MARK- TO- MARKET ACCOUNTING

Historical cost accounting is fading as India Inc marches into a new era. In the “fair value” accounting regime, what is a company’s really worth? This is the central question that accounting attempts to answer, and it is no easy exercise. Every answer invites debate, and that debate has now intensified, thanks to "fair value" accounting.
Under fair value, a company values its assets and liabilities based on what they would fetch today, rather than what they originally cost. The concept is not new — accounting has long operated under a "mixed model”, which records many items at historical cost while requiring that companies mark to market certain asset classes (such as securities and derivatives). But a host of factors have suddenly propelled the calculation of fair value from a secondary concern to a dominant theme of corporate accounting, and many companies are just beginning to understand the ramifications. If fair value takes full hold, as some have suggested it should, company results may look far different than they do today.
In stark contrast to most other accounting concepts, fair value has already achieved the improbable feat of making front-page news, thanks to its alleged role in the subprime mortgage crisis. Mired in mess, many financial services giants have staggering losses. The question has been: Has fair-value accounting played a role in the economic meltdown? The proponents of fair value say that the accounting standards merely help companies show how much their assets are truly worth at this very moment — and that the downfall of the financial institutions that took major write-downs after applying fair value was actually a delay in showing investors how much these banks were truly worth and were representative of a move toward a down market.
The ultimate intent of fair value is to give investors better visibility into how companies value their assets, and few deny that it achieves that aim. While recent events on Wall Street provide only an imperfect proxy for fair value's impact, those who claim that it will increase volatility have plenty of evidence on their side. The recent market conditions are most immediately felt by those fair valuing financial instruments. Fair value in accounting itself has come under attack from some quarters accused of making problems worse.
Yet not all criticism of fair value can be so easily dismissed. The credit crunch has raised three genuinely awkward questions. The first of these concerns which the bankers say that in a downturn fair-value accounting forces them all to recognize losses at the same time, impairing their capital and triggering fire sales of assets, which in turn drives prices and valuations down even more. Under traditional accounting, losses hit the books far more slowly. Some admire Spain's system, which requires banks to make extra provision for losses in good times, so that when loans turn sour their profits and thus capital fall by less.
The second — and immediate—question is how to value illiquid (sometimes unique) assets and how and when models should be used for its determination. A common solution is to use banks' own models. But some investors are concerned that this gives banks' managers too much discretion — and no wonder, because highly illiquid assets are worryingly large relative to many banks' shrunken market values. Such is the complexity of many such assets that it may not be possible to find a generally acceptable method. The best answer is to disclose enough to allow investors to form their own views. International Accounting Standards Board (IASB) has given a new guidance to the auditors and accountants on reviewing mark-to-market assumptions which should help in this regard.
The third problem is a longer-term one: the inconsistency of fair-value rules. Today the treatment of a financial asset is determined by the intention of the company. If it is to be traded actively, its market value must be used. If it is only "available for sale" it is marked to market on the balance sheet, but losses are not recognized in the income statement. If it is to be "held to maturity", or is a traditional loan, it can be carried at cost less impairment, if any. Different banks can hold the same asset at different values because of classification criteria prescribed by the standards.
Fair value is not perfect, but most agree it is relevant measure than historical cost for financial instruments. All companies would need to account for the effect of the recent economic turmoil on the business. If we are to have faith in accounting standards, fair value should be applied when the going is tough, as well as when it is fair. Long term confidence would be hurt by rejecting the fair value concept in response to short-term pressures.

