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Companies must show mark-to-market losses on Derivatives: ICAI

1 Comment » Written on March 31st, 2008 by
Categories: Commentary
The Institute of Chartered Accountants of India (ICAI) has announced that companies holding derivative contracts must provide for losses on them on a mark-to-market basis. Prior to this announcement, the standard for derivatives (AS 30) was to be applicable only from April 2011. ("Recommended" from 2009).

AS 30 is still not mandatory, but ICAI maintains that if AS 30 is not followed, the losses must be mentioned separately by the company and failing that, by the auditors, from March 31, 2008 onwards. It will be interesting to see the auditors statements on public financial results this year.

I fully expect companies to dress up their results for this quarter. So it will be very interesting to see which companies have audit notes for non-compliance to AS 30. And where AS 30 has been used, to find out the extent of MTM losses.

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This entry was posted on Monday, March 31st, 2008 at 7:24 AM and is filed under Commentary. You can subscribe to any comments to this entry via RSS 2.0. You can leave a response, or trackback from your own site.

About the Author: Deepak Shenoy
http://www.capitalmind.in
The man behind Capital Mind. Deepak has co-founded MarketVision, a financial knowledge startup. He has traded the Indian Markets for nearly a decade. Deepak lives in Gurgaon and fears using long words.

One Response to “Companies must show mark-to-market losses on Derivatives: ICAI”

>Hi Deepak,

I have a query though unrelated to this post.
What is the short term( <1yr) and long term ( >1yr) tax implication for investing in Gilt funds,FMP funds and Liquid funds.

Vishal
03.31.08 at 11:31 AM
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