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Accounting professionals can form LLPs in India soon

The Indian government is set to introduce Bills to amend existing laws governing chartered accountants, cost accountants and company secretaries in the current Budget session, a senior government official said. The proposed amendments will allow registration of large size consultancy firms in India.

The amendments will remove the hurdles that come in way for members of ICAI, ICSI and ICWAI to jointly form Limited Liability Partnerships (LLPs). These amendments will enable formation of LLPs comprising professionals from different fields. Right now professional bodies are not able to form LLPs because of certain clauses in respective Acts.

Source: http://economictimes.indiatimes.com/news/economy/policy/Bill-letting-accounting-pros-form-LLPs-soon/articleshow/5613711.cms

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No decision taken about the timing of a possible conversion to IFRS

While the SEC approved a statement supporting the adoption of global accounting standards for U.S. companies, the Chairman Mary Schapiro cautioned that, “Incorporating International Financial Reporting Standards (IFRS) into our financial reporting system would involve a significant undertaking. We must carefully consider and deliberate whether such a change is in the best interest of U.S. investors and markets.

“The Commission also voted to approve a Work Plan developed by SEC staff that would gather information to aid the Commission as it evaluates the impact that the use of IFRS by U.S. companies would have on our securities market,” Schapiro said. The Work Plan will be completed in 2011, the target date set by the 2008 Proposed Roadmap.

Schapiro said, however, that no decision had been made about the timing of a possible conversion to IFRS. “We must still determine what this means for U.S. companies and markets; should we incorporate IFRS into our reporting system and, if so, when and how?

Source: http://www.accountingweb.com/topic/cfo/sec-approves-work-plan-assess-us-adoption-global-accounting-standards

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Sri T.N. Manoharan

Sri T.N. Manoharan

The Government of India named Sri T.N. Manoharan the first accountancy professional from Tamil Nadu to be conferred with the Padma Shri award. Manoharan is based out of Chennai, India and was recently appointed as a board member of the scam-hit Satyam Computer Services and later made as its chairman before the company was taken over by the Mahindra group. He is a distinguished professional and has several acheivements to his credit. Son of T.L. Narayana Chowdhry, a 93-year-old a freedom fighter, Manoharan, 52, is a partner in Manoharan Chowdhry Associates. He is also the past president of the Institute of Chartered Accountants of India (ICAI).

Padma Shri is an award given by the Government of India generally to Indian citizens to recognize their distinguished contribution in various spheres of activity including the Arts, Education, Industry, Literature, Science, Sports, Medicine, Social Service and public life. It stands fourth in the hierarchy of civilian awards after the Bharat Ratna, the Padma Vibhushan and the Padma Bhushan. On its obverse, the words “Padma”, meaning lotus in Sanskrit and “Shri”, in Devanagari script, appear above and below the lotus flower. The geometrical pattern on either side is in burnished bronze. All embossing is in white gold.

‘Accounting for Investments’ blog congratulates Sri T. N. Manoharan on being conferred with the Padma Shri award.

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Wiley CPA Exam Review 2010 Test Bank CD – Complete Set (CD-ROM) that is scheduled to be released during mid February 2010 is a real boon to all aspiring CPAs: Here are the details:

Product Description

The key to CPA Exam success is practice, practice, and more practice!

Highly organized, up-to-date, comprehensive

* Multiple-choice questions and their solutions help you sharpen your problem-solving skills
* Simulation questions and solutions address the computerized Exam’s simulation-style problems
* The most effective system available to prepare and practice for the CPA Exam
* All current AICPA content requirements in each subject are included
* Covers all new question forms and formats for the computerized Exam, including multiple-choice and simulations
* Guidelines, pointers, and tips on how to build knowledge in a logical, reinforcing way
* Unique modular format helps you zero in on areas that need work, organize your study program, and concentrate your efforts

Dozens of special features to fit your special needs

* In Study mode you can structure and monitor your practice study time based on your own objectives
* The Exam mode simulates actual exam conditions
* Customizable question formats let you con-centrate on specific exam sections, question types, and question status (“not seen before,” “answered incorrectly,” etc.)
* TextLink feature provides comprehensive explanations that show you why incorrect answers fall short
* Diagnostic feedback on user performance helps you focus on areas where you need the most work
* Printing options let you keep studying when you can’t be near your computer

System Requirements

512 MB RAM recommended, PIII compatible or higher processor – 1 GHz recommended, Windows XP, or Vista 32-bit or 64-bit, 100 MB disk space for application files, .NET 3.5 Framework (280 MB disk space), SQL Server 2005 Express (600 MB disk space), Microsoft Internet Explorer 6.0 SP1 or later, Windows Installer 3.0

*.NET 3.5 Framework and SQL Server 2005 Express are included on the CD.

Installation instructions:

1. Insert CD into your CD-ROM drive.
2. From Start menu, select Run.
3. Type D:\setup.exe and hit OK (where D is the letter of your CD-ROM drive).
4. Follow instructions on screen

For technical support, please visit http://www.wiley.com/go/cpasupport

Product Details

* CD-ROM
* Publisher: Wiley; Cdr edition (February 15, 2010)
* Language: English
* ISBN-10: 0470453486
* ISBN-13: 978-0470453483

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I F R S to be mandatory only for big corporates in the first phase

The much-anticipated International Financial Reporting Standards (IFRS) is likely to be rolled out only partially in India from April 1, 2011.That’s because a core group on IFRS implementation, set up by the ministry of company affairs and headed by renowned chartered accountant Y H Malegam, is set to recommend that it be made mandatory only for big corporates in the first phase.

