New accounting norms for overseas biz

The audit regulator has proposed changes to accounting norms to ensure financial statements of businesses are more transparent and accurate about investments and transactions in foreign currencies for which the exchange rate is not readily available or is unreliable.

- Gireesh Chandra Prasad

The National Financial Reporting Authority (NFRA) at its last board meeting held in February decided to recommend to the ministry of corporate affairs that it notify amendments to accounting standard Ind AS 21 dealing with 'effects of changes in foreign exchange rates,' two persons informed of the development said.

This means businesses will have to make more disclosures about their accounting policies for transactions and foreign operations in such currencies, they said.

The idea is to make it clearer to investors and other stakeholders how such foreign transactions are translated while preparing financial statements.