"We intend to substantially improve transparency and disclosure levels and bring Indian accounting standards at par with international accounting The Financial Express.

The ICAI is working on proposing accounting and disclosure norms in key areas that will significantly improve disclosure levels, Mr Sitharaman said.

"Disclosure to match international standards becomes all the more necessary with more and more Indian corporates looking to raise funds in overseas markets, Mr Sitharaman said.

At present, the institute has made 18 accounting standards mandatory, which will go up to 32 by the end of the year. Out of these, three will be in the form of guidance notes which will become accounting standards in a few months' time.

"The ICAI has already set up teams to draft these accounting standards. We hope to make almost all international accounting standards mandatory in India after incorporating changes arising out of equal implications and other differences in operating conditions," Mr Sitharaman said. After making segment reporting, the capitalisation of borrowing cost and related party disclosure mandatory for Indian corporates, the ICAI is now seriously working towards drafting various accounting standards in various accounting areas including, `accounting for investments in associations', `financial reporting of interest in joint ventures', the `discontinuation of operations', the `impairment of assets' and `intangibles'.

TheICAI is also seeking amendments to schedule VI of the Companies Act to include details of construction contracts in the form of accounting standards. By making these accounting standards mandatory for Indian corporates, says the ICAI, investors will be benefited from disclosures to be made in balance sheets. These accounting standards will help bring the true picture of a corporate