This book is intended to assist Chartered Accountants to familiarize themselves with some of the major issues in the process of conversion of accounts of local self-government bodies. In 2002, in response to a request from the Municipal Corporation of Delhi (MCD), the Accounting Research Foundation of the Institute of Chartered Accountants of India had taken up the work of conversion of accounts of the MCD. This study is the first publication on the approach and methodology of the work done by the research team of the ARF. It should be mentioned here that MCD is an extremely complex organization - a territorial jurisdiction of more than a thousand square kilometers, twelve zones and sixty-five departments. It is also an old organization, having managed Delhi for upwards of a century.

This Study also incorporates the viewpoints of the Public Sector Accounting Committee of the International Federation of Accountants, as well as the Government Accounting Standards Board of the USA. Inputs have been taken from the Technical Guide on Accounting and Financial Reporting by Urban Local Bodies published by the ICAI, and recommendations of the Task Force on Accounting & Budget Formats for Urban Local Bodies released by the Comptroller & Auditor General of India. The Study has been enriched also with inputs from France, New Zealand, UK, USA and Australia and the City Governments of New York, San Francisco, Los Angles, Brisbane and Birmingham to all of whom gratitude is owed.

It is well-understood that because of the differing practices and requirements of the Municipal Statutes in the different States of India, and also because of the diverse, and divergent approaches towards accounting in Indian Urban Local Bodies, readers of this Study may still find that there are matters that require adaptation to the ground realities.

Other publications (Limited /Restricted Circulation):

1. Comprehensive Annual Financial Reports of MCD (Joint publication with MCD) 2002-03. (Volume 1 and 2).
2. Quick Guide to Comprehensive Annual Financial Reports of MCD (Joint publication with MCD) 2002-03.
3. Quick Guide to Comprehensive Annual Financial Reports of MCD (Joint publication with MCD) 2003-04.
4. Councillors’ Guide to Finance & Accounts of Municipal Corporation of Delhi, jointly with MCD.

ACCOUNTING ISSUES IN KNOWLEDGE AND TECHNOLOGY INTENSIVE INDUSTRY

A large portion of the elements which create value for business in new economy such as, knowledge, technology, innovation, information, network effects, customers and globalisation are outside the framework of financial reporting. This creates a disconnect between information provided in financial statements and information needs of investors and creditors.

This publication covers present accounting and reporting framework for intangibles, viz., Accounting Standard (AS) 26, Intangible Assets, International Accounting Standard (IAS 38), Intangible Assets, and US GAAP. On the basis of a survey of financial statements of select companies with special reference to biotechnology and information technology companies, the level and quality of compliance with the relevant Accounting Standards have been broadly outlined in the Report. The Report has also recommended a format as best practice guide for non-financial disclosures, consisting of general guidance and disclosure on specific intangible assets and other recommendations regarding various accounting issues raised by the industry.

This Report will go a long way in developing an understanding particularly for accounting and reporting requirements peculiar to knowledge and technology intensive industry in India .