Changes CAs should Look out for: ICAI Guidance Note on Financial Statements of Non-Corporate Entities
The Guidance Note provides a pathway for Chartered Accountants to follow while rendering financial services to Non-Corporate Entities
April 1, 2024 marked the beginning of the new financial year and along with it, a host of new changes that are to be looked into by Chartered Accountants (CAs) while rendering financial service to non-corporate entities. As of April 1, 2024, the Institute of Chartered Accountants of India (ICAI) had officially implemented the Guidance Note on Financial Statements of Non-Corporate...
April 1, 2024 marked the beginning of the new financial year and along with it, a host of new changes that are to be looked into by Chartered Accountants (CAs) while rendering financial service to non-corporate entities.
As of April 1, 2024, the Institute of Chartered Accountants of India (ICAI) had officially implemented the Guidance Note on Financial Statements of Non-Corporate Entities, introducing multiple changes in terms of financial statement formats, a year ago. The Guidance Note is slated to enhance transparency in the financial reporting framework for non-corporate entities, in sync with best practices in accounting and disclosure.
Read More: ICAI to Hold CA Final Exams Thrice a Year from 2025
The Guidance Note begins with a foreword by CA Aniket Sunil Talati further elaborates on the broader implications of these changes, discussing how the Guidance Note aligns with global best practices while catering to the specific needs of India's financial landscape.
Become PF & ESIC Pro: Basic to Advance Course - Enroll Today
The foreword is followed up with a Preface by CA Pramod Jain who remained optimistic about the benefits of the Guidance Note while underscoring the necessity of standardization in financial reporting for non-corporate entities.
The document is structured into multiple chapters, each meticulously crafted to address key aspects of financial reporting. The initial chapters explain the scope, applicability, and objectives of the Guidance Note while subsequent sections delve into the precise format of financial statements, covering the balance sheet, statement of profit and loss, cash flow statements, and explanatory notes. Special emphasis is placed on classification norms, requiring entities to distinguish between current and non-current assets and liabilities.
Read More: ICAI Releases 5th Edition of UDIN FAQs as System Approaches 8 Crores Milestone
The provisions of the Guidance Note are effective from 1 April, 2025; failure to adhere to the guidelines set by the Note shall render financial statements unacceptable, thus requiring non-corporate entities, including proprietorships, partnerships, trusts, and not-for-profit organizations to overhaul their reporting mechanisms to stay compliant.
Become PF & ESIC Pro: Basic to Advance Course - Enroll Today
With the guidance note now being in force, professionals must swiftly align their practices with the new framework.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
