to tighten disclosure norms
delhi: as companies make
a bid to raise funds from the public, the institute of chartered accountants of
india (icai) has made it mandatory for companies to follow accounting standard
18, that calls for companies to give full details of transactions between companies
having common ownership or directors with substantial interest in their annual
reports. the requirements of the statement apply to the financial statements of
each company and also to the consolidated financial statements presented by a
accounting standard will come into effect from april 1, 2001.under this standard,
companies will also be required to disclose names of other companies which have
common ownership or directors having substantial interest.
is expected that this move will bring about greater transparency in the companys
balance sheet, which will bring to light the common directorship of a director
with substantial interest in two or more companies and any financial transaction
between these companies. the move is aimed to curb any undue benefits derived
by a company because of a common ownership or directorship with substantial interest.
an individual or a company is considered to have a substantial interest in another
company if that company or individual owns 20 per cent or more interest in the
aims at bringing to light the transactions with directors or other key management
personnel of a company and giving details like their remuneration and borrowings.
go to finance diary index page