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The Corporate Affairs Ministry (MCA) has extended the tenure of the 13-member National Advisory Committee on Accounting Standards (NACAS).
The advisory panel’s term will end on September 17 next year or till the constitution of the National Financial Reporting Authority (NFRA), whichever is earlier, according to an order issued by MCA.
The main purpose of setting up NACAS was to advise the Central Government on the formulation and laying down of accounting policies and accounting standards.
In September last year, the Centre had reconstituted NACAS under the Chairmanship of Amarjit Chopra. It had then specified a tenure of one year or till the NFRA is constituted, whichever is earlier.
Now, the advisory panel’s term has been extended by one more year. This MCA move does not imply that the Government has dropped its plan to set up NFRA, sources said.
MCA has also specified Pramod Kumar Bhattad, President of the Institute of Cost Accountants of India, and Manoj Fadnis, President of the Institute of Chartered Accountants of India (ICAI), as members of NACAS. They have replaced the earlier nominees of the two institutes. The Comptroller and Auditor General of India also nominates its Director-General (commercial) as a Member.
The extension of the term of NACAS would mean that this advisory body would get to sort out the implementation issues around IFRS adoption, accountancy experts said.
Meanwhile, there is huge uncertainty over India converging with IFRS from April 1 next year as the Government was yet to take a stand on the adoption of the all-important revenue recognition standard (Ind AS 115).
“Due to fluidity in the applicability of the revenue recognition standard under Ind-AS (as a result of the deferral proposed by NACAS to the MCA last month), companies are eagerly awaiting some guidance on the matter from the Ministry,” Vishal Seth, Managing Director and Leader, IFRS and Financial Reporting Advisory, Protiviti India, told BusinessLine here.
Companies are in a state of flux since the first quarter reporting under new Ind-AS is just a few months away. Given that revenue recognition is one of the most complex standards and impacts most business models, it would be helpful if the MCA rolls out a clarification on the topic in the next few weeks, Seth added.
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