Disclosure of Demonetized Currencies from FY 2017-18: ICAI Withdraws Implementation Guide

ICAI - Demonetized Currencies - Taxscan

The Institute of Chartered Accountants of India ( ICAI ) has withdrawn the Implementation Guide on Auditor’s Report under Rule 11(d) of Companies (Audit and Auditors) Amendment Rules, 2017 and Amendment to Schedule III to Companies Act, 2013.

Earlier, it was said that the 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.

In April 2017, the Auditing and Assurance Standard Board (AASB) issued the “Implementation Guide on Auditor’s Report under Rule 11(d) of Companies (Audit and Auditors) Amendment Rules, 2017 and Amendment to Schedule III to Companies Act, 2013” to provide guidance to the members on the matter. III. Subsequently, on this matter, a Clarification dated 01.09.2018 was issued by the Corporate Laws and Corporate Governance Committee (CLCGC) stating 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.”

“AASB at its 190th meeting held on 1st & 2nd November 2018 considered the matter and decided to withdraw the aforesaid Implementation Guide. Accordingly, the aforesaid Implementation Guide is withdrawn with effect from the date of hosting of this Announcement on the ICAI’s website,” the ICAI said in a statement.

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