YASASWI GOMES
(49 Points)
Replied 07 August 2020
applicability of accounting standards for NGO’s is limited, as it is community services oriented probably and does not generate excess profits as the profit margins are lower than a normal company. As of now, I think those entities which fall under NGO classification just report sales, expenses, donation income, contributions by member societies, charities and government grants. The IndAS 20 is one standard which prescribes treatment for government grants given to companies/NGO’s and there are no specific guidelines in IndAS 1 to preparers of financial statements for NGO’s, but they can prescribe this standards treatment not unless AS has a separate treatment. There is no corporate tax, but employee benefits (IndAS 19) is applicable as I checked the scope for this standard and it is applicable to all employees.
https://www.mca.gov.in/MinistryV2/Stand.H T M L
YASASWI GOMES
(49 Points)
Replied 07 August 2020
Actually on a second thought, IndAS is not applicable is that NGO’s turnover is equal to more than 250 crores. Forgot to mention this. If it classified as IndAS company, then all standards are applicable.
Vandhana
(Article Assistant)
(25 Points)
Replied 07 August 2020
YASASWI GOMES
(49 Points)
Replied 07 August 2020
Famous examples of Section 8 companies include Federation of Indian Chambers of Commerce and Industry (FICCI) and Confederation of Indian Industries (CII). IndAS supervisory board consists of FICCI and CII, both belonging to section 8 companies category but if they technically report in IndAS or AS is not known to me because google search could not find their financial statements. However, as per rule 3 of the companies rules, 2015, companies which are not required to follow Indian Accounting Standards (Ind AS) shall continue to comply with Accounting Standards as prescribed in Companies (Accounting Standards) Rules, 2006.
CAclubindia
