Re opening of public ltd company a/c after approved in agm
This query is : Resolved
02 February 2012
dear sir/madem
A PSU company wants to reopen its accounts ( after approved in AGM and annual return filed) on the ground that Government grant wrongly shown in profit and loss a/c as Income.
Now Company wants not to show government grant as Income as government refuse to give the same.
So company shows its accounts on loss basis.
Is there any provision in company low for the same and will it be re-audited. Please explain briefly.
A PSU company wants to reopen its accounts ( after approved in AGM and annual return filed) on the ground that Government grant wrongly shown in profit and loss a/c as Income.
Now Company wants not to show government grant as Income as government refuse to give the same.
So company shows its accounts on loss basis.
Is there any provision in company low for the same and will it be re-audited. Please explain briefly.
02 February 2012
Please go through general circular No. 1 dated 13/1/2003 and 5 dated 22/11/2010 in www.mca.gov.in and decide accordingly.
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03 February 2012
Thanks Mr. B. Chackrapani Warrier
But i want to know that is it valid technical ground for reopening a company a/c that it want to show its a/c on loss basis, and not to govt grant receivable as it is not receivable now but receivable at the time of finalization of accounts.
or it can adjusted through prior period items according to accounting standard.
But i want to know that is it valid technical ground for reopening a company a/c that it want to show its a/c on loss basis, and not to govt grant receivable as it is not receivable now but receivable at the time of finalization of accounts.
or it can adjusted through prior period items according to accounting standard.
04 February 2012
If grant is crystallized, necessarily it has to be recognized in the books of accounts since PSU's has to follow accrual concept of accounting irrespective of the time of receipt.
If not,my understanding on the issue is,may be corrected in subsequent year's account according to the Accounting Standards.
If not,my understanding on the issue is,may be corrected in subsequent year's account according to the Accounting Standards.
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06 February 2012
Thanks Mr. B. Chackrapani
If company reopen its accounts and made reaudited.
Is there any liability of auditor towards this.
can he re- audit its accounts and give true and fair view.
If company reopen its accounts and made reaudited.
Is there any liability of auditor towards this.
can he re- audit its accounts and give true and fair view.
06 February 2012
No additional liability, provided the audit report should state the contents of the circular's referred by me and the board resolution to reopen the accounts,contrary to the circulars, in the preamble of the audit report.
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