‘EMBEDDED DERIVATIVES’ – A CHALLENGE TODAY, NOT TOMORROW

There is going to be a biggest change in accounting standards on convergence with International Financial Reporting Standards (IFRS). Implementation of IFRS cannot be dealt with as a year-end accounting issue. One area where the education is required is ‘derivative accounting’. Derivatives make headlines every other day, and, almost always for the wrong reasons. What are derivative contracts? Where do they trade? Why do they exist? While a seemingly endless number of derivative contract structures will appear, do not be misled. Only two basic contracts exist – a forward and an option. All other product structures are nothing more than portfolio of forwards and options. Similarly, derivative products are offered by an almost endless number of institutions in the market - brokerage houses, banks, investment houses, commodity exchanges, and so on. Again, do not be misled. Fundamentally there are only two types of derivative markets – exchange traded markets and over-the-counter (OTC) markets. Exchanges facilitate trading in standardized contracts. OTC markets, on the other hand, can tailor contracts to meet customer needs; however, counterparties are left to their own devices to arrange protection from counterparty default. Finally, why do derivatives markets flourish, considering that they are redundant securities, that is, they derive their value from the price of the underlying security? The answer is plain and simple. They are generally less expensive to trade, or, in many instances, circumvent trading restrictions that impede trading in the underlying securities market. Because derivative contracts are redundant means that they are effective risk management tools. Because they are cheaper to trade and may circumvent trading restrictions means they are cost-effective.
In this article, we look at the accounting for embedded derivatives, under the new Accounting Standard (AS) 30 Financial Instruments: Recognition and Measurement.
Embedded derivatives are those instruments that are contractually attached to another non-derivative contract what AS 30 terms a "host contract". A common example would be a convertible bond that has a host debt contract and an equity conversion option embedded within it. Such embedded derivatives can arise through specific structures with the intention to shift certain risks between the counterparties or may arise inadvertently through market practices and common contractual arrangements.
AS 30 requires all derivatives to be measured at fair value on the balance sheet, with changes in fair value being accounted through profit and loss, except for derivatives, that are designated as hedging instruments. The principle in respect of embedded derivatives is that the fact that a derivative is not a legally separate individual contractual instrument should not prevent it from being accounted for in the same way as other stand-alone derivatives under the standard. The result of this is that in many circumstances, embedded derivatives must be separated from their host contracts and accounted for in the same way as stand-alone derivative instruments. There are certain exceptions to this however and the thought process that is employed to determine whether or not an embedded derivative must be separated from its host contract is discussed below.
If the entire financial instrument as a whole is held at fair value with gains and losses reported in the income statement, bifurcation is not required as the embedded derivative is already being treated as it would be if it were stand-alone. Equally if the embedded derivative does not in fact meet the derivative definition in the standard it is not bifurcated from the host contract. Both of these questions are generally easy to answer. The complexity in the implementation of the embedded derivatives rules of AS 30 is in the assessment of whether or not the economic characteristics and risks of the embedded derivative are "closely related" to the host contract.
AS 30 provide a number of examples through which it demonstrates the application of the "closely related" principle and states that certain derivatives are considered to be closely related to their host contracts. The basis for this is not economic value; indeed many closely related derivatives can have significant economic impacts. For example, debt instruments may have put and/or call options embedded in them that allow either the holder to put it back to the issuer or the issuer to call it back from the holder. If the strike price of the call or put is not at the accreted amount of the debt instrument the derivative is considered closely related to its host. This option, if exercised, will not result in an accounting gain or loss as the strike will equal the carrying amount, but the derivative could have significant economic value nevertheless.
Embedded derivatives do not only appear in financial instruments, they are also common in other contracts that might be outside the scope of AS 30. Essentially if a derivative is embedded in another contract, any contract, it is quite possible that the derivative will need to be bifurcated from the host and fair valued with gains and losses taken to the income statement. Common examples of contracts that are outside the scope of AS 30 but that have embedded derivatives that are within the scope are leases, insurance contracts and purchases or sale orders.
The concept of an embedded derivative is intellectually supportable from an accounting perspective, but what does it mean in practice for a corporate?
Firstly, in order to ensure all transactions are properly accounted for, it is necessary for corporate to perform a full analysis of their current contracts. On the face of it this may seem a simple if time-consuming task. However, not all embedded derivatives are as easy to spot as equity conversion features in convertible debt. For example, regular rent reviews in a lease could, depending on the basis of the review, be an embedded derivative that requires bifurcation.
To perform the transition to IFRS thoroughly and properly there is a level of training and education that will be necessary. It is important to ensure that appropriately qualified people are looking for these instruments that could, after all, have a material impact on the financial statements. Moreover, it would be prudent, when considering entering into certain transactions to analyze them from an AS 30 perspective in order to understand the potential impact on the financial statements - although clearly the accounting for a transaction should never be a singular driver for whether or not to do a particular piece of business.

