Companies which wish to recruit fresh Chartered Accountants (CAs) will now have to shell out more as the of Chartered Accountants of India (ICAI) has decided to advocate a 50 per cent hike in floor salary package for new accountants. This means, minimum pay for the freshly minted accountants will work out at Rs 75,000 per month. Last year the floor was Rs 50,000 per month "New CAs get solid grounding while doing their article ship and are good at managing business environment. The compensation should reflect the talent they possess," said G Ramaswamy, President, ICAI. Of a total student strength of 5,300, the institute has placed 1,800 students so far. Highest salary at the institute has been offered to three students with an annual package of Rs 67.5 lakh offered by Olam International in Singapore.
The most comprehensive news portal for Chartered Accountants and Other Professionals around the world.
Thursday, March 31, 2011
ICAI EXAMINER COMMENTS & APRIL STUDENT NEWSLETTER
FOR PERUSAL BY STUDENTS AND CAS ARE REQUESTED TO SHARE THE LINK WITH THE STUDENTS KNOWN TO THEM.
TO DOWNLOAD VISIT FORUM SECTION
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Amendment in the Point of Taxation Rules, 2011 vide Notification No. 25/2011 –
The Ministry of Finance has issued Notification No. 25/2011 dated
March 31, 2011 amending the Point of Taxation Rules, 2011. As per this
notification, the Point of Taxation in respect of services provided by
proprietorship or partnership firms of Chartered Accountants shall be
on receipt basis, i.e., the date on which payment is received. This
benefit has also been extended to Cost Accountants, Company
Secretaries, Architects, Interior Decorators and Advocates.
notification, the Point of Taxation in respect of services provided by
proprietorship or partnership firms of Chartered Accountants shall be
on receipt basis, i.e., the date on which payment is received. This
benefit has also been extended to Cost Accountants, Company
Secretaries, Architects, Interior Decorators and Advocates.
Notification No. 25/2011–Service Tax, Dated : March 31, 2011
In exercise of the powers conferred by clause (a) and clause (hhh) of sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994) the Central Government hereby makes the following rules further to amend the Point of Taxation Rules, 2011, namely:-
1. (1) These rules may be called the Point of Taxation (Amendment) Rules, 2011.
(2) They shall come into force on the 1st day of April, 2011.
2. In the Point of Taxation Rules, 2011 (hereinafter referred to as the “said rules�), for rule 3, the following rule shall be substituted, namely:-
“3. Determination of point of taxation.- For the purposes of these rules, unless otherwise provided, ‘point of taxation’ shall be,-
(a) the time when the invoice for the service provided or to be provided is issued:
Provided that where the invoice is not issued within fourteen days of the completion of the provision of the service, the point of taxation shall be date of such completion.
(b) in a case, where the person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment, to the extent of such payment.
Explanation .- For the purpose of this rule, wherever any advance by whatever name known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance.�.
3. In rule 4 of the said rules,-
(i) for the words “change of rate�, wherever they occur, the words “change in effective rate of tax� shall be substituted;
(ii) for the words “change of rate of tax� or “change in tax rate� or “change of tax rate�, respectively at both the places where they occur, the words “change in effective rate of tax� shall be substituted;
(iii) after sub-clause (iii) of clause (b), the following Explanation shall be inserted, namely:-
“Explanation.- For the purposes of this rule, “change in effective rate of tax� shall include a change in the portion of value on which tax is payable in terms of a notification issued under the provisions of Finance Act, 1994 or rules made thereunder.�.
4. For rule 6 of the said rules, the following rule shall be substituted, namely:-
“6. Determination of point of taxation in case of continuous supply of service.-Notwithstanding anything contained in rules 3,4 or 8, in case of continuous supply of service, the ‘point of taxation’ shall be,-
(a) the time when the invoice for the service provided or to be provided is issued:
Provided that where the invoice is not issued within fourteen days of the completion of the provision of the service, the point of taxation shall be date of such completion.
(b) in a case, where the person providing the service, receives a payment before the time specified in clause (a), the time, when he receives such payment, to the extent of such payment.
Explanation 1. – For the purpose of this rule, where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of a contract, which requires the service receiver to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service.
Explanation 2.- For the purpose of this rule, wherever any advance, by whatever name known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance.�.
5. For rule 7, the following rule shall be substituted, namely:-
“7. Determination of point of taxation in case of specified services or persons.-Notwithstanding anything contained in these rules, the point of taxation in respect of,-
(a) the services covered by sub-rule (1) of rule 3 of Export of Services Rules, 2005;
(b) the persons required to pay tax as recipients under the rules made in this regard in respect of services notified under sub-section (2) of section 68 of the Finance Act, 1994;
(c) individuals or proprietary firms or partnership firms providing taxable services referred to in sub-clauses (p), (q), (s), (t), (u), (za), (zzzzm) of clause (105) of section 65 of the Finance Act, 1994,
shall be the date on which payment is received or made, as the case may be:
Provided that in case of services referred to in clause (a), where payment is not received within the period specified by the Reserve Bank of India, the point of taxation shall be determined, as if this rule does not exist.
Provided further that in case of services referred to in clause (b) where the payment is not made within a period of six months of the date of invoice, the point of taxation shall be determined as if this rule does not exist.
Provided also that in case of “associated enterprises�, where the person providing the service is located outside India, the point of taxation shall be the date of credit in the books of account of the person receiving the service or date of making the payment whichever is earlier.
6. For rule 9, the following rule shall be substituted, namely:-
“9. Transitional Provisions.- Nothing contained in this sub-rule shall be applicable,-
(i) where the provision of service is completed; or
(ii) where invoices are issued prior to the date on which these rules come into force.
Provided that services for which provision is completed on or before 30th day of June, 2011 or where the invoices are issued upto the 30th day of June, 2011, the point of taxation shall, at the option of the taxpayer, be the date on which the payment is received or made as the case may be.�.
F.No. 334/3/2011–TRU
(SAMAR NANDA)
Under Secretary to the Government of India
Note : – The principal notification No. 18/2011-Service Tax, dated the 1st March 2011, published in the Gazette of India, Extraordinary, vide number G.S.R.175(E), dated the 1st March, 2011
INCREASE IN BANK STATUTORY BRANCH AUDIT FEES
AFTER A LONG PERUSAL THE RBI HAS FINALLY DECIDED TO INCREASE
THE STATUTORY BANK BRANCH AUDIT FEES BY 10% FOR THE
FINANCIAL YEAR ENDED 31-03-2011
source:
CA Sachin Gupta
C/o B.K. GUPTA & CO.
