Taking accounting to a higher level

September 13, 2012: With the country developing and engaging with the outside world in an unprecedented way, the need of a standard accounting system has emerged. Towards this end, a six day work- shop/training began on September 10 here for the accounts key personnel of listed companies, financial institutions and government agencies on the Bhutanese Accounting Standards (BAS), which was launched in April this year.

Financial statements prepared with compliance to BAS would help entities in avoiding multiple reporting and improve the comparability of financial statements with its previous year and other entities.

The Accounting and Auditing Standards Board of Bhutan (AASBB) with faculty support from Institute of Chartered Accountants of India is organizing the training.

Three faculties from Institute of Chartered Accountant India (ICAI) who have experience in International Financial Reporting Standards (IFRS) are the resource persons.

Senior Accounts officer from AASBB Tshechu said “the participants will be trained on 18 Bhutanese Accounting Standards which are due to be implemented from January 2013”.

The main objective of six days program is to make all the key accounts personal of those companies ready for 2013 where they will be required to 

prepare their annual financial statement with compli- ance to BAS (Phase I).

He further said that it would improve consistency and transparency of financial statements. Adoption of BAS would even enable the Bhutanese entities to have access to international capital market with improved financial statements. “The IFRSs being globally accepted accounting standards, its adoption in Bhutan would raise the confidence of foreign investor and attract more FDI in different sectors within the economy,” he added.

Mayur Shokshi from ICAI said it is a very good initiative by the government, AASBB, and Minis- try of Finance (MoF).

Meanwhile, Tshechu said that, although the Companies Act of the Kingdom of Bhutan 2000 required the registered companies to maintain their Books of Accounts based on Generally Accepted Accounting Prin- ciples (GAAP), “Bhutan does not have its own stan- dards.” “So with the growing numbers of companies in the country and opening up of Bhutanese economy to the outside world for trade and investment, it has become necessary to have such standards”.

To spearhead the development of accounting and auditing standards, the Cabinet in its 69th Session held on 30 April 2010 formally approved the formation of the Accounting and Auditing Standards Board of Bhutan (AASBB) based on the proposal submitted by the MoF.

Since then AASBB has held several Board Meetings where deliberations were held mostly on developing their own Accounting Standards known as BAS( Bhutan Accounting Standards) or to adopt International Financial Reporting Standards (IFRS), which has been embraced and adopted by many countries.

Four Options was studied by the AASBB; continue with the existing accounting practice; develop new Bhutanese Accounting Standards; adopt Indian Accounting Standards and adopt Inter- national Financial Report- ing Standards (IFRSs).

Giving due cognizance to each of the four options, the Board preferred to propose and recommend IFRS “since the option appears to have more advantages than disadvan- tages” he said.

The Board has decided to implement IAS/IFRS in a phased manner dividing them into three phases to be completed by 2019. 18 standards would be issued in the first phase (2013 – 2015), nine in the second phase (2016 – 2017) and 10 standards in the final phase from 2018 to 2019.

“To achieve full compli- ance of IFRS by 2021, the phase-wise implementa- tion of IFRS will be called as BAS. Certain customizations wherever necessary have been carried out in each standard and certain requirements as outlined in the IFRS will be relaxed until full adoption by 2021,” Tshechu said, adding that starting next year it will be mandatory for all the listed companies to follow Bhutan Accounting Standard.


Jan 05, 2014    News    Admin

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