Source: DNA India

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Central Board of Direct Taxes (CBDT) and accounting rule-maker Institute of Chartered Accountants of India (ICAI) have jointly constituted a study group to identify and address direct tax issues that will affect convergence of India’s accounting standards with International Financial Reporting Standards (IFRS).With IFRS convergence due for April 2011 and the government coming up with the new Direct Taxes Code (DTC), the suggestions of the study group finds relevance.

Source: Economic Times

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Automatic FDI route to close for 10 sectors

Keen to beef up national security, the government plans to slap new entry route restrictions on foreign direct investment (FDI) beyond 49% in eight specified “sensitive” sectors, including airports, seaports, pharma, petroleum refining and gas pipelines. In all these sectors, 100% FDI through the automatic route is permitted now.Once a stricter policy is in place, proposals to expand FDI beyond 49% in these sectors would have to be vetted by the Foreign Investment Promotion Board (FIPB), official sources said.

Source: Indian Express

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SEBI extends stock lending, borrowing tenure to 12 months

The Securities and Exchange Board of India (SEBI) has extended the tenure of contracts for stock lending and borrowing (SLB) up to a maximum period of 12 months, as it tries to revive the comatose segment.SLB was introduced in April 2008, starting with a contract tenure of seven days. With hardly any interest from market participants in the product, the regulator increased the tenure to 30 days in November that year. But even that has not helped in attracting investors to the SLB window.

Source: Economic Times

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New online course on IFRS 9: Financial Instruments

There is a new course on IFRS 9 and you can take the course here: Accounting for Investments

On 12 November 2009, IASB published IFRS 9 Financial Instruments on the classification and measurement of financial assets. The present IAS 39 is proposed to be replaced in three phases as follows by International Accounting Standards Board (IASB):
Phase 1: Classification and measurement. This is presently published as IFRS 9 Financial Instruments on the classification and measurement of financial assets.
Phase 2: Impairment methodology. On 25 June IASB published a Request for Information on the feasibility of an expected loss model for the impairment of financial assets. The exposure draft published in November 2009.
Phase 3: Hedge accounting. IASB is currently conducting outreach with its constituents and intends to issue an exposure draft on hedge accounting in the first quarter of 2010.

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Salient differences between IAS 39 and IFRS 9

On 12 November 2009, the International Accounting Standards Board (IASB) issued IFRS 9 Financial Instruments.

Salient differences between IAS 39 and IFRS 9

Parameter

IAS 39

IFRS 9

Name

Financial Instruments:
Recognition and Measurement

Financial Instruments

Applicability

Currently effective

Effective from 1st Jan 2013 with early adoption permitted

Scope

All aspects of Financial
assets & Financial Liabilities including hedge accounting

Only Financial assets included. Presently the standard does not include Financial liabilities, derecognition of financial  instruments, impairment and hedge accounting

Classification
of debt instruments

Fair Value Through Profit & Loss (FVPL)

Available-for-sale (AFS)

Held-to-maturity (HTM)

Loan and Receivable (LAR)

Fair Value Through Profit & Loss (FVPL)

Amortised Cost (AC)

Classification
of equity instruments

Fair Value Through Profit
& Loss (FVPL)

Available-for-sale (AFS)

Fair Value Through
Profit & Loss (FVPL)

Fair Value Through Other Comprehensive Income (FVOCI)

Basis of classification

Intention to hold till maturity, trading for short term profits, derivative, loan or receivable, or intentional designation subject to certain restrictions

Classification based on business model and the contractual cash flow characteristics

Measurement
– Debt Instruments

Measured at amortised cost if classified as held-to-maturity or as loan or receivable.

Other classifications are measured at fair value.

Measured at amortised cost (AC) if business model objective is to
collect the contractual cash flows and the contractual cash flows represent solely payment of principal and interest on the principal amount outstanding.

Debt instruments meeting the above criteria can still be measured at fair value through profit or loss (FVPL) if  such designation would eliminate or reduce accounting mismatch.

If not, measured at fair value through profit or loss (FVPL)

Measurement
– Equity Instruments

Measured at fair value.

Exception: Unquoted equity
investments are measured at cost where fair valuation is not sufficiently reliable.

Measured at fair value through profit or loss.

An entity can irrevocably designate  at initial recognition as fair value through other comprehensive  income, provided the equity  investment is not held for trading.

Embedded
derivatives

Embedded derivatives are
separated from the hybrid contract and are measured at FVPL.

No bifurcation of asset.

The financial asset is assessed in its entirety as to the contractual cash flows and if any of its cash flows do not represent either payments of principal or interest then the whole asset is measured at FVPL.

Fair value option

An entity can designate a financial asset to be measured at fair value on initial recognition.

The entity has the freedom to do so and need not satisfy any other criteria

A financial asset can be designated as FVPL on initial recognition only
if that designation eliminates or significantly reduces an accounting
mismatch had the financial asset been measured at amortised
cost.

Reclassifications
– Debt instruments

Reclassification between the various four categories allowed under specific circumstances with the gain/loss being treated differently depending upon the movement between the classifications.

Reclassification from held-to-maturity (HTM) is viewed seriously if does not fall within the permitted exceptions.

If entity’s business model objective changes, reclassification is permitted between FVPL and AC or vice versa. Such changes should be demonstrable to external parties and are expected to be very infrequent.

Reclassifications
– Equity instruments

Reclassification is permitted between the FVPL and AFS.

When transferred from AFS to FVPL, unrealized gain/loss is recognized in P&L based on fair value.

When transferred from FVPL to AFS, no reversal of gain/loss recognized as unrealized is permitted.

However all gain/loss on disposal of AFS are recognized in P&L by transfer from equity.

Reclassification between FVPL and FVOCI not permitted as FVOCI classification is done at the
irrevocable designation of the entity as such.

Only dividend income is recognized in P&L of assets designated as FVOCI.

Even on disposal of such assets, the gain/loss is not transferred from equity, but remains permanently in equity.

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