Key Non-compliances Observed by FRRB in the Financial Statements of Banks
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 30 May, 2023
Latest from Taxmann
The Financial Reporting Review Board (FRRB) of the Institute of Chartered Accountants of India (ICAI) plays a crucial role in ensuring that general purpose financial statements of different organizations adhere to generally accepted accounting principles (GAAP). The establishment of the FRRB serves as a proactive mechanism aimed at enhancing financial reporting and auditing practices. To promote better compliance with financial reporting requirements, the board regularly publishes common instances of non-compliance or errors found in financial statements. This discussion will take a closer look at some of the key non-compliances and errors observed by the FRRB in the financial statements of the banks.
A. Non-Reporting of ‘No Segments for reporting’
I. Reporting Issue: A bank has not disclosed anything regarding “Segment Reporting” in the notes to accounts in its financial statements.
II. FRRB Opinion: The bank should have disclosed the fact in its notes to accounts that neither any segment reporting disclosures have been made nor the fact that the bank has only one ‘business segment’ as well as only one ‘geographical segment’ as per the provisions of AS 17, Segment Reporting.
B. Accounting policy on Investment
I. Reporting Issue: A cooperative bank has the following policy on Investments: Investments in subsidiaries/joint ventures are categorized as held to maturity (HTM) and assessed for impairment to determine permanent diminution, if any, in accordance with the RBI guidelines and suitable provisions are made.
II. FRRB Opinion: The cooperative bank has drafted the policy on ‘Investments’ by loosely interchanging the words ‘other than temporary’ with the words ‘permanent diminution’. ‘Permanent diminution’ and ‘other than temporary diminution’ carries altogether different meaning. The bank should have restrained using the word ‘permanent diminution’ instead of ‘other than temporary diminution’.
Click Here To Read The Full Story
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