Chartered Accountants
A-214, Indira Nagar,
Lucknow-226016
Vacancy for experienced and fresher CA
Required CA freshers as well as CA final students immediately at our Latur ofice urgently.Interested persons may please contact.
CA Sunil Kocheta
9890045503
9422072849
Latur
CA Sunil Kocheta
9890045503
9422072849
Latur
Amendment to Schedule VI
Amendment to Schedule VI
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION3, SUB-SECTION (ii)]
GOVERNMENT OF INDIA
Ministry of Corporate Affairs
NOTIFICATION
New Delhi, dated the 2011
G.S.R (E)- In exercise of the powers conferred by clause(a) of sub-section(1) of section 642 read with sub-section(1) of section 210A and sub-section (3C) of section 211 of the Companies Act,1956, (1 of 1956), the Central Government hereby makes the following amendment to paragraph 2 of the notification No.447(E) dated the 28th February,2011.:-
“ The notification shall come into force for the Balance Sheet and Profit and Loss Account to be prepared for the financial year commencing on or after 1.4.2011”.
[F. No. 2/6/2008-C.L-V]
Avinash K. Srivastava
Joint Secretary
NBFCs not to be Partners in Partnership firms
NBFCs not to be Partners in Partnership firms
RBI/2010-11/453
DNBS.PD/ CC.NO. 214/03.02.002/2010-11
DNBS.PD/ CC.NO. 214/03.02.002/2010-11
March 30, 2011
All NBFCs
Dear Sir,
NBFCs not to be Partners in Partnership firms
It has come to the notice of the Reserve Bank of India that some NBFCs have large investments in / have contributed capital to partnership firms.
2. In view of the risks involved in NBFCs associating themselves with partnership firms, it has been decided to prohibit NBFCs from contributing capital to any partnership firm or to be partners in partnership firms. In cases of existing partnerships, NBFCs may seek early retirement from the partnership firms.
3. Copies of Amending Notifications No. DNBS.227/CGM (US)-2011 and No. DNBS.228/ CGM (US)-2011 dated March 30, 2011 are enclosed for meticulous compliance.
Yours sincerely,
(Uma Subramaniam)
Chief General Manager-in-Charge
Chief General Manager-in-Charge
Encl: as above
RESERVE BANK OF INDIA
DEPARTMENT OF NON-BANKING SUPERVISION
CENTRAL OFFICE
CENTRE I, WORLD TRADE CENTRE,
CUFFE PARADE, COLABA,
MUMBAI 400 005.
DEPARTMENT OF NON-BANKING SUPERVISION
CENTRAL OFFICE
CENTRE I, WORLD TRADE CENTRE,
CUFFE PARADE, COLABA,
MUMBAI 400 005.
Notification no. DNBS.227 / CGM(US)-2011 dated March 30, 2011
The Reserve Bank of India, having considered it necessary in public interest and being satisfied that, for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to amend the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (hereinafter referred to as the said Directions) contained in Notification No. DNBS. 192/DG(VL)-2007 dated February 22, 2007, in exercise of the powers conferred by section 45JA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, hereby directs that the said Directions shall be amended with immediate effect as follows-
Insertion of new paragraph 19 A-
After paragraph 19 of the said Directions, the following paragraph 19A shall be inserted.
"NBFCs not to be partners in partnership firms"
19A. (1) No non-banking financial company, which is accepting public deposit shall contribute to the capital of a partnership firm or become a partner of such firm.
(2) A non-banking financial company, which is accepting public deposit and which had already contributed to the capital of a partnership firm or was a partner of a partnership shall seek early retirement from the partnership firm.
(Uma Subramaniam)
Chief General Manager
Chief General Manager
RESERVE BANK OF INDIA
DEPARTMENT OF NON-BANKING SUPERVISION
CENTRAL OFFICE
CENTRE I, WORLD TRADE CENTRE,
CUFFE PARADE, COLABA,
MUMBAI 400 005.
DEPARTMENT OF NON-BANKING SUPERVISION
CENTRAL OFFICE
CENTRE I, WORLD TRADE CENTRE,
CUFFE PARADE, COLABA,
MUMBAI 400 005.
Notification no. DNBS. 228 / CGM(US)-2011 dated March 30, 2011
The Reserve Bank of India, having considered it necessary in public interest and being satisfied that, for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to amend the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (hereinafter referred to as the said Directions) contained in Notification No. DNBS. 193/DG(VL)-2007 dated February 22, 2007, in exercise of the powers conferred by section 45JA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, hereby directs that the said Directions shall be amended with immediate effect as follows, namely -
Insertion of new paragraph 20 A-
After paragraph 20 of the said Directions, the following paragraph 20A shall be inserted.
"NBFCs not to be partners in partnership firms"
20A. (1) No non-banking financial company shall contribute to the capital of a partnership firm or become a partner of such firm.
(2) A non-banking financial company, which had already contributed to the capital of a partnership firm or was a partner of a partnership firm shall seek early retirement from the partnership firm.
Chief General Manager
Consolidated FDI Policy (Effective from 1-4-2011)
Circular 1 of 2011 on FDI
Circular 1 of 2011, being released today, is the third edition of the Consolidated FDI Policy. One year has passed since the policy on Foreign Direct investment (FDI), was consolidated and released for the first time, effective 1.4.2010. At that time, Government had committed to updating this document every six months. The second edition was released, effective from 1.10.2011.
2. The following major changes have been incorporated in the latest consolidation:
(i) Pricing of Convertible instruments
(paragraph 3.2.1 of Circular 1 of 2011 ):
Instead of specifying the price of convertible instruments upfront, companies will now have the option of prescribing a conversion formula, subject to the FEMA/ SEBI guidelines on pricing. This would help the recipient companies in obtaining a better valuation based upon their performance.
(ii) Inclusion of fresh items for issue of shares against non-cash considerations
(paragraph 3.4.6 of Circular 1 of 2011 ):
The existing policy provides for conversion of only ECB/lump-sum fee/Royalty into equity. A discussion paper on the possibility and need for inclusion of additional items into equity had been released by DIPP in September, 2010. After stakeholder consultations, Government has now decided to permit issue of equity, under the Government route, in the following cases, subject to specific conditions:
(a) import of capital goods/ machinery/ equipment (including second-hand machinery)
(b) pre-operative/ pre-incorporation expenses (including payments of rent etc.)
This measure, which liberalises conditions for conversion of non-cash items into equity, is expected to significantly ease the conduct of business.
(iii) Removal of the condition of prior approval in case of existing joint ventures/ technical collaborations in the ‘same field”
(paragraph 4.2.2 of Circular 2 of 2010):
A discussion paper had been released by DIPP last year on the need for review of this condition. There is a felt need to attract fresh investment and technology inflows into the country, as also to reduce the levels of State intervention in the commercial sphere. Keeping in view the above, Government has decided to abolish this condition. It is expected that this measure will promote the competitiveness of India as an investment destination and be instrumental in attracting higher levels of FDI and technology inflows into the country.
(iv) Guidelines relating to down-stream investments
(paragraph 4.6 of Circular 1 of 2011 ):
The guidelines have been comprehensively simplified and rationalised. Companies have now been classified into only two categories – ‘companies owned or controlled by foreign investors’ and ‘companies owned and controlled by Indian residents’. The earlier categorisation of ‘investing companies’, ‘operating companies’ and ‘investing-cum-operating companies’ has been done away with.
(v) Development of Seeds
(paragraph 5.2.1 of Circular 1 of 2011):
Tuesday, March 29, 2011
Job Opportunity in General Accounting
A permanent position details are as follows.
Experience: Fixed Assets Management and Bank Reconciliation and some others accounting related work.
Qualification: ICMAP qualified or Patrially qualified upto Stage 4 can also apply
Gender: Female (Good Communication Skills/Sharp)
We are looking for a candidate with long term association. The requirement is top urgent and we have to fill the position immediately.
Send CVs at akifayat@engro.com
FINANCIAL FRAUD AND AUDITOR
As the auditor of Lehman Brothers, Ernst & Young approved the use of Repo 105 transactions. These transactions were characterized as sales of assets and created a misleading picture of Lehman's financial position during the financial meltdown. After nearly two years of wondering where the auditors were during the financial meltdown, New York State Governor Andrew M. Cuomo has finally provided some possible answers regarding the activities of the auditing firm for the now bankrupt Lehman Brothers. In September 2008, Lehman's bankruptcy represented the largest such filing in U.S. history and resulted in an immediate 500-point drop in the Dow-Jones Industrial Average. This previously highly prominent global financial services giant was one of the few Wall Street firms allowed to trade directly with the Federal Reserve System, and the group's members continue to be considered the most influential and powerful nongovernmental institutions in world financial markets. When he was New York's attorney general, Cuomo filed a lawsuit in late December 2010 in the New York Supreme Court claiming that Ernst & Young (E&Y), a Big 4 firm, helped hide Lehman's "fraudulent financial reporting." These acts were alleged to have occurred during a seven-year period leading up to the Lehman bankruptcy. What Lehman did and E&Y allegedly specifically approved was to consider some borrowing, done under agreements to later repurchase the notes, as a sale of an asset rather than a short-term borrowing arrangement. According to the attorney general's complaint, E&Y "substantially assisted Lehman to engage in a massive accounting fraud, involving the surreptitious removal of tens of billions of dollars of securities from its balance sheet." The complaint alleges this created a false impression of Lehman's better liquidity, thereby defrauding the investing public and violating New York law. "This practice was a house-of-cards business model designed to hide billions in liabilities in the years before Lehman collapsed," Cuomo said. He added, "Just as troubling, a global accounting firm tasked with auditing Lehman's financial statements helped hide this crucial information from the investing public." The specific mechanism used by Lehman and asserted to be approved by E&Y was to engage in what became known as Repo 105 transactions. These deals involved a transfer of liquid fixed income securities by Lehman to European counterparts for cash with the binding obligation they would be repurchased a few days or weeks later. The volume of Repo 105 transactions increased dramatically at the end of each calendar quarter. Contrary to the usual practice of accounting for repurchase agreements, or "repos," as short-term loans, Lehman characterized Repo 105 transactions as a sale of assets. By using the cash obtained from these "asset sales" at quarter- or year-end to pay down other debts, Lehman reduced the amount of total liabilities it reported and improved its reported leverage ratios and balance-sheet metrics. The firm rapidly accelerated its use of Repo 105 transactions in 2007 and early 2008 as the financial crisis grew and Lehman was facing demands to reduce its leverage. To date, the Securities & Exchange Commission (SEC) has neither taken any regulatory action against Lehman and its officers nor has it accused E&Y of violating any federal rules of accounting or auditing. The SEC did propose new rules on September 17, 2010, requiring public companies to provide increased information in both qualitative and quantitative terms about their short-term borrowings, including those having repurchase obligations. If adopted, these disclosures would be required in the Management's Discussion and Analysis (MD&A) section of their reports to the SEC. According to SEC Chair Mary Schapiro, "misleading 'window dressing' in quarterly reports" was one obstacle to investor confidence. A report issued in March 2010 by Lehman bankruptcy examiner Anton Valukas faults E&Y as well as Lehman senior executives. The report states that Lehman's financial statements were "materially misleading" and that executives engaged in "actionable balance sheet manipulation." The report also cites whistleblowers who attempted to correct what they viewed as improper behavior. Valukas believes that "there is sufficient evidence to support a colorable claim" that certain Lehman officers breached their fiduciary duties and that E&Y was professionally negligent. In a March 2010 letter to its clients, E&Y defended its audit work for Lehman. The letter states that Lehman's bankruptcy resulted from unprecedented adverse events in the financial markets, declining asset values, and loss of market confidence that caused a collapse in its liquidity. The firm believes the bankruptcy wasn't caused by accounting or disclosure issues, as Lehman's financial statements clearly portrayed it as "a leveraged entity operating in a risky and volatile industry." One possible justification for treating repo transactions as sales is contained in the infamous derivatives rule, Statement of Financial Accounting Standards (SFAS) No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." This lengthy document discusses the need for the transferor of securities to relinquish all control of securities in order to consider the transaction a sale. If the transferor receives collateral to secure the transaction at less than 102 percent of the amount transferred, then SFAS No. 140 concludes no real sale has taken place. In its transactions, Lehman believed the additional 3 percent that made the total collateralization 105 percent – hence the term "Repo 105" – demonstrated excess collateral and thus resulted in a true sale of securities in spite of the binding obligation to repurchase. SFAS No. 140 also calls for disclosure of the nature of any repurchase agreement transactions and the amounts and classification of collateral. But this requirement lacks specificity and led to later revisions to SFAS No. 140 and the very recent SEC requirement noted earlier. Lehman had footnote disclosure of off-balance-sheet commitments of almost $1 trillion, excluding the amount of Repo 105 liabilities, but no clear disclosure of the extent of repo transactions. In fact, the complaint filed by then Attorney General Cuomo asserts that Lehman reported that all of its repurchase agreements were treated as financing arrangements, not as sales. Another obstacle to calling Repo 105 transactions true sales is the fact that apparently Lehman was unable to get any U.S. law firm to provide a legal opinion that they were in fact true sales. A U.K. law firm did provide such an opinion but added the requirement that it be applied only to U.K. repo instruments. Yet Lehman didn't limit its application of the true sale doctrine to the U.K. Instead, the firm used one of its British subsidiaries to put very significant amounts of U.S. securities into the repo pool. Apparently E&Y didn't object to this stretch of circumstances. The most telling assertion in the complaint concerning E&Y's alleged misrepresentation of Lehman's compliance with applicable accounting standards is that E&Y didn't require the financial statements to reflect economic substance rather than just legal form. In other words, the complaint accuses E&Y of letting Lehman engage in transactions without business purpose in order to achieve a specific financial-statement result. This is similar to assertions made in the Enron case – that the auditor, Arthur Andersen, enriched itself by coaching Enron how best to structure transactions so they could remain off its balance sheet. An interesting aspect of the substance-over-form requirement is that it is contained in the auditing standards, specifically AU §411.06, not the accounting literature promulgated by the Financial Accounting Standards Board (FASB). As accounting standards setters work to converge international and U.S. pronouncements, little attention seems to be directed toward global convergence of audit standards. In the U.K., auditor opinions specifically state that the client's financial statements do in fact present a true and fair view, whereas U.S. audit standards only opine that statements are presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). It would seem that E&Y would have had more difficulty in expressing a U.K.-type opinion on Lehman. In summary, the ethical challenges faced by E&Y in deciding how to address issues with a long-standing and profitable client may be faced by many public accountants. In fact, accountants in all areas of the profession frequently face similar ethical issues of simultaneously complying with their duties for faithful service and loyalty to their employer or client while respecting their responsibilities to other stakeholders. "Doing the right thing" for all concerned may sometimes be an impossible assignment. Guidance such as the overarching principles of honesty, fairness, objectivity, and responsibility contained in the IMA Statement of Ethical Professional Practice will go a long way toward helping all accountants to do the right thing. Doing the right thing is always the best policy in the long run. About the author: Curtis C. Verschoor, CMA, is a member of the IMA Committee on Ethics. He is the Emeritus Ledger & Quill Research Professor at the School of Accountancy and MIS and an honorary Senior Wicklander Research Fellow in the Institute for Business and Professional Ethics, both at DePaul University, Chicago. He is also a Research Scholar in the Center for Business Ethics at Bentley University, Waltham, MA. His e-mail address is curtisverschoor@sbcglobal.net [3]. |
Jobs for Accountants
Person in Accounts looking for a job there are 2 vacancies for our clients on monthly salary Rs 9000/-.
The interested person can send their bio data at G. Sabharwal & Associates
Chartered Accountants
143/2 Chander Nagar, Alambagh, Lucknow - 226005, Uttar Pradesh, INDIA
(Wire Free) 9415108029, 9839272225 (LL) 0522 - 2464606, 4010040
Monday, March 28, 2011
Effects of IFRS on Financial Ratios
The Effects of IFRS on Financial Ratios: Early Evidence in Canada Backgrounder
This timely CGA-Canada publication examines the impact of
International Financial Reporting Standards (IFRS) on key financial
ratios of public Canadian companies as they transition to the new
financial reporting regime this year. IFRS replaces Canadian Generally
Accepted Accounting Principles (GAAP) for publicly accountable
enterprises and affects figures presented in financial statements. The
differences between IFRS and pre-changeover Canadian GAAP regimes may
lead to variances in financial ratios – the key indicators on which
investors rely to gauge a company’s financial performance. The
variances in ratios can impair the comparability and analysis of
historic trends. The report does point to opportunities to mitigate
these challenges. Companies are initially required to produce
statements using both sets of accounting standards.
Report highlights
Most of the ratios under IFRS are more volatile than those under
pre-changeover Canadian GAAP
Maximum values of several ratios are higher and minimum values are
lower under IFRS, although the effects of IFRS on means and medians of
ratios related to the financial condition of companies are not
statistically significant.
There is a significant difference in the distribution of values around
medians for such ratios as current and quick ratios, debt,
alternative-debt and equity ratios, interest coverage, fixed-charge
and cash-flow coverage, return on assets (ROA), comprehensive-ROA and
price-earnings related ratios.
The exact source of the increased volatility of ratios under IFRS
remains unclear. The causes may include the incremental adjustments
that are specific to IFRS, and those associated with the
principle-based approach that allows for more discretion and judgment
by management.
Differences between IFRS and pre-changeover Canadian GAAP do not
affect cash flows
The cash-flow statement is less influenced by accounting methods and
estimates, and serves as a sound basis of comparison.
The impact of IFRS is subject to the industry effect and how recently
the company transitioned to IFRS
Companies in the mining sector seem to have certain incentives to
early adoption of IFRS as early adopters primarily consist of
companies in this sector.
Under IFRS, profitability and coverage ratios of mining companies are
affected to a greater extent than the ratios of companies in other
sectors.
Companies that implemented IFRS more recently had lower profitability
than those that had been applying it for some time.
IFRS’ impact on financial ratios is driven by differences in
application of fair value accounting and consolidation, and several
other differences
Fair value accounting leads to adjustments in balance sheet figures,
direct allocation of some unrealized gains and losses to the income
statement, as well as allocation of other unrealized gains and losses
to other comprehensive income.
Liquidity and leverage ratios are affected by fair value accounting
practices due to balance sheet variations while profitability and
coverage ratios are affected due to balance sheet variations and
recognition of unrealized gains/losses.
The impact of consolidation on ratios is difficult to isolate as the
differences are incorporated or combined in the consolidated figures.
Incorporation of minority interest in equity also has a significant
impact on financial statements, directly affecting profitability and
leverage ratios.
A number of other differences between IFRS and pre-changeover Canadian
GAAP impact financial ratios. Leverage and profitability ratios are
sensitive to the differences in impairment test procedures applied to
long-lived assets, as well as to the impact on liabilities, expenses
and equity caused by the differences in application of standards on
leases, pensions and contingencies, and share-based payments.
Specific characteristics differentiate IFRS from other accounting regimes
IFRS is principle-based; it gives more importance to substance (over
form) and allows management to use greater discretion and flexibility
in choosing accounting methods and estimates when preparing financial
statements.
Fair value accounting responds to investors’ needs for information
that reflects market-based values, but involves varying degrees of
subjectivity. Since investors need market-based values to make
decisions regarding buying or selling stocks, many items in financial
statements are required or eligible for fair value accounting under
IFRS.
Comprehensive income reflects revenues, expenses, gains and losses
recognized during a specified time period. It is summarized in a
separate financial statement made up of two parts; one corresponding
to the bottom line (profit or loss) of the income statement and the
other – called other comprehensive income (OCI) – relating to fair
value adjustments.
The entity theory underlies consolidation requiring assets and
liabilities of acquired subsidiaries and minority interests to be
measured at fair value. Under IFRS, the share of profit allocated to
minority interest is recognized directly in equity rather than income.
IFRS improves transparency and completeness of financial statements,
yet can lead to information overload as accompanying notes are
abundant and complex.
Recommendations
Analysts should continue to be cautious when examining financial
ratios during the transition to IFRS in Canada.
Financial statement users need to be aware of the main features of
IFRS that differ from pre-changeover Canadian GAAP and distinguish
between reported performance changes caused by the transition to IFRS
from those caused by changes in the business.
Relying on cash-flow analysis is recommended, particularly in cases
when accounting practices are subject to uncertainty or discretion of
management. Another possible solution may lie in recalculating ratios
using IFRS retroactive information presented in the year of
transition.
Financial statement users are advised to verify the uniformity of
underlying figures when using gross profit and operating profit
margins in profitability analysis.
The use of comprehensive-ROA (return on assets) and comprehensive ROE
(return on equity) is recommended to enhance comparability when
analyzing comprehensive income. These represent an adaptation of the
standard ROA/ROE calculations which substitute comprehensive income as
the numerator
This timely CGA-Canada publication examines the impact of
International Financial Reporting Standards (IFRS) on key financial
ratios of public Canadian companies as they transition to the new
financial reporting regime this year. IFRS replaces Canadian Generally
Accepted Accounting Principles (GAAP) for publicly accountable
enterprises and affects figures presented in financial statements. The
differences between IFRS and pre-changeover Canadian GAAP regimes may
lead to variances in financial ratios – the key indicators on which
investors rely to gauge a company’s financial performance. The
variances in ratios can impair the comparability and analysis of
historic trends. The report does point to opportunities to mitigate
these challenges. Companies are initially required to produce
statements using both sets of accounting standards.
Report highlights
Most of the ratios under IFRS are more volatile than those under
pre-changeover Canadian GAAP
Maximum values of several ratios are higher and minimum values are
lower under IFRS, although the effects of IFRS on means and medians of
ratios related to the financial condition of companies are not
statistically significant.
There is a significant difference in the distribution of values around
medians for such ratios as current and quick ratios, debt,
alternative-debt and equity ratios, interest coverage, fixed-charge
and cash-flow coverage, return on assets (ROA), comprehensive-ROA and
price-earnings related ratios.
The exact source of the increased volatility of ratios under IFRS
remains unclear. The causes may include the incremental adjustments
that are specific to IFRS, and those associated with the
principle-based approach that allows for more discretion and judgment
by management.
Differences between IFRS and pre-changeover Canadian GAAP do not
affect cash flows
The cash-flow statement is less influenced by accounting methods and
estimates, and serves as a sound basis of comparison.
The impact of IFRS is subject to the industry effect and how recently
the company transitioned to IFRS
Companies in the mining sector seem to have certain incentives to
early adoption of IFRS as early adopters primarily consist of
companies in this sector.
Under IFRS, profitability and coverage ratios of mining companies are
affected to a greater extent than the ratios of companies in other
sectors.
Companies that implemented IFRS more recently had lower profitability
than those that had been applying it for some time.
IFRS’ impact on financial ratios is driven by differences in
application of fair value accounting and consolidation, and several
other differences
Fair value accounting leads to adjustments in balance sheet figures,
direct allocation of some unrealized gains and losses to the income
statement, as well as allocation of other unrealized gains and losses
to other comprehensive income.
Liquidity and leverage ratios are affected by fair value accounting
practices due to balance sheet variations while profitability and
coverage ratios are affected due to balance sheet variations and
recognition of unrealized gains/losses.
The impact of consolidation on ratios is difficult to isolate as the
differences are incorporated or combined in the consolidated figures.
Incorporation of minority interest in equity also has a significant
impact on financial statements, directly affecting profitability and
leverage ratios.
A number of other differences between IFRS and pre-changeover Canadian
GAAP impact financial ratios. Leverage and profitability ratios are
sensitive to the differences in impairment test procedures applied to
long-lived assets, as well as to the impact on liabilities, expenses
and equity caused by the differences in application of standards on
leases, pensions and contingencies, and share-based payments.
Specific characteristics differentiate IFRS from other accounting regimes
IFRS is principle-based; it gives more importance to substance (over
form) and allows management to use greater discretion and flexibility
in choosing accounting methods and estimates when preparing financial
statements.
Fair value accounting responds to investors’ needs for information
that reflects market-based values, but involves varying degrees of
subjectivity. Since investors need market-based values to make
decisions regarding buying or selling stocks, many items in financial
statements are required or eligible for fair value accounting under
IFRS.
Comprehensive income reflects revenues, expenses, gains and losses
recognized during a specified time period. It is summarized in a
separate financial statement made up of two parts; one corresponding
to the bottom line (profit or loss) of the income statement and the
other – called other comprehensive income (OCI) – relating to fair
value adjustments.
The entity theory underlies consolidation requiring assets and
liabilities of acquired subsidiaries and minority interests to be
measured at fair value. Under IFRS, the share of profit allocated to
minority interest is recognized directly in equity rather than income.
IFRS improves transparency and completeness of financial statements,
yet can lead to information overload as accompanying notes are
abundant and complex.
Recommendations
Analysts should continue to be cautious when examining financial
ratios during the transition to IFRS in Canada.
Financial statement users need to be aware of the main features of
IFRS that differ from pre-changeover Canadian GAAP and distinguish
between reported performance changes caused by the transition to IFRS
from those caused by changes in the business.
Relying on cash-flow analysis is recommended, particularly in cases
when accounting practices are subject to uncertainty or discretion of
management. Another possible solution may lie in recalculating ratios
using IFRS retroactive information presented in the year of
transition.
Financial statement users are advised to verify the uniformity of
underlying figures when using gross profit and operating profit
margins in profitability analysis.
The use of comprehensive-ROA (return on assets) and comprehensive ROE
(return on equity) is recommended to enhance comparability when
analyzing comprehensive income. These represent an adaptation of the
standard ROA/ROE calculations which substitute comprehensive income as
the numerator
Model paper on Advanced Auditing for CA Final may 2011
Here is a model paper on Advanced Auditing for CA Final students
preparing for the forthcoming exams.
1. Give your views on the following:
(a) Alpha Ltd subscribes for 100,000 equity shares of Rs10 each of
Beta Ltd., of which Rs 7 is paid up at a total cost of Rs 7,00,000.
Alpha Ltd proposes to show the investments at the book value of Rs
1,000,000 and disclose the uncalled amount of Rs 3,00,000 as a current
liability.
(b) A power project in the construction stage raised funds for its
project through a public issue and placed a part of the funds in a
fixed deposit with a nationalszed bank. Interest on such fixed deposit
for the year ended 31.03.2011 is Rs7.000.000. The Assessing officer
proposes penalty against the company for not subjecting the Accounts
to tax audit u/s. 44AB
(c) A private limited Ccmpany promoted by the spouse and children of a
partner of a firm of Chartered Accountants is appointed as internal
auditors of a public limited company audited by the firm.
(d) A company calculates income tax payable by it for the Assessment
year 2011/12 at Rs 10.00 lakh. It
has TDS of Rs 3.00 lakh and paid Advance Tax of Rs 6.50 laks. How
would disclose it in the Financial Statements as on 31.03.2011?
2. Determine if the following circumstances constitute any
professional misconduct.
(a) A chartered accountant with a certificate of practice and employed
in a firm of chartered accountants takes up audit of branches of a
bank in his name.
(b) The spouse of a practising chartered accountant heads the credit
department of a private sector bank. The CA is assigned the job of
credit appraisal of applicants for loans.
(c) A CA opens offices at two localities of a city, which are 70 km
apart and heads both the offices.
(d) A CA operates a web site, which provides links to the Ministry of
Company Affairs, income-tax department and to a private sector bank
which facilitates direct payment of income tax and dues to the MCA
3. (a) How do you audit conversion of debentures in to equity?
(b) You are appointed at the Annual General Meeting as the statutory
auditor under Companies Act and also Tax audit under the Income-Tax
Act. How do you react?
(c) When you are appointed as the auditor in place of another auditor,
what points do you consider to avoid unpleasantness?
4. (a) What points do you consider while taking up audit of borrowers
of a bank?
(b) What are the special points to be considered in the audit of a
multi state co-operative society?
5. A manufacturer of cars is contemplating to set up a facility for
the manufacture of tyres for the cars. You are required to assess the
viability of the same and carry out a management audit. Prepare a
management audit questionnaire.
6. (a) Trade by a stock broker for himself poses a problem while
carrying out the audit of stock brokers. Comment.
(b) Due diligence audit is required only at the time of mergers and
acquisitions. Do you agree?
(c) You are appointed as auditor u/s. 142(2A) of the Income-Tax Act.
Whom do you report to? How is the audit fee determined and who pays
the same. Do you need to communicate to the statutory auditor of the
Company?
7. (a) What is energy audit? What are the aims and objectives of the same?
(b) A nationalised bank directs its branches to pay professional tax
on the receipt of notice from the Government. The bank contends that
it is not a prior period item. Do you agree? Give reasons.
(c) Discuss the role of the Insurance Regulatory and Development
Authority (IRDA) in the context of audit of insurance companies.
8. Write short notes on any four of the following
(a) Negative confirmations
(b) Management representation
(c) Subsequent events
(d) Audit estimates
(e) Form 3 CB
(The author is a Hyderabad-based chartered accountant.)
preparing for the forthcoming exams.
1. Give your views on the following:
(a) Alpha Ltd subscribes for 100,000 equity shares of Rs10 each of
Beta Ltd., of which Rs 7 is paid up at a total cost of Rs 7,00,000.
Alpha Ltd proposes to show the investments at the book value of Rs
1,000,000 and disclose the uncalled amount of Rs 3,00,000 as a current
liability.
(b) A power project in the construction stage raised funds for its
project through a public issue and placed a part of the funds in a
fixed deposit with a nationalszed bank. Interest on such fixed deposit
for the year ended 31.03.2011 is Rs7.000.000. The Assessing officer
proposes penalty against the company for not subjecting the Accounts
to tax audit u/s. 44AB
(c) A private limited Ccmpany promoted by the spouse and children of a
partner of a firm of Chartered Accountants is appointed as internal
auditors of a public limited company audited by the firm.
(d) A company calculates income tax payable by it for the Assessment
year 2011/12 at Rs 10.00 lakh. It
has TDS of Rs 3.00 lakh and paid Advance Tax of Rs 6.50 laks. How
would disclose it in the Financial Statements as on 31.03.2011?
2. Determine if the following circumstances constitute any
professional misconduct.
(a) A chartered accountant with a certificate of practice and employed
in a firm of chartered accountants takes up audit of branches of a
bank in his name.
(b) The spouse of a practising chartered accountant heads the credit
department of a private sector bank. The CA is assigned the job of
credit appraisal of applicants for loans.
(c) A CA opens offices at two localities of a city, which are 70 km
apart and heads both the offices.
(d) A CA operates a web site, which provides links to the Ministry of
Company Affairs, income-tax department and to a private sector bank
which facilitates direct payment of income tax and dues to the MCA
3. (a) How do you audit conversion of debentures in to equity?
(b) You are appointed at the Annual General Meeting as the statutory
auditor under Companies Act and also Tax audit under the Income-Tax
Act. How do you react?
(c) When you are appointed as the auditor in place of another auditor,
what points do you consider to avoid unpleasantness?
4. (a) What points do you consider while taking up audit of borrowers
of a bank?
(b) What are the special points to be considered in the audit of a
multi state co-operative society?
5. A manufacturer of cars is contemplating to set up a facility for
the manufacture of tyres for the cars. You are required to assess the
viability of the same and carry out a management audit. Prepare a
management audit questionnaire.
6. (a) Trade by a stock broker for himself poses a problem while
carrying out the audit of stock brokers. Comment.
(b) Due diligence audit is required only at the time of mergers and
acquisitions. Do you agree?
(c) You are appointed as auditor u/s. 142(2A) of the Income-Tax Act.
Whom do you report to? How is the audit fee determined and who pays
the same. Do you need to communicate to the statutory auditor of the
Company?
7. (a) What is energy audit? What are the aims and objectives of the same?
(b) A nationalised bank directs its branches to pay professional tax
on the receipt of notice from the Government. The bank contends that
it is not a prior period item. Do you agree? Give reasons.
(c) Discuss the role of the Insurance Regulatory and Development
Authority (IRDA) in the context of audit of insurance companies.
8. Write short notes on any four of the following
(a) Negative confirmations
(b) Management representation
(c) Subsequent events
(d) Audit estimates
(e) Form 3 CB
(The author is a Hyderabad-based chartered accountant.)
Sunday, March 27, 2011
Auditor raps India's ONGC over 'inflated' claims
NEW DELHI (March 27, 2011) : India's auditor has rapped state-run
ONGC over its $2.12 billion purchase of Imperial Energy, saying
unrealistic output forecasts were made to justify the energy giant's
costliest ever acquisition. The harshly-worded condemnation comes only
months before Oil and Natural Gas Corp (ONGC) is slated to hold a
share sale targeted to raise around $2.7 billion for government
coffers.
The government auditor said Russia-focused Imperial, whose main assets
are in the Tomskh region of east Russia, has produced lower than
projected output and its oil reserves had been inflated. London-listed
Imperial has been able to achieve production of only 15,803 barrels of
oil per day (bpd) as against the envisaged production levels of 35,000
bpd (at the time of acquisition), the Comptroller and Auditor General
said in its report tabled in parliament late Friday,
The shortfall had caused a loss of 11.8 billion rupees or $265 million
on top of several billions dollars in losses stemming from
unproductive exploration of assets. ONGC still has "to succeed as an
(energy) operator", the report said. ONGC Videsh Ltd, the overseas arm
of ONGC, acquired Russia-focused Imperial Energy in January 2009 for
$2.12 billion, making it the company's most expensive acquisition
ever.
ONGC had to reduce the proven reserve size of the asset during 2009-10
by 1.53 million tons "indicating the inflated size of reserves
estimated by the company at the time of its acquisition", the auditor
general said. "The fact the company even now is not in a position to
generate a realistic production profile and bring out an economic
analysis confirms all the problems associated with these fields were
not properly assessed," the report said.
Investors are already nervous about India's raft of financial scandals
and analysts say the damning report could jeopardise the government's
plans to sell off a five percent stake in ONGC sometime mid-year. The
report criticising ONGC comes after the auditor last year stirred a
massive controversy by saying the government's cut-rate sale of mobile
licences had cost the public treasury up to $40 billion.
ONGC over its $2.12 billion purchase of Imperial Energy, saying
unrealistic output forecasts were made to justify the energy giant's
costliest ever acquisition. The harshly-worded condemnation comes only
months before Oil and Natural Gas Corp (ONGC) is slated to hold a
share sale targeted to raise around $2.7 billion for government
coffers.
The government auditor said Russia-focused Imperial, whose main assets
are in the Tomskh region of east Russia, has produced lower than
projected output and its oil reserves had been inflated. London-listed
Imperial has been able to achieve production of only 15,803 barrels of
oil per day (bpd) as against the envisaged production levels of 35,000
bpd (at the time of acquisition), the Comptroller and Auditor General
said in its report tabled in parliament late Friday,
The shortfall had caused a loss of 11.8 billion rupees or $265 million
on top of several billions dollars in losses stemming from
unproductive exploration of assets. ONGC still has "to succeed as an
(energy) operator", the report said. ONGC Videsh Ltd, the overseas arm
of ONGC, acquired Russia-focused Imperial Energy in January 2009 for
$2.12 billion, making it the company's most expensive acquisition
ever.
ONGC had to reduce the proven reserve size of the asset during 2009-10
by 1.53 million tons "indicating the inflated size of reserves
estimated by the company at the time of its acquisition", the auditor
general said. "The fact the company even now is not in a position to
generate a realistic production profile and bring out an economic
analysis confirms all the problems associated with these fields were
not properly assessed," the report said.
Investors are already nervous about India's raft of financial scandals
and analysts say the damning report could jeopardise the government's
plans to sell off a five percent stake in ONGC sometime mid-year. The
report criticising ONGC comes after the auditor last year stirred a
massive controversy by saying the government's cut-rate sale of mobile
licences had cost the public treasury up to $40 billion.
Saturday, March 26, 2011
Revised Schedule VI to be effective from 1st April 2011
Ministry of Corporate Affairs through its site www.mca.gov.in has conveyed that Revised Schedule VI shall be effective from 1st April 2011. This implies that application of revised Schedule VI has been postponed by one year. For details please visit the abovementioned site for reference.
Compulsory Attendance of Professional Development Programmes by the Members
The Council of the Institute at its 200th Meeting held on March 18, 2011 at New Delhi amended the Guidelines for Compulsory Attendance of Professional Development Programmes by the Members to provide as under:
| | Next block of three years | April 01, 2011 to March 31, 2014 |
| | Min. number of Programme Credit Hours (PCH) to be acquired by Members in Practice | 15 PCH in each year or 50 PCH in a block of three years w.e.f April 01, 2011 |
| | Min. number of PCH to be acquired by Members in Employment (i.e. members in whose name Form 32 has been filed to work as Company Secretary under the provisions of Sec. 383A of the Companies Act, 1956) | 10 PCH in each year or 35 PCH in a block of three years w.e.f April 01, 2011 |
| | Min. number of PCH to be acquired by Members above the age of 60 years | Presently the members of the age of 65 years are not required to obtain PCH. This age limit stands reduced to 60 years and the members above the age of 60 years shall be required to obtain 50% of the PCH required to be obtained by the members below 60 years w.e.f April 01, 2011. |
| | Members failing to obtain the mandatory PCH upto March 31, 2011 | Provided with a shortfall upto 10 PCH and required to compensate by obtaining atleast 5 additional PCH on pro rata basis in the first year of the next block of three years commencing from April 01, 2011. |
| | Members who have not obtained any PCH during the block ending on March 31, 2011 | Members seeking renewal of CoP to provide an explanation for non compliance with the Guidelines – to be decided on case to case basis. |
Amendments in the Companies(Director's Identification Number) Rules, 2006
For downloading the amendments please click here
Friday, March 25, 2011
Vice President - Treasury in Mumbai
Elixir Consulting has been retained by our MNC Banking client to fill Vice President – Treasury position ASAP to ba based out of Mumbai. CTC Offered would be 35-40 Lacs Per annum.
A brief JD is as follows:
This position will lead the Regional Treasury Reporting Operations for EMEA and support North America, as necessary, in addition to helping with consolidation of global Treasury Reporting as it relates to the region. This position will drive execution of projects from receiver's perspective and work with Global Treasury Reporting Head to build capabilities in developing sustainable reporting operations for the region. The position will also be responsible for managing day to day operations relating to Treasury Reporting for the region and processes in scope.
Additional Objectives:
- Project Management: Planning and execution of all Treasury Reporting initiatives within the region, including support for global projects
- Quality & Transformation: Drive reengineering to improve data quality and process efficiency. Provide active support to the FRO Global Treasury Reporting Head in process and data standardization, MIS development and Implementation of standard solutions.
- Risk and Control: Continuous focus on compliance and control
This position will closely interact with Risk, Treasury and Finance seniors in the EMEA Region and with FRO Global Treasury Reporting Head to deliver against FRO tasks in a timely and accurate manner. This individual will provide support to the Global FRO Treasury Reporting Head in driving and implementing regional Treasury Reporting initiatives, including transition of Reporting processes into FRO. The ideal candidate needs to have relevant experience in Liquidity Reporting and Interest Risk Reporting (either in Treasury, Risk or Product Control functions), ability to think strategically, manage ambiguity, handle multiple priorities,, and confidence in dealing with senior leaders.
Type of Work: The job requires detailed understanding of Liquidity and Interest Rate Risk reporting function. Requires an ability to understand and follow the strategic direction charted by FRO Global Treasury Reporting Lead. An ability to think independently and identify opportunities for reengineering and process efficiency. Excellent communication skills required, both written and verbal.
Overall Competencies and Leadership Qualities
- Ability to think strategically and independently
- Manage multiple priorities and handling ambiguity
- Prior experience of dealing with senior leaders in the company
- Background in Treasury, Risk and/or Product Control
- Quick study – should be able to rapidly absorb the information and propose potential solutions
- Execution focused – absolute result orientation - and attention to details
- Pleasant and team player – can work with multiple stakeholders with minimum authority
- Can work in a matrix environment with limited guidance
- Excellent communication skills – verbal and written
- Finance Experience with knowledge of Balance Sheet Management, Liquidity and Interest Risk
- Experience working with complex data (sourcing, aggregation, organization, analysis and reporting)
- Experience in process reengineering, transformation initiatives and driving value
- Cultural sensitivity and ability to effectively work in virtual/ remote environment
- Excellent Excel and PowerPoint skills – advanced skills needed
- Experience working in shared services environment OR knowledge of the dynamics of work migration and project management
- Consulting / customer –facing experience highly desirable
8-12 years of experience working in large Financial Services/ Banking/ top consulting firms preferred
If your profile matches with the same and if you are willing to work in a top Notch MNC Banking organization kindly send your resume ASAP with the details like Current and expected ctc, notice period etc to take it further.
Elixir | RPO, Executive Search, Staffing, Search & Selection
www.elixir-consulting.com
Phone: 91-080-42913403| Mobile No - 8050334022 |
www.elixir-consulting.com
Phone: 91-080-42913403| Mobile No - 8050334022 |
GLOBAL REPORTING GUIDELINES UPDATED
Sustainability reporting: most complete guidance ever
The most comprehensive and complete sustainability reporting guidance
is now available, as the Global Reporting Initiative (GRI) launches
its G3.1 Sustainability Reporting Guidelines today (23 March 2011).
GRI is a network-based non-governmental organization that aims to make
sustainability reporting common practice. GRI produces the world’s
most widely used Sustainability Reporting Guidelines to enable the
drive towards greater transparency. GRI is committed to continuously
improving and increasing the use of the Guidelines, which are freely
available to the public.
An increasing number of companies are producing reports on their
non-financial performance, enabling their stakeholders to understand
the company’s impact on the economy, the environment and on society.
The guidance released today is the completion of GRI’s current
generation of Sustainability Reporting Guidelines. The G3.1 Guidelines
feature up to date guidance on issues that are critical in today’s
society – human rights, gender and community.
GRI is also launching guidance to help companies determine what to
measure and report on. The Technical Protocol – Applying the Report
Content Principles will enable organizations to produce relevant
reports more easily.
Nelmara Arbex, Deputy Chief Executive of the Global Reporting
Initiative, said: “We are very pleased to be launching the GRI G3.1
Guidelines today. Another important achievement is the new Technical
Protocol, which will help companies determine what to report on.
Together, the Protocol and the new guidance in G3.1 will enable all
organizations to be transparent about a wide range of important, but
often neglected, issues.”
Organizations that are already reporting on their sustainability
performance are entitled to use the current G3 Guidelines or the
updated G3.1 Guidelines. Both versions remain valid until the next
generation of GRI Guidelines is in place. This next generation is due
to be launched in 2013 and will be the only valid version of the
Guidelines in 2015.
While G3-based reporting remains valid, GRI recommends that reporters
use G3.1, the most comprehensive reporting guidance available today.
G3.1 enables organizations to be transparent about a wider range of
sustainability issues. New reporters should begin their reporting
journey by following G3.1.
GRI is currently planning updates to its support materials, including
Learning Publications, in line with the updated Guidelines. G3.1 will
be translated into Spanish, Portuguese and Mandarin Chinese, and these
versions are expected to be ready later this year.
The most comprehensive and complete sustainability reporting guidance
is now available, as the Global Reporting Initiative (GRI) launches
its G3.1 Sustainability Reporting Guidelines today (23 March 2011).
GRI is a network-based non-governmental organization that aims to make
sustainability reporting common practice. GRI produces the world’s
most widely used Sustainability Reporting Guidelines to enable the
drive towards greater transparency. GRI is committed to continuously
improving and increasing the use of the Guidelines, which are freely
available to the public.
An increasing number of companies are producing reports on their
non-financial performance, enabling their stakeholders to understand
the company’s impact on the economy, the environment and on society.
The guidance released today is the completion of GRI’s current
generation of Sustainability Reporting Guidelines. The G3.1 Guidelines
feature up to date guidance on issues that are critical in today’s
society – human rights, gender and community.
GRI is also launching guidance to help companies determine what to
measure and report on. The Technical Protocol – Applying the Report
Content Principles will enable organizations to produce relevant
reports more easily.
Nelmara Arbex, Deputy Chief Executive of the Global Reporting
Initiative, said: “We are very pleased to be launching the GRI G3.1
Guidelines today. Another important achievement is the new Technical
Protocol, which will help companies determine what to report on.
Together, the Protocol and the new guidance in G3.1 will enable all
organizations to be transparent about a wide range of important, but
often neglected, issues.”
Organizations that are already reporting on their sustainability
performance are entitled to use the current G3 Guidelines or the
updated G3.1 Guidelines. Both versions remain valid until the next
generation of GRI Guidelines is in place. This next generation is due
to be launched in 2013 and will be the only valid version of the
Guidelines in 2015.
While G3-based reporting remains valid, GRI recommends that reporters
use G3.1, the most comprehensive reporting guidance available today.
G3.1 enables organizations to be transparent about a wider range of
sustainability issues. New reporters should begin their reporting
journey by following G3.1.
GRI is currently planning updates to its support materials, including
Learning Publications, in line with the updated Guidelines. G3.1 will
be translated into Spanish, Portuguese and Mandarin Chinese, and these
versions are expected to be ready later this year.
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