Govt steps in to cushion India Inc’s forex losses

The government has paved the way for Indian Inc to guard its margins from taking a blow dealt by foreign exchange losses, which have been incurred as a result of high depreciation in the value of the rupee against other currencies.

The admiral of accumulated affairs, which is the government's authoritative admiral on affairs of accounting policies, has austere suggestions of the National Advisory Committee on Accounting Standards (Nacas) to accompany in changes to an accounting norm, frequently accepted as AS11, and which calls on companies to mark-to-market their adopted barter assets or liabilities.

"The suggestions, which accept been drafted in the anatomy of a notification, accept now been beatific to the Government Press for publication," said an official in the ministry, on altitude of anonymity. According to the changes accustomed by Nacas, companies accept been accustomed an advantage either to chase AS11 or to capitalise on the losses that they accept incurred as a aftereffect of the forex fluctuations.

With this change in place, corporates can go advanced to aegis their bottomlines from the abrogating furnishings of such losses, as they sit to adapt their anniversary banking after-effects for 2008-09. The changes accept been austere as a concise accouterment till April 2011, back India is set to assemble with the International Banking Reporting Standards.