Kathmandu. The Accounting Board Nepal has made public the draft of the accounting document related to the presentation and disclosure in the financial statements and invited suggestions and feedback from the stakeholders.
The Board has made public the draft of NFRS 18 and NFRS 19 under the Nepal Accounting Standard through its website { and has requested the stakeholders to send their suggestions via email at [email protected] by November 22.
According to the Board, after the implementation of NFRS 18 according to the proposed draft, companies will have to classify income and expenses according to the new structure. In particular, income and expenses will be presented in categories including operations, investments, and finances. Its implementation may also necessitate changes in the accounting heading, accounting system, ERP, financial statement format, internal reporting, and integration process of companies. According to the Board, the new classification of income and expenses and the preparation of comparative data may require additional technical preparation and additional investment by the relevant entity at the initial stage.
According to the chairman of the board, Ramesh Dhital, after the implementation of the proposed draft, the insurance companies will also have to change the financial statement format. After its full implementation, the regulator can give necessary instructions to the insurers regarding the financial statements.
Due to the new provision, insurance companies, banks and financial institutions, investment businesses, and other sector entities may require further consideration and business decisions regarding the classification of income and expenses according to the nature of their core business activities. The impact of NFRS 18 will vary according to the company’s current accounting presentation and the nature of the business.
The Board of Accountants Nepal has released the draft of NFRS 18 at a time when the insurer has been pressuring the government to postpone the deadline for the implementation of NFRS 17.
The board said that after the implementation of NFRS 18, there will be significant changes in the presentation of profit and loss statements and the classification of income and expenditure, which can also have an impact on accounting education and curriculum. According to the board, the new presentation system, classification and defined uses may need to be amended in the accounting curriculum, textbooks and study materials taught from the school level to the university level. Similarly, accounting teachers, students, accountants and other stakeholders may need to be given the necessary orientation and capacity development on the new system.
