06 August 2008
The ICAI in 1995 had clarified that Accounting Standard will not apply to NPOs unless any part of its activity is commercial, industrial or business in nature. Itwas also clarified that even if a very small proportion of the activities of an entitywas considered to be commercial, industrial or business in nature, then it couldnot claim exemption from the application of Accounting Standards. TheAccounting Standards would apply to all its activities including those which werenot commercial, industrial or business in nature.”
Now by virtue of the recent "TECHNICAL GUIDE ON ACCOUNTING AND AUDITING IN NOT-FOR-PROFIT ORGANISATIONS", ICAI has withdrawn its earlierposition and has recommended that NPOs should follow accounting standardseven if no part of its activities is commercial, industrial or business in nature
CAclubindia
