Subscribe to BCA Journal Know More

June 2022

ACCOUNTING FOR ‘SPECIAL’ TRANSACTIONS

By C.N. Vaze
Chartered Accountant
Reading Time 3 mins
PREAMBLE

A new Accounting Standard is proposed to be introduced to bring transparency in accounting and enable a ‘True and Fair’ view in Audit Reports regarding certain ‘Special’ Transactions. This Accounting Standard may be known as Accounting for Special Transactions (AST).

SPECIAL TRANSACTIONS

These Special Transactions include the following. These are only illustrative. It covers all such transactions which were hitherto going unaccounted.

1. Kickback: For getting special favours in business or securing sales-orders/contracts.

2. Speed money: For getting quicker results on an out of turn basis.

3. Goodwill amount: For expressing gratitude for some important work done by others.

4. Setting amount: For ensuring a favourable result from an authority or any other person.

5. Settling amount: For settling a dispute decided against the entity whose accounts are to be maintained.

6. Adjustments: Payments made for a legitimate purpose and objective but are required to be shown under different heads.

Similar payments may be made in different forms under various names and for different purposes.

Explanation:

The word ‘legitimate’ used in Item No. 6 shall not mean and imply that the payments mentioned in item nos. (1) to (5)
Read More
Download PDF

You May Also Like

REPRESENTATION MADE

CELEBRATING 75 YEARS OF INDEPENDENCE CHANDRASHEKHAR AZAD