What are the procedure of issuing accounting standards in India?

Answer 1

PROCEDURE FOR ISSUING

AN ACCOUNTING STANDARD FOR LOCAL BODIES (ASLB)

Broadly, the following procedure is adopted for formulating Accounting

Standards for Local Bodies:

1. Determine the broad areas in which Accounting Standards need to

be formulated and the priority in regard to the selection thereof.

2. For the preparation of the Accounting Standards, the CASLB will

be assisted by Study Groups constituted to consider specific

subjects. In the formation of Study Groups, provision will be made

for wide participation by various interest groups.

3. The draft of the proposed standard will normally include the

following:

a. Objective of the Standard,

b. Scope of the Standard,

c. Definition of the terms used in the Standard,

d. Recognition and measurement principles, wherever

applicable,

e. Deviations, if any, from the corresponding International

Public Sector Accounting Standard (IPSAS), as an Appendix

to the Standard.

4. The CASLB will consider the preliminary draft prepared by the

Study Group and if any revision of the draft is required on the basis

of deliberations, the CASLB will make the same or refer the same to

the Study Group.

5. The procedure for issuance of an Interpretation on any Accounting

Standard for Local Bodies will be the same as that for issuance of an

Accounting Standard since the authority of an Interpretation is the

same as that of Accounting Standard for Local Bodies to which it

relates.

6. The CASLB will circulate the draft of the Accounting

Standard/Accounting Standards Interpretation for Local Bodies to

the Council members of the ICAI and the following specified

bodies for their comments:

a. Comptroller and Auditor General of India (C&AG)b. Ministry of Urban Development, Government of India

c. Controller General of Accounts

d. Ministry of Panchayati Raj, Government of India

e. National Institute of Urban Affairs

f. Directorates of Local Bodies of the State Governments

g. Directorates of Local Fund Audit Department of the State

Government

h. Major Local Bodies

i. National Institute of Financial Management

j. Securities and Exchange Board of India

k. Any governmental Committee(s) or other similar body, e.g.,

the Technical Committee on Budget and Accounting

Standards for ULBs constituted by the Ministry of Urban

Development

l. The All India Council of Mayors

m. All India Institute of Local Self Government

n. Donor of funds to Local Bodies such as US AID, World

Bank, etc.

o. The Institute of Cost and Works Accountants of India

p. The Institute of Company Secretaries of India

q. All the Indian Institutes of Management (IIMs)

r. Any other body considered relevant by the CASLB keeping

in view of the nature of the Accounting Standard.

7. The CASLB will hold a meeting with the representatives of the

selected specified bodies to ascertain their views on the draft of the

proposed Accounting Standard/Accounting Standards

Interpretation for Local Bodies. On the basis of comments received

and discussion with the representatives of specified bodies, the

CASLB will finalise the Exposure Draft of the proposed Accounting

Standard/Accounting Standards Interpretation for Local Bodies.

8. The Exposure Draft of the proposed Standard/Interpretation will

be issued for comments by the members of Institute and the public.

The Exposure Draft will be sent to the specified bodies (as listed

above), and other interest groups, as appropriate.

9. The Exposure Draft will be sent to any governmental Committee(s)

or other similar body, e.g., the Technical Committee on Budget and

Accounting Standards for ULBs constituted by the Ministry of

Urban Development for sending comments on the Exposure Drafts

of the proposed Standard/Interpretation.10. After taking into consideration the comments received, the draft of

the proposed Accounting Standard/Accounting Standards

Interpretation for Local Bodies will be finalised by the CASLB and

submitted to the Council.

11. The Council of the ICAI will consider the final draft of the

proposed Standard/Interpretation, and if found necessary, modify

the same in consultation with the CASLB. The Accounting

Standard/Accounting Standards Interpretation on the relevant

subject will then be issued by the ICAI.

12. The ICAI will send the Accounting Standards so formulated to the

governmental Committee(s) or other similar body, e.g., the

Technical Committee on Budget and Accounting Standards for

ULBs constituted by the Ministry of Urban Development for

recommending the same for implementation by the State

Governments to achieve uniformity in preparation and

presentation of financial statements by complying with the

requirements of the Accounting Standards for Local Bodies.

13. For a substantive revision of an Accounting Standard.Accounting

Standards Interpretation for Local Bodies, the procedure followed

for formulation of a new Accounting Standard/Accounting

Standards Interpretation for Local Bodies, as detailed above, will be

followed.

14. Subsequent to issuance of an Accounting Standards/Accounting

Standards Interpretation for Local Bodies, some aspect(s) may

require revision which are not substantive in nature. For this

purpose, the ICAI may make limited revision to an Accounting

Standard/Accounting Standards Interpretation for Local Bodies.

The procedure followed for the limited revision will substantially

be the same as that to be followed for formulation of an Accounting

Standard/Accounting Standards Interpretation for Local Bodies,

ensuring that sufficient opportunity is given to various interest

groups and general public to react to the proposal for limited

revision.