Financial reporting of non banking financial companies means to show prudential financial reports of Non Banking Financial Companies. We also say NBFCs in short form. RBI Act 1934, its amendment 1997 and 2000, company act 1956 and ICAI's accounting standard apply on the financial reporting. Following are its main features.
1. RBI has fixed 20% reserve fund. Every NBFC must transfer 20% of his profit after tax and before dividend annually to reserve fund. It is duty of auditor of NBFC to check whether this condition is OK in financial reports or not.
2. Financial reports will be made after every six months. Financial year will start from 1st April. 31st march and 30th sept. will be date in which NBFC has to show its financial results.
3. In financial reporting, acceptance of public deposits; prudential norms like capital adequacy, income recognition, asset classification, provisioning for bad and doubtful assets should be shown as per the direction of RBI.
4. Its financial report should show the 15% of outstanding public deposit's investment in liquid assets.
5. NBFC can not get loan or issue loan on the basis of his own shares.
6. Current investment will be valued at cost and fair market value which is lower.
7. Auditor should also see whether all NBFCs necessarily hold their investments in government securities either in Constituent’s Subsidiary General Ledger Account (CSGL) or not. It is necessary for NBFCs to invest and show some investment in govt. securities.
Related : Federal Fund Rate
1. RBI has fixed 20% reserve fund. Every NBFC must transfer 20% of his profit after tax and before dividend annually to reserve fund. It is duty of auditor of NBFC to check whether this condition is OK in financial reports or not.
2. Financial reports will be made after every six months. Financial year will start from 1st April. 31st march and 30th sept. will be date in which NBFC has to show its financial results.
3. In financial reporting, acceptance of public deposits; prudential norms like capital adequacy, income recognition, asset classification, provisioning for bad and doubtful assets should be shown as per the direction of RBI.
4. Its financial report should show the 15% of outstanding public deposit's investment in liquid assets.
5. NBFC can not get loan or issue loan on the basis of his own shares.
6. Current investment will be valued at cost and fair market value which is lower.
7. Auditor should also see whether all NBFCs necessarily hold their investments in government securities either in Constituent’s Subsidiary General Ledger Account (CSGL) or not. It is necessary for NBFCs to invest and show some investment in govt. securities.
Related : Federal Fund Rate
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