ICAI to make EPS accounting norm mandatory
Mumbai: The country’s apex accounting body, the Institute of Chartered Accountants of India (ICAI) is to soon come out with mandatory accounting norms on earnings per share applicable for accounting periods commencing on or after April 1, 2001. The norms will be applicable to all enterprises, irrespective of whether or not their equity shares or potential equity shares are publicly traded.

The institute has just released an exposure draft which proposes that an enterprise should present basic and diluted EPS for each class of equity shares that has a different right to share in the net profit for the period.

The proposal, which is based on the international accounting standard, further proposes that where the profit-and-loss account includes extraordinary items, the enterprise should disclose two basic and diluted EPS figures, one which includes the extraordinary item and another wherein the impact of such extraordinary item has been excluded.

It is hoped that, by making this mandatory, it will make it easier for analysts and investors to make comparisons of performance among different enterprises for the same period, and among different accounting periods for the same enterprise.

The exposure draft also takes into account the issue of bonus or right shares, buyback of shares, stock options, etc. which may necessitate proper calculation of EPS and provides illustrations that highlight these issues in the calculation of the EPS.
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Government throws open basic telephony to all
New Delhi: In a major development, the government has, in line with the Telecom Regulatory Authority of India’s (Trai) recommendations, decided to do away with the restrictions on the number of operators in basic services.

The Trai had earlier recommended that there should be unrestricted number of operators and a differential tariff structure. Operators providing services in high revenue-earning circles have to pay a higher licence fee.

However, contrary to the Trai’s recommendation, the government has decided that the existing six private basic telecom service operators will also be required to pay the revenue-sharing part of the licence fee. Trai had also fixed a low entry fee for new operators. For instance, in Maharashtra circle, the new entrants will have to pay a licence fee of Rs 115 crore compared to Rs 795 crore paid by Hughes.

In order to compensate the existing operators, the TRAI recommended a waiver of revenue-sharing part of the licence fee till July 31, 2003.
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