How to Type/Enter New Rupee Symbol of India On Your PC (MS Word,Note Pad) through Key Board

Click here to download:
http://www.4shared.com/account/file/I-L0FB1Y/Rupee.html



Download and enjoy. Please let us know if you face any problem.

IF YOU HAVE ANY DOUBTS IN UNDERSTANDING HOW TO DO THIS CAN ASK US.

How to Enter New Rupee Symbol of India On Your PC (MS Word,Note Pad) through Key Board

1)Created by Foradian Technologies .They are first Creators of Indian Currency symbol to get used .
2)How to use on Your system
3)Download the above attached font Rupee_Foradian.ttf
4)Install the font. (It is easy. Just copy the font and paste it in “Fonts” folder in control panel)
5)Start using it.
6)How to type the Rupee symbol ?
7)Rupee symbol mapped the grave acent symbol – ` (the key just above “tab” button in your keyboard) with the new Rupee symbol. Just select “Rupee” font from the drop down list of your fonts in your application and press the key just above your tab button.

Tax Planning is important to any kind of business

How to plan my tax liability?

Most of taxpayers wanted to reduce tax they pay to the government. Some people manage to do some adjustment to actual figure and pay lesser tax. But finally they have to pay huge tax with penalty. Making adjustment is risky and unlawful manner. How people reduce tax lawfully. It is one challenge taxpayers have to achieve.


Solution is tax planning. Tax planning is the process of organizing the tax affairs by which can minimize the incident of tax in leave of doing fraudulent, fictitious and illegal actions. You can not plan your past transactions. It is involve on future affairs what is to be done.


When planning your tax, you should have through knowledge about tax law, especially on tax concessions, exemptions and tax rates. Most people do not think about tax implication on investments and other day to day business activities. As a example as a VAT registered person when you purchase you should buy from VAT registered supplier, even though his price is bit higher than the supplier who does not give tax invoice. But most people bye without tax invoice at lesser price and pay huge tax (VAT) to the government.


Tax planning can be applied from start up to winding up of the business. Before doing any single change to the business you have to write to your tax consultant and get advice from him.


Few things you have to consider doing activities in your business


Selecting of business activities which have tax concessions and exemptions
Avoiding disallowable expenditure
Keeping mind on qualifying payments
Paying tax on time and get benefit of tax rebates
Try to get maximum benefit of capital allowances
Acquire the assets keeping mind on tax planning

Keep mind on tax planning and enjoy hassle free business.


If you have any question about tax planning contact me through capooja@yahoo.com

Demand For Trainers As IFRS Deadline Nears

With not even a year to go for the April 1, 2011 deadline of International Financial Reporting Standards (IFRS) to be implemented by Indian companies with a net worth of over Rs 1,000 crore, a number of training institutes have sprung all over the country to cater to the demand for trained manpower in the field.

Set up by the International Accounting Standards Board (IASB), the London-based independent body of accounting standards, IFRS have been adapted by over 110 countries already. In India, the ministry of corporate affairs has prepared a roadmap for its implementation as per which BSE 30 and Nifty 50 companies as well as those with shares listed overseas and those with a net worth of over Rs 1,000 crore have to implement the standards by April 1 next year. Companies with a net worth of more than Rs 500 crore and less than Rs 1,000 crore have time till April 1, 2013 while by April 1, 2014, all companies whether listed or not and with a net worth of less than Rs 500 crore will have to switch over to the new accounting standards.

“Eventually, the new standards will create a caste system in the corporate world with big firms adopting them sooner and smaller ones being eventually forced to do so,” says IFRS country leader for Deloitte in India, N.Venkatram. In India, at least 16 firms, including Infosys, Wipro and Tata Motors already publish their accounts in this format while 400 companies are working on this. Among the early converts will be IT companies since their operations are more aligned with global standards, says Venkatram.

