Draft amendments for Companies (Cost Records and Audit) Rules, 2014

bse circular The Ministry of Corporate Affairs (MCA) has issued draft Companies (Cost Records and Audit) Amendment Rules, 2017 to amend the Companies (Cost Records and Audit) Rules, 2014 and also issued notice dated 11th August, 2017 inviting suggestions/comments on the draft amendments.

The Companies (Cost Records and Audit) Rules, 2014 was notified on 30th June, 2014 when financial records of the company were prepared as per the Companies (Accounting Standard) Rules, 2006. After the advent of the Companies (Indian Accounting Standards) Rule, 2015, (here in after referred to as Ind AS Rules) and pursuant to the Rule 4(1)(ii) of the said Ind As Rules, the following companies shall comply with the Ind AS Rules for the accounting periods beginning on or after 1st April, 2016, with the comparatives for the periods ending on 31st March, 2016, or thereafter, namely:-  (a) companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having Net worth of rupees five hundred crore or more;  (b) companies other than those covered by sub-clause (a) of clause (ii) of sub- rule (1) and having net worth of rupees five hundred crore or more;  (c) holding, subsidiary, joint venture or associate companies of companies covered by sub-clause (a) of clause (ii) of sub- rule (1) and sub-clause (b) Of clause (ii) of sub- rule (1) as the case may be;

Again as per Rule 4(1)(iii) of Ind AS Rules, the following companies shall comply with the Ind AS for the accounting periods beginning on or after 1st April, 2017, with the comparatives for the periods pending on 31st March, 2017, or thereafter, namely:-  (a) companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of less than rupees five hundred crore; (b) companies other than those covered in clause (ii) of sub- rule (1) and sub-clause (a) of clause (iii) of sub-rule (1), that is, unlisted companies having net worth of rupees two hundred and fifty crore or more but less than rupees five hundred crore.  (c) holding, subsidiary, joint venture or associate companies of companies covered under sub-clause (a) of clause (iii) of sub- rule (1) and sub-clause(b) of clause (iii) of sub- rule (1), as the case may be:

So, in order to bring parity between financial records and cost records of the company, draft amendments in the Companies (Cost Records and Audit) Rules, 2014 were made public. They shall come into force from the date of their publication in the official gazette and shall be applicable for the financial years commencing on or after 1st April, 2016. A comparative analysis of major amendments are also provided in the notice inviting suggestions/comments latest by 26th August, 2017 through email at comments_cra@mca.gov.in.

 The notice and comparative analysis of amendments can be viewed here. notice_11082017

 

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