11-07-2007, 01:31 PM
Dear Shoaib,
When 4th schedule was revised SECP issued a circular (I think it was issued in October 2005) that the already recognized deferred cost may not be totally reversed as per IAS 8 by adjusting opening balances of deferred cost and retained earnings. Rather, it prescribed that the already recognized deferred cost would be allowed to carry in the balance sheet and amortize within the period specified as per already adopted and disclosed accounting policy. However, it strictly abstained from deferring any more costs after revision of 4th schedule. This rqeuired modification to such extent in the accounting policy of deferred costs.
So, companies carried the deferred cost and amortized it at the rate (within the years) stated in the accounting policy, but never deferred any cost after revision of 4th schedule.
So such transitional provisions are provided through notifications, circulars or other legislative pronouncements.
Now, after revision of 5th schedule no such transitional provision has been specifically annoounced so far (as per my info). But it would be logical to follow what listed companies had followed in this situation some two years earlier.
This could be understood as a general guideline.
Regards,
Kamran.
When 4th schedule was revised SECP issued a circular (I think it was issued in October 2005) that the already recognized deferred cost may not be totally reversed as per IAS 8 by adjusting opening balances of deferred cost and retained earnings. Rather, it prescribed that the already recognized deferred cost would be allowed to carry in the balance sheet and amortize within the period specified as per already adopted and disclosed accounting policy. However, it strictly abstained from deferring any more costs after revision of 4th schedule. This rqeuired modification to such extent in the accounting policy of deferred costs.
So, companies carried the deferred cost and amortized it at the rate (within the years) stated in the accounting policy, but never deferred any cost after revision of 4th schedule.
So such transitional provisions are provided through notifications, circulars or other legislative pronouncements.
Now, after revision of 5th schedule no such transitional provision has been specifically annoounced so far (as per my info). But it would be logical to follow what listed companies had followed in this situation some two years earlier.
This could be understood as a general guideline.
Regards,
Kamran.