Training The Trainers

At the top-most level, the big four audit firms have tied up with various institutes to train professionals in the new way of understanding and deciphering numbers. Deloitte has tied up with the the Indian Institute of Management (IIM) Ahmedabad while PricewaterhouseCoopers has joined hands with IIM, Calcutta. KPMG is offering advanced certificate course in IFRS through NIIT Imperia while E&Y has a tie-up with Get Through Guides (GTG) for this. Some Indian institutes such as Piron Education have approached the Association of Chartered Certified Accountants (ACCA) of the UK to prepare manpower to handle IFRS.

Alethia Education Services, a Delhi-based company has forged a partnership with Kaplan Financial of the UK. According to Alok Bansal, chief executive officer of Alethia, “All the players put together have trained only a few thousand professionals in this field while more than 15,000 is the number needed.” Venkatram of Deloitte puts the number of those with the required expertise at the top level at even less—200.

For a fee of around Rs 45,000 many practising chartered accountants (CAs) are taking these courses which generally last three months, says Bansal. To capitalize on the growing need for trained manpower in accounts and to bridge the huge demand-supply gap, G.S.Grewal, author of many a class XII books on the subject, has recently started the Grewal Academy of Accounting Professionals (GAAP). According to Lalit
Kumar, managing director of the academy, “There are many who go to the Institute of Chartered Accountants to become CAs but there is a crying need for simple accountants in the market.” The students opting for courses from institutes such as GAAP are mostly class XII pass or graduates who gain employable skills through these courses.

More Than The Numbers

Apart from the mere technicalities of switching over to the new system, IFRS will change the way business is looked at, says Venkatram of Deloitte. The concept of fair value in an acquisition will become important and also, the time value of money will have to be looked into. “The new system is a far more sophisticated way of looking at accounts rather than just a black and white way of looking at numbers,” he says.

Ultimately, while the plethora of institutes offering accounting courses will prepare manpower at the junior-most, operational level, much more effort will be needed at the senior, financial officer level and the sooner companies start investing resources in that the better it would be for them.

Do you like the symbol of Rupee?

IIT graduate gives Indian Rupee its symbol

An IIT post-graduate D Udaya Kumar has given the Indian Rupee a symbol of its own (See pic).

Information and Broadcasting Minister Ambika Soni announced this, saying the Rupee had now arrived on the international platform in sync with universal standards. The Cabinet approved the design today.(How do you like the symbol?)

Soni would not commit to a date by when the symbol would be officially in use but said it would take about six months in India and about two years to make it recognized internationally.

The government had organised a symbol design competition with a prize of Rs 2.5 lakh for the winner. Five designs were shortlisted. D Udaya Kumar had submitted more than one design.

The contestants were asked to design a symbol that would be the Hindi alphabet Ra with two lines - to "reflect and capture the Indian ethos and culture," in Finance Minister Pranab Mukherjee's words.

The growing influence of the Indian economy in the global space is said to have prompted this move. The Rupee will join the select club of global currencies like the US dollar, the British Pound, European Euro and Japanese Yen that have unique symbols.

Right now, the abbreviation for the Indian Rupee, 'Re' or 'Rs' is used by India's neighbours Pakistan, Nepal and Sri Lanka as well.

