(Note : Page Nos. given below are from C.A. Journal
for July, 2010)
(i) Invitation to join CFO Guild/Members in Industry
Guild :
The Committee for Members in Industry of ICAI has invited
members of the ICAS to join two guilds.
1. CFOs Guild (Corporate Accountants Guild) :
This guild is for members who are occupying high positions
(CEO/CFO/Treasury Head/Head of Analyst, GM or above) in industry. The primary
objective of setting up such a guild is to develop a platform where highly
intellectual and talented pool of people from various organisations can discuss
various issues concerning the profession in general and Members in Industry in
particular.
2. Members in Industry Guild :
Members in Industry Guild is for Members serving in
Industries. The primary objective of setting up such a guild is to develop and
maintain an industrywise database of the members of our Institute serving in
industries.
They can plan, formulate and strategise policies for
improving the image of Chartered Accountants in the eyes of the industry.
Industry-specific seminars/conferences/round table meetings can also be
organised to discuss the matters pertaining to the industry and make them the
brand ambassadors of the profession. The Members shall also be appraised of the
various happenings of the Institute, from time to time.
(ii) Formation of CPE Study Circles for Members in
Industry of ICAI :
29 CPE Study Circles for Members in Industry have already
been formed so far by the CMII. A separate helpline for forming CPE Study for
Members in Industry has been established at the Headquarters of our Institute
with Email : cmii_events@icai.in.
(iii) Retention of period of audit documentation :
The Council of the Institute of Chartered Accountants of
India had in August 2009, pursuant to the provisions of Rule 12 of the Chartered
Accountants (Procedures of Investigations of Professional and Other Misconduct
and Cases) Rules, 2007 had amended the audit documentation retention period
appearing as ten years in paragraph 83 of Standard on Quality Control 1 to seven
years.
(iv) For the attention of the candidates who aspire to
appear in various Chartered Accountancy (CA) examinations scheduled during
November, 2010 :
In order to reduce the time taken in processing the OMR
application forms and also to ensure accuracy in the data pertaining to name,
registration No., group/centre/medium opted, it has been decided to make the
filing of examination application forms online at the url http://icaiexam.icai.org/
as the only mode of application for various CA examinations with effect from
May, 2011.
(v) Invitation for articles on XBRL :
To create awareness about XBRL by developing a pool of
knowledge and sharing it, ICAI invites articles on XBRL from members and others
with knowledge/experience in XBRL for publishing in the Chartered Accountant
Journal. Articles may pertain to relevant topics such as basics of XBRL; its
benefits and uses to various users, such as chartered accountants, banks,
income-tax department, financial analysts and others; challenges in implementing
XBRL, etc.
(vi) Recognition to profession :
Our member CA Piyush Goel has been elected to Rajya Sabha
from Maharashtra recently, and our Past President Kamlesh Vikamsey has been
appointed as the Member of Audit Advisory Committee of United Nations
Development Programme. Our heartiest congratulations to them.
(vii) Non-submission of Form 112 :
The following course of action be adopted for dealing with
the cases of condonation of Regulation 65 w.e.f. 1st April, 2010.
It is clarified that the cases for condonation of breach of
Regulation 65 and 78 received up to 31st March, 2010 would be dealt with in
terms of the Announcement dated 8th January, 2010 i.e., general amnesty.
In case a breach of regulation 65 is noticed at the time of
enrolment as a member, the decisions are as follows:
(viii) ICAI publications :
The Committee on Public Finance and Government Accounting is
coming out with a publication ‘Issues on Public Finance’.
(see pages 200 to 203)
2. Transfer price for the purpose of segment reporting (EAC
Opinion) :
Facts :
A company is a public sector enterprise under the
administrative control of the Ministry of Mines, Government of India and is
engaged in mining of bauxite, manufacturing of alumina and aluminum, generation
of power at a captive power plant for use in smelter, and selling of alumina and
aluminum both in domestic and international market.
Cost of power constitutes about 30% of cost of production of
aluminum. The captive power plant is set up exclusively to supply uninterrupted
power to smelter. It is also connected to State grid to take care of the supply
of emergency power to smelter in case of any breakdown or failure at the captive
power plant. Any surplus power after meeting the requirement of smelter is
automatically transmitted to State grid and treated as sale, as per agreement
with company ‘G’, which is a State Government undertaking.
As per the querist, even though the cost of generation of
power is higher, transfer price of power of the purpose of segment reporting is
considered only at 110 paise/kwh, which results in segment loss in case of the
captive power plant (even though the unit is functioning efficiently and up to
the satisfaction of the management) and higher revenue for chemical and aluminum
segments.
Segment report for the quarter ended December 31, 2008 was
examined by the statutory auditors at the time of limited review and they were
of the opinion that though the unit is performing well, as a result of
compliance with the provisions of AS-17 for inter-segment transfers, as stated
hereinbefore, the power segment reveals loss, which does not appear to be a
proper disclosure.
As per the querist, in case the company is allowed to sell
power to parties other than company ‘G’, revenue earned will be at least three
to four time more. However, since the company is largely dependent upon company
‘G’ for emergency power and back-up power, it will not be practicable to delink
from company ‘G’.
From the aforesaid facts, according to the querist, it is
revealed that the circumstances have arisen only because of non-remunerative
sale price and will continue to be the same till the rate charged from company
‘G’ is revised.
