Extra Time for Companies upto 15th December
The Ministry of Corporate Affairs recently extended the deadline for filing financial statements in XBRL to December 15, 2012, or within 30 days from the company’s Annual General Meeting date, whichever is later. The ministry mandated XBRL filing for financial year 2010-11. The e-forms were certified by CA/CS/CWA professionals for completeness and correctness. A random scrutiny of XBRL filings showed up significant variations from the published results due to incorrect mapping. Besides being misleading, such filings also dilute the usefulness of XBRL for stakeholders. The institutes should direct members to take steps to improve the quality of XBRL filing for FY 2011-12.
Last lap for tax accounting standards
Section 145(2) of the Income Tax Act provides that the Central Government may notify accounting standards for any class of assesses or income. The Central Board of Direct Taxes constituted a committee for this in December 2010. The first interim report was submitted in August 2011 and the final the following year. The committee recommended that the accounting standards should apply only to computation of taxable income, and a taxpayer need not maintain books of account based on them. It examined all 31 standards issued by the Institute of Chartered Accountants of India, and recommended notification of standards on 14 issues and drafted Tax Accounting Standards, or TAS, for them. The final report is open for comments and suggestions from stakeholders and the public up to November 26, 2012.
Capitalising on social media
Social media such as LinkedIn, Facebook and others have become an integral part of our life. Unlike business Web sites, which tend to be relatively static, social media is dynamic and disseminates views quickly to potentially larger audiences. With the ease to seek and share real-time information, social media encourages free flow of ideas, conversations and feedback. It is emerging a powerful tool for change. Creativity and intellect is nobody’s monopoly. Just one thought can turn out to be a potential game-changer. The Government and corporate sector alike should encourage the medium. If handled responsibly, social media can enable free flow of ideas to make the business environment and capital markets more responsive to the needs of participants.
Balance sheet under RoC lens
Companies registered under the Companies Act, 1956 are required to annually file balance sheets with the Registrar of Companies. The registrars scrutinise/ verify the content on a random basis and companies, their directors and officials are liable to be penalised for incorrect, false or misleading filings.
However, balance sheets are routinely scrutinised in the following cases:
After scrutiny, there are moves to obtain an explanation/ clarification and institute inspections, investigations and prosecutions where warranted.