Demonetized Currencies need not be disclosed from FY 2017-18 Onwards

ICAI - Demonetized Currencies - Taxscan

The Institute of Chartered Accountants of India (ICAI) has recently clarified that the above disclosures related with Specified Bank Notes (SBNs),i.e, Rs.500 and Rs. 1000 notes, were event specific, and hence were applicable for only FY 2016-17 and therefore, there is no requirement of making such disclosures either in the notes to accounts by the companies nor in the auditor’s report by the auditors for FY 2017-18 and subsequent years.

Post demonetization, the Ministry of Corporate Affairs (MCA) introduced requirement for every company to disclose the details of scrapped Rs. 500 and Rs. 1,000 currency notes held and transacted during the period from 8 November, 2016 to 30 December, 2016 as part of notes to account of financial statements for the year ended 30th March, 2017.

“The Corporate Laws & Corporate Governance Committee at its 41st meeting held on 6th June, 2018 decided that since this disclosure requirement was event specific, and hence was relevant for Financial Year 2016-17 only and required disclosure is also for period falling under that financial year. Therefore, in Notes to Account as well as Audit Report, the disclosure requirement relating to SBNs are not applicable for the Financial Year 2017-18 & subsequent years. Consequent disclosures may be made in the Financial Statements/Audit Reports.,” ICAI said in a statement.

Furthermore, the statutory auditors of every company were required to report, whether the company had provided requisite disclosures in its financial statements as to holdings as well as dealings in SBNs during the period from 8 November, 2016 to 30 December, 2016 and if so, whether these are in accordance with the books of accounts maintained by the company. Such reporting was mandated by amending the Companies (Audit and Auditors) Rules, 2014.

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