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| Sunday, 20 October 2002 |
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SLAS to match int'l standards by 2003 The Sri Lanka Accounting Standards (SLAS) will be on par with the International Accounting Standards (IAS) by the end of next year. According to Chairman SLAS Committee Reyaz Mihular, SLAS has to adopt the standards 39, 40, 41 as well as the standard on deferred tax and pensions to fall in line with the IAS. Commenting on the delay in adopting IAS 39, he said the International Accounting Standards Board has started a project to improve and effect amendments to the IAS 39 standard. Therefore, the Accounting Standards Committee has decided to await the amended version before adopting the standards, he added. He said that companies have various financial instruments and IAS 39 seeks to achieve uniformity in accounting for these instruments. All accounting standards address four basic areas - recognition, measurement, presentation and disclosure. IAS 32 deals with presentation and disclosure while IAS 39 deals with recognition and measurement. Recognition and measurement of financial institutes were earlier based on historical cost while IAS 39 requires measurement at fair values. This has caused problems as the fair value cannot be reliably determined for financial instruments under certain circumstances. Under the Sri Lanka Accounting and Auditing Standards Act of 1995, the Sri Lanka Accounting Standards Committee, Sri Lanka Auditing Standards Committee and the Sri Lanka Accounting Standards Monitoring Board were set up. The Accounting Standards Committee has 12 members. Six members are from the Institute of Chartered Accountants of Sri Lanka (ICASL) while the others comprise two members from the Chambers and one each from the Securities and Exchange Commission, Central Bank, Registrar of Companies and the Chartered Institute of Management Accountants. The committee reviews and recommends the Standards to the Council of the ICASL and once adopted by the Council, the standards become law. Mr Mihular said SLAS endeavours to comply with the IAS at all times, with necessary modifications to suit our country. He said Sri Lanka depends on Foreign Direct Investment and attracting investors is facilitated if the country adopts the IAS which is understood by everybody. If we do not adopt the international standards and continue with our own, it may create confusion in the minds of investors who are conversant with the international standards. "If a company wants to list itself overseas, this can be done without incurring major costs if we comply with the IAS. "It also gives the much needed transparency for company performance," he said. |
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