ICAI wants companies to be more open on welfare goals1 min read . Updated: 13 Feb 2020, 07:53 PM IST
- ICAI to set up an in-house ‘sustainable accounting standards board’ to frame suggestions on greater disclosures by the companies
- ICAI to also share board’s recommendations with the global accounting rule maker IASB
NEW DELHI : Accounting standard setter Institute of Chartered Accountants of India (ICAI) is set to recommend greater disclosure by companies on how they are helping to meet sustainable development goals, ICAI president Atul Kumar Gupta said at a briefing here.
ICAI will first set up an in-house ‘sustainable accounting standards board’ with members from all economic regulators to frame suggestions regarding what more disclosure should companies make in this context and will share that with the global accounting rule maker International Accounting Standards Board (IASB) for adoption, explained Gupta.
It is a slightly adapted version of IASB’s International Financial Reporting Standards (IFRS) that is implemented in India under the name ‘Ind AS’ for financial reporting by companies.
“The (in-house) board will work on identifying what needs to be reported to achieve sustainable development goals," said Gupta. Once the global accounting rule setter adopts these recommendations, it will come into effect in India and elsewhere, explained Gupta.
Sustainable development goals are the welfare targets of the United Nations that India and 192 other nations embraced in 2015 to be met by 2030. India, with 17% of world population, holds the key to global SDG achievement. The goals cover areas like healthcare, gender equality, clean energy, infrastructure, education, peace and building strong and accountable institutions.
At present, the law mandates that companies with a networth of at least Rs500 crore or revenue of Rs1,000 crore or net profit of Rs5 crore should spend at least 2% of their net profit on corporate social responsibility and any lapse in this regard should be explained in the annual financial statement. The proposed new norms that the ICAI will recommend disclosure of specific details about the spending that companies make towards SDG goals in columns to be provided in financial statements. Indian companies spend around Rs15,000 crore a year on CSR, as per official estimates.