Revenue be measured on what customer pays - Business Standard

Indian GAAP requires that revenue should be measured by the charges made to the customer. IAS 18 requires that revenue should be measured at the fair value of the consideration received or receivable from the customer. It stipulates that if the payment is deferred and the time value is material, fair value of the consideration is the present value (PV) of the consideration determined using the imputed interest rate as the discount rate. The imputed rate of interest is the more clearly determinable of either: the interest rate at which the customer could borrow from the market at the same terms and conditions; or a rate of interest that discounts the nominal amount of the consideration to the current cash sales price of the goods or services. Application of the principles stipulated in IAS-18 gives a result different from the result that is obtained by applying the principles stipulated in the Indian GAAP. For example, a dealer sells diesel to companies that own tea gardens at the regulated price. Although, as per the contract, the dealer does not extend any credit, usually those companies pay the amount after nine months. The dealer sells diesel to retail customers on cash basis at the same regulated price. Under the Indian GAAP the dealer recognises revenue at the nominal amount of the consideration received or receivable from tea companies. Under IFRS, the dealer should recognise the revenue from sales of goods at the PV of the cash received or receivable and it should recognise the difference between the PV and the nominal amount at the interest income. This is so because, in substance, the dealer implicitly extends a line of credit to tea companies.

The Exposure Draft (ED) issued by the IASB on ‘Revenue from contracts with customers’ stipulates that the revenue should be measured at the transaction price. The transaction price reflects the probability-weighted amount of consideration that an entity expects to receive from the customer. In other words, the entity should assess the credit risk at the inception of the transaction. For example, if an entity, based on experience, estimates that there is 10 per cent chance that the buyer will not pay the consideration, it will measure the revenue from a sale invoiced at Rs. 1,000 at Rs. 900 (1,000 × .90 + 0 × .10). If, subsequently the customer pays an amount higher or lower than Rs. 900, the difference will be recognised as a gain or loss in the profit and loss account.
The ED stipulates that in determining the transaction price, an entity should adjust the amount of promised consideration to reflect the time value of money if the contract includes a material financing component (whether implicitly or explicitly). The entity should separate the financing transaction by discounting the amount of promised consideration by a rate that reflects both the time value of money and credit risk. Application of these principles will give the same results as that is obtained by the application of the principles stipulated in IAS 18, if the entity extends credit for a reasonably long period (usually, six months or more) or from experience the entity estimates that the customer will pay after a reasonably long period. However, the principles stipulated in the ED will change the accounting for advance or progress payments received from a customer.

We may take the examples of development of residential property. The developer satisfies the performance obligation on delivery of the apartment because the buyer obtains control over the same only on delivery. The developer receives progress payments over the construction period, which is reasonably long. Therefore, the contract between the developer and the buyer includes a material financing component. According to the ED, revenue should be recognised at the PV of the consideration received in advance. The discount rate should reflect the time value of money and the credit risk of the developer.

We may expect significant changes in the accounting for recognition of revenue. Although the element of estimate will increase in measurement of revenue, the proposed accounting principles will improve the presentation of income in the profit and loss account. Proposed accounting principles focus on the substance of the contract. With increase in the element of estimate in measurement, the responsibility of the audit committee will also increase.

Convergence with IFRS by 2011: Government

The government today said that Indian accounting standards will converge with International Financial Reporting Standards (IFRS) by 2011, even as issues like fair value and depreciation are being ironed out.

"We are still working on fair value concepts and other issues like depreciation, but I can assure you that we will stick to the roadmap laid for the convergence of Indian standards with the IFRS," Corporate Affairs Minister Salman Khurshid said on the sidelines of an Assocham seminar on International Financial Reporting Standards (IFRS) here.

Even though the government has announced that companies with a turnover of more than Rs 1,000 crore will converge by 2011, the industry and accountants still have differences on how to determine the "fair value" of assets and liabilities.

In accounting, fair value is used as an estimate of the market value of an asset or liability. While some accountants are of the view that the historical cost should be taken into account while entering the value of an asset, some believe the current value should be taken into account.

"Users are for the fair value concept, while accountants prefer the historical concept," Deloitte Haskins & Sells Chairman N P Sarda said.

According to the roadmap laid out by the Corporate Affairs Ministry, companies listed on the BSE or NSE or whose shares or other securities are listed on a stock exchange outside India, besides listed and unlisted companies with a net worth of more than Rs 1,000 crore, are to converge with IFRS from April 1, 2011.

Companies having net worth of exceeding Rs 500 crore will join the regime from April 1, 2013, while all other listed companies with a net worth of less than Rs 500 crore will converge with IFRS by April 1, 2014.

