Asset classification Vs AS-29
This query is : Resolved
CA Ysil Karunai
(Querist)
22 August 2010
Dear sir,
A Banking company while finalising the accounts it makes a provision for standard assets (according to prudential norms), even though there is no irregularity.
Query:
1. Even though it is required to make a provision according to specific act, whether this provision is inconsistent with As-29 or not? since this amount to provision for future operating loss and para 14 is not fulfilled.
2. However, the law will prevail, how should an Auditor should disclose this issue in the Audit Report?
A Banking company while finalising the accounts it makes a provision for standard assets (according to prudential norms), even though there is no irregularity.
Query:
1. Even though it is required to make a provision according to specific act, whether this provision is inconsistent with As-29 or not? since this amount to provision for future operating loss and para 14 is not fulfilled.
2. However, the law will prevail, how should an Auditor should disclose this issue in the Audit Report?
22 August 2010
AS 29 is not applicable on banking co therefore, there is no point of disqualification.
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