ICAI to defer AS 15 on employee benefits for firms

New Delhi, Feb 6 (UNI) Bowing to industry demand to stagger provisioning of Accounting Standard (AS) 15 dealing with Employee Benefits, the Institute of Chartered Accountants of India (ICAI) has now deferred the date of applicability of AS 15 effective from December 7, 2006.

Newly-elected ICAI President Sunil H Talati told newspersons here today that the decision was taken by the Council of ICAI at its recent meeting in view of the "practical difficulties and hardships faced by industry".

Earlier, AS 15 was to come into effect from the accounting period commencing on or after April 1, 2006.

The move is expected to avoid sending wrong signals to investors with the inclusion of employee benefits in the balance sheet in a one-time settlement but allow this to be spread out over a five year period.

ICAI also decided that the Transitional Provisions of AS 15 (revised 2005) "may be modified to provide that an option to charge additional liability arising upon the first application of the Standard as an expense over a period up to five years," Mr Talati said.

The transitional provisions of revised AS 15 should recognise disclosure of unrecognised amount through its limited revision.

The matter will be taken up with National Advisory Committee on Accounting Standards (NACAS), which had suggested the accounting standards that the corporates are required to adopt, as the Central Government has already notified AS 15 under section 211 (3C) of the Companies Act, 1956, he said.

UNI