While all insurance companies will convert their opening balance sheets with IFRS from April, 2012, scheduled commercial banks and urban cooperative banks with a net worth of over Rs 300 crore will adopt it from April 1, 2013.

In addition, non-banking finance companies (NBFCs) which are part of the NSE or BSE or have a net worth of over Rs 1,000 crore will converge their opening books of accounts with IFRS norms from April 1, 2013. All listed and unlisted NBFCs with a net worth of over Rs 500 crore will convert their opening balance sheet from April 1, 2014.

According to the ministry's roadmap, urban cooperative banks with a net worth of less than Rs 200 crore, unlisted NBFCs with a net worth of under Rs 500 crore and regional rural banks need not follow the converged accounting norms.

Commercial banks with a net worth of over Rs 300 crore and those UCBs with a net worth between Rs 200-300 crore will be required to convert their balance sheets to the new norms from April 1, 2014, onwards.

IFRS training market hots up

Do you have a few spare rooms? Can you do them up as classrooms and rent them out? If you can, welcome to a new business – IFRS training.

With some 1,500 Indian companies needing to do their accounts in accordance with the principles of International Financial Reporting Standards (IFRS) from April 1, 2011 – and thousands more to follow thereafter – the demand for training accountants in IFRS is a huge business.

It can only grow, given at least two distinct factors. One, IFRS standards are dynamic and hence professionals have to keep pace with the changes. Two, more importantly, the world is opening up to Indian professionals for IFRS-related work.

Today, the community of Indian accountants cleaves into two – those who welcome IFRS and those who don't. The former class feels that the system (which mandates over 2,000 points of disclosure) is transparent, investor-friendly. The latter feels the need for IFRS is not well-founded, the regime is not preceded by any market demand for it.

The latter largely believes that the new accounting regime is the handiwork of the Big Four – the global accounting firms, E&Y, KPMG, Deloitte and PricewaterhouseCoopers – who will get lucrative assignments for helping Indian companies migrate to IFRS system and training accounts professionals. The Big Four are very active in the training market. KPMG has a tie-up with NIIT Imperia, PwC with IIM Calcutta, among others, for IFRS training.

The Big Four seem to have a huge slice of the training market. But Indian entrepreneurs have spotted this opportunity too.

Mr Kanagaraj Antonysamy is among the few who have seized upon the opportunity. His Thonus Training in Chennai has been conducting workshops for companies, will begin next week to offer diploma courses – the Association of Chartered Certified Accountants of the UK (ACCA) will awards the diplomas. Mr Antonysamy estimates that the market for IFRS training at Rs 700 crore, leaving out the value of the training provided by the Big Four as part of their ‘conversion assignments'.

The market is hotting up. Among the better known names in the business is PIRON India of Delhi, which has been training accountants in IFRS for the past three years. Mr Abhishek Asthana, Director, PIRON India, is more conservative in his estimate of the market – Rs 200-crore, he says – but admits the size of business is growing exponentially.

New Ecosystem

Regardless of the size, a point that clearly emerges from talking to Thonus and PIRON is that the market is far from discovered. “We have been getting enquiries from Bangalore and Hyderabad, which indicates that there is demand in these places,” says Mr Antonysamy.

PIRON is coming south. It has trained a few south Indian companies, including a large Chennai-based automotive major, but that was under ‘corporate training model'. Now PIRON intends to offer courses, again diplomas awarded by ACCA, UK, on classroom basis. On Thursday, PIRON tied up with the Chennai-based Careers Junction, a firm that has been offering finishing-school training for a variety of industries such insurance, retail and IT.

“I know the demand for IFRS is very big,” says Mr P.V. Krishna Rao, who founded Careers Junction. He believes that PIRON's Internet-based classroom model will be hugely in demand and is expanding Careers Junction to meet it.

A whole ecosystem is developing – training companies, trainers, providers of services such as infrastructure and marketing support and providers of IT support (Reliance Web World Ltd is PIRON's partner). And, this is just the incipient stages of the market.

