Forex loss to get uni-track accounting

The ministry of corporate affairs is considering ways to bring uniformity between company law and accounting standards that require companies to declare their foreign exchange losses. The government’s concern stems from reported instances of domestic companies resorting to different accounting treatment for their mark-to-market (MTM) losses during the first quarter of 2008-09. The debate over foreign currency losses has resulted in companies adopting different accounting treatments. While some companies have relied on Institute of Chartered Accountants of India’s (ICAI) Accounting Standard (AS)-11 to show such losses in their profit-and-loss (P&L) account, many big corporate houses such as Reliance Industries (RIL), Reliance Communications (RComm) and Bharti Airtel have taken recourse to Schedule VI of the company law to not allow such losses to affect their Q1 net profit.