IApr 1 India Inc can now breath a sigh of relief as the government has deferred the implementation of mandatory provisioning by firms for forex losses and gains on the basis of market value of their financial assets till 2011, when the country has to converge with global reporting norms.
"We have issued a notification and it is now optional for companies to show forex losses as per Schedule IV or AS 11,"a senior MCA official said. Amid India Inc lobbying hard for relaxing implementation of the accounting standard 11, a government advisory panel had suggested that the AS should not be enforced till 2011, which the government has agreed to. The National Advisory Committee on Accounting Standards had proposed that AS 11 should not be enforced till 2011 due to volatile forex. However, the Institute of Chartered Accountants of India had opposed the move and said the regulations should not be changed to suit the needs of a few companies. According to the AS 11, firms are required to make mandatory mark-to-market provisioning in the profit and loss account for foreign exchange related gains and losses.
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