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New accounting norms soon for Telcos
By siliconindia
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Friday, 11 July 2008, 02:11 IST
Tuesday: Telecom companies may soon have new accounting norms for recording transactions such as issuance of life-time validity cards and full value pre-paid cards.
The Institute of Chartered Accountants of India (ICAI) is in the process of clarifying the procedure for accounting of these peculiar transactions for which there is no precedence. "We will issue explanations and clarifications as to how to record certain transactions which are innovative in nature," ICAI President Ved Jain said.
There are different kinds of agreements being inked in the telecommunication sector. The sector also has problems of recording transactions like life-time incoming or prepaid card with full talk value in the books of accounts.
Therefore, as a proactive measure, Jain said, "We have created industry-specific sub groups to address accounting issues arising in each industry like SEZs, oil, power, telecom and infrastructure".
The ICAI has recognized few companies and has asked their CFOs to be a part of the groups formed by it, the report of which will be tabled in 3-4 months, he said.
He acknowledged that looking into the peculiarity of the agreements telecom companies are entering into, accountants don't have answers to certain issues relating to towers and license fees.
