the Revised Discussion Paper [RDP] on the Direct Taxes Code [DTC] by the Direct Taxes Committee

The Direct Taxes Committee of the Institute has submitted its Suggestions on the Revised Discussion Paper [RDP] on the Direct Taxes Code [DTC] to the Ministry of Finance on 30.06.2010.

Click here to download

Cant you see the depression ahead

If policymakers do not understand the real cause of a problem, they will in all likelihood be unable to provide a genuine solution.

Messrs. Barack Obama, Benjamin Bernanke and Timothy Geithner do not understand the real cause of this debt crisis. They are politicians first and economists or students of the market second--if at all. Therefore, it is not wise to count on them to tell us when the Great Recession is over, or to provide a plan to prevent another one in the future.

The cause of the Great Depression in the 1930s, and the Great Recession beginning in 2007, was one and the same: an overleveraged economy. Excessive debt levels are the direct result of the central bank providing artificially low interest rates and of superfluous lending on the part of commercial banks.
The easy money provided by banks eventually brings debt in the economy to an unsustainable level. At that point, the only real and viable solution is for the public and private sectors to undergo a protracted period of deleveraging. The ensuing depression is, in actuality, the healing process at work, which is marked by the selling of assets and the paying down of debt.

Unfortunately, our politicians today are focused on fighting this natural healing process by promoting the accumulation of more debt.

During this latest economic contraction, the Federal Reserve took interest rates to near 0%, and the Obama administration is leveraging up the public sector to record levels in a bid to re-leverage the private sector. The government's philosophy is tantamount to sticking a frostbitten man in the freezer so he won't have to suffer the pain associated with the thawing of his extremities.

During the Great Depression, real gross domestic product plummeted 32%. The Great Recession, which we are still struggling through, began in December 2007, according to the National Bureau of Economic Research. In contrast to the 1930s, GDP during this recession shrank only 3.6% from the fourth quarter of 2007 through its low point in the second quarter of 2009. Between the fourth quarter of 2007 and the first quarter of this year (the most recent period for which data is available), GDP contracted a mere 1.1%.

The contraction in GDP during the Great Depression was the direct result of consumers paying down debt and selling off assets. Household debt as a percentage of GDP reached nearly 100% in 1929. To put that number in perspective, household debt did not go back above 50% of GDP until 1985. It was not until the first quarter of 2009 that household debt once again approached the Great Depression level of 100% of GDP.
Between the start of the Great Depression and the end of World War II, household debt fell from 100% to just above 20% of GDP. Getting there was a painful process, but such de-leveraging was the only real cure for an economy swimming in debt. Thanks to government efforts to carry on our debt-fueled consumption binge, during today's Great Recession household debt has barely contract at all; it fell to 92.5% of GDP in the first quarter of this year.

To make matters even worse, during this current crisis our government's response has been to dramatically increase its own borrowing. At the start of the Great Depression, gross federal debt was 16% of GDP. It peaked just below 44% when the Depression ended. While the national debt did increase significantly during that period, it was still relatively benign when viewed from a historical perspective.

The U.S. entered the current Great Recession with gross national debt equal to 65% of GDP. It has since exploded to 90% of GDP! Comparing the relatively innocuous level of the 1930s with today's pile of government debt clearly illustrates the perilous state of the economy.

National debt did rise dramatically during World War II, topping out at 120% of GDP in 1946. But consumer debt plunged concurrently. So while the nation was adding debt to fight and win a global war, households were taking the necessary steps to ensure their balance sheets were well prepared for the aftermath of the battle.
Today, gross national debt and household debt are both at or above 90% of GDP for the first time in our history.
Many observers--unfortunately including most of those in power--have concluded that the government must spend more while consumers rein in their debts. Their strategy is based on the belief that once the economy perks up they can unwind that debt.

There are two problems with this Keynesian theory. One is that government spending doesn't increase GDP; it only chokes off private-sector growth. The other is that politicians never regard the present as a good time for the government to pay off its debts.

The result is that the country is left with a private sector reducing a massive overhang of debt. As households curb spending, GDP slows, and the ratio of debt to economic output grows even further.

Since we have yet to address the real cause of this recession, we are moving inexorably closer to causing The Greater Depression. If policymakers do not understand that the progenitor of a depression is debt, they will also be unable to provide a genuine solution.

Michael Pento is chief economist at Delta Global Advisors and a contributor to greenfaucet.com.

Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice.