New Delhi: Amid the global financial pressures, the Ministry of Corporate Affairs wants expeditious notification on standards on financial instruments like derivatives so that companies make proper disclosure of such exposures in their account books.
“The ministry has asked the National Advisory Committee on Accounting Standard (NACAS) to speed up the work on the notification of AS 30, 31 and 32 and probably within a month’s time it will have its final meeting on these standards,” a senior ministry official told PTI here.
These accounting standards, which are initially recommendatory in nature and will become mandatory after 2011, will need companies to make disclosure of such instruments in their financial statements.
The ministry has sought the Reserve Bank’s advice on the transition period because banking and non-banking financial companies and financial institutions will be the most-affected after the notification of standards, the official added.
The official added that the exposure of India Inc in the global financial crisis is not large, so at present the ministry is not mulling on making these standards mandatory from its very inception.
Because of multilayered derivatives erstwhile gigantic financial institutions in the United States had to pack up and still it is not clear what would be the total amount of loss due to financial crisis and which other institutions will succumb to it.