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Reader Comments on ::   BAS for SMEs
The list of companies identified for implementing BAS/IFRS for SMEs in Exibit VII of the Proposal for Implementation is not exhaustive and are indicative only. It may be appropriate for companies (except listed companies) themselves to evaluate whether to adopt BAS for SMEs or full BAS depending on the statutory and accounting requirement. The categorization for implementation of full BAS or BAS for SMEs will depend on the ownership (shareholdings)i.e public accountability and group policies besides other criteria. I believe DHPC is 59% owned by DGPC which inturn is fully owned by DHI, 15% owned by NPPF and 26% owned by Tata Power Company. Since DHI and DGPC have already decided to implement BAS, it will be more relevant if DHPC also follow same accounting policies for easy consolidation by the parent company.
Posted By: Sonam Wangdi      Posted on: 2018-05-15 11:57:13
The Registrar of Companies has issued regulations to say that companies must comply with BAS from 2013. GAAP is dead and history. You have to comply with BAS. End of discussion.
I don't how it was decided that a company the size of DHPC cpuld be a SME, but that isn't the issue. You are a subsidiary of DHI and therefore need to provide information in line with group accounting policies, so that we acn prepare consolidated accounts. You can prepare the company reports in either full BAS or SME, but when the information comes to us it is full BAS. Since you have to prepare using full BAS for the consolidation, why double your work and produce your separate accounts under any other format? Because DHPC isn't trading, there is very little adjustment to be made.
If the auditors are claiming that GAAP still applies, refer them to us at DHI and we will give clear instructions about what the Owners are insisting on. They will carry out their audit work as normal (there are no updates to auditing standards) but the published accounts need to apply BAS.
Is that clear enough?
Posted By: Roy Whittington      Posted on: 2018-05-15 11:57:13
Of late we came to understand that the statutory auditors have not received any directions from RAA regarding the applicability of BAS/IFRS for DHPC and and they had accordingly intimated RAA stating that they would be conducting the audit as normal like the previous years to which RAA endorsed as BAS for SMEs is applicable from 2014 onwards only.
In other words,the RAA will have no issue in auditing the financial statements for the year ended 31 December 2013 prepared in accordance with the old format.
Posted By: Hem Nepaul      Posted on: 2018-05-15 11:57:13
The schedule in the book "A proposal of Implementation January 2012: includes Dagachu in its list of companies that qualify as a SME.
Dagachu is 59% owned by DGP which in turn is 100% owned by DHI. Since DHI is presenting consolidated accounts in line with BAS 27, we will be consolidating DHPC We are therefore looking at sections 24 and 25 of BAS 27.
All group companies need to apply the same accounting policies. If a subsidiary uses different accounting policies, the financial statements need to be adjusted to eliminate the variance in accounting policies.
Dagachu is going to have to supply all the information on all the differences in accounting policies so that our consolidation can be done. They will end up doing their accounts in SME and in BAS. It seems simpler if they just apply full BAS and group accounting policies from day 1 and save themselves the extra work (and save us the extra work too)
Posted By: Roy Whittington      Posted on: 2018-05-15 11:57:13
As per notification, implementation of BAS for SMEs (as applicable to DHPC) is effective from January 2014. Is it necessary or advisable to start aligning our 2013 accounts in line with BAS or could be started from 2014 onwards and align with 2013 (comparative)as this seems to be the understanding between RAA (CFID) and our statutory auditors? Please advise. Thanks
Posted By: Hem Nepaul      Posted on: 2018-05-15 11:57:13

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