Govt revives national advisory panel on accounting standards

The government has reconstituted the NACAS to push forward the convergence of Indian accounting standards with global norms.
The National Advisory Committee on Accounting Standards will advise corporates on accounting policies and standards.
It will be in place till National Financial Reporting Authority (NFRA), under the new companies law, is set up.
Amarjit Chopra, a chartered accountant, is the chairperson of the 13-member panel, that has representatives from RBI and SEBI, among others.
The panel would "advise the central government on the formulation and laying down of accounting policies and accounting standards for adoption by companies or class of companies", the ministry said in a September 18 circular.

The government has said that adoption of new Indian Accounting Standards (Ind AS) by domestic companies should voluntarily start from the 2015-16 fiscal, making them mandatory from 2016-17.

Meanwhile, tenures of the chairperson and members of revamped NACAS would be for one year or till the constitution of NFRA.
Under the Companies Act, 2013, the government is to set up NFRA that would have powers to lay down the accounting and auditing policies and standards.
In the committee, there would also be officials from Corporate Affairs Ministry, CBDT and CAG.
Presidents of Institute of Cost Accountants, Institute of Chartered Accountants and Institute of Company Secretaries as well as representatives from industry groupings -- CII, Ficci and Assocham -- are among other committee members.

On the reconstitution of NACAS, Sai Venkateshwaran -- Partner and Head, Accounting Advisory Services, KPMG in India -- said the development is quite timely and a welcome step.
"The reconstitution of NACAS, pending the constitution of NFRA, was expected considering that the Ministry of Corporate Affairs needs to take several steps towards the adoption of Indian Accounting Standards (Ind-AS) converged with IFRS from 2016-17," he noted.
NACAS was set up a few years ago under the provisions of the Companies Act, 1956. This relevant provision would be in effect till NFRA comes into existence.
Finance Minister Arun Jaitley, in his Budget speech on July 10, had said there was an urgent need to converge the current Indian accounting standards with IFRS (International Financial Reporting Standards).