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The Institute of Chartered Accountants of India (ICAI) has issued FAQs on Guidance Note for Financial Statements of Non-Corporate Entities, effective for accounting periods beginning on or after April 1, 2024. Developed jointly by the Accounting Standards Board (ASB) and Auditing and Assurance Stand
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FAQ :
The Guidance Note is effective for accounting periods beginning on or after April 1, 2024.
It applies to sole proprietorships, HUFs, partnership firms, associations of persons, societies, trusts, resident welfare associations, statutory corporations, and autonomous bodies not governed by the Companies Act or LLP Act.
Yes, entities like not-for-profits, political parties, and educational institutions already governed by specific ICAI guidance or statutory requirements are exempt.
Entities are classified as MSMEs if their turnover is up to Rs 50 crore and borrowings do not exceed Rs 50 crore. Entities not meeting these criteria are classified as Large Entities.
Yes, MSMEs are granted certain exemptions and relaxations, particularly from AS 3 (Cash Flow Statements), AS 17 (Segment Reporting), AS 20 (Earnings per Share), AS 24 (Discontinuing Operations), and certain disclosures under other standards.
The Guidance Note emphasizes the auditor's responsibility in reporting non-compliance by clients and provides clarity on whether such non-adherence necessitates a modified audit opinion.
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