Possibly, another big opportunity awaits Indian trainers – the US. Come 2014, the US will migrate to IFRS system and, hopefully, a lot of work will flow to India. Indian firms are already wetting their feet in overseas waters. PIRON already has a presence in the US and Thonus has been getting overtures from West Asia.

A regulatory change has spawned such a huge market. John Maynard Keynes must be smiling.

Are you liable for ESC ?

Applicable to : every person or partnership for each quarter commencing on or after 1/4/2006


Turnover Limit : Rs. 7.5 Mn per quarter


Special Exemption : during the period 1/1/2009 to 31/12/2009 for following receipts

Export of any good

Deem Export

Any operation of Hotel, Tour Operation or Tour Agent

Calculation of ESC : {Turnover – (VAT+ Capital Assets Disposal + Bad Debts)}* Relevant Ratio


Specifically defined turnover for:

Freight Forwarder : Turnover of any freight forwarder shall be reduced by the sum payable by such freight forwarder to any person on account of the carriage by such person, of any cargo loaded in to any ship or aircraft


Export of cut and polished Diamonds from raw Diamonds imported: Turnover for ESC is difference between CIF value of raw diamonds and FOB value on the export


Export of Garment manufactured from Raw Material imported on NFE basis: Turnover for ESC is difference between CIF value of raw materials and FOB value on the export


ESC Rates

Turnover of Exempt Profit	0.25%
Profit of Which are taxable at the specified in 5th Schedule	0.5%
If Taxable Income of a company does not exceed 5,000,000	0.5%
Distributor	0.05%
Trade or Business which deals in whole sale or retail(Other than Motor Vehicle or Liquor)	0.25%
Trade or Business which deals in whole sale or retail Motor Vehicle or Liquor	1%
Export of Article or Goods	0.25%
Turnover from primary conversion of any Tea, rubber or coconut plantation	0.25%
Turnover From Export of apparels Supply of locally manufactured apparels to any exporter of apparels for export Supply of locally manufactured textiles to any exporter of apparels to be used in the manufacture of apparels for export by such exporter Turnover of a trading house approved by BOI	0.1%
Any liable turnover (which is tax at 35%)	1%

Tax Credit

Can setoff against relevant income tax.

ESC paid by the partnership can be obtained as tax credit in the hands of individual partners

Payment and Filing of Returns

Payment due date is on or before 20^th day of the next month at the end of that relevant quarter

Return shall be file on or before 20^th day of the next month at the end of that relevant quarter

'IFRS may raise BIFR filings'

A large number of listed companies may be referred to the BIFR in 2014 following the implementation of International Financial Reporting Standard (IFRS) for all listed entities, financial experts feel. IFRS would become the norm for level-1 companies having a turnover of more than Rs 1,000 crore from April 2011. LSI Financial Services MD Rajya V Kajaria said over 25-30% companies could be affected once IFRS is rolled out fully. LSI is working on the impact of IFRS on Indian companies.

Kajaria said under IFRS, redeemable preference shares would be treated as a liability in the balance sheet instead of capital. "This structural change would significantly alter the debt-equity ratio of many firms. As a fallout, the net worth of many companies will go down," he added.

LSI director P K Ghosh said depreciation norms in IFRS, too, are different and could impact profitability. "In IFRS, the depreciation is more subjective. For example, depreciation of an aircraft and its engine will be different. So it will have an impact," he added.

CD Equisearch director Rajesh Agarwal said the change in debt-equity ratio would impact the borrowing capacity of many companies. Arijit Chakraborty, joint managing partner of Dutta Sarkar & Co also agreed that there would be a major impact on the net worth of Indian companies when IFRS would be rolled out fully.

Chakraborty said as per the new BIFR regulation, if the net worth of a company is eroded by even 50% then that has to be reported to it. "In 2014, a lot of companies may find their net worth eroded by more than 50% if they do not alter the preference share instrument within this timeframe," he added.

source: http://timesofindia.indiatimes.com/biz/india-business/IFRS-may-raise-BIFR-filings/articleshow/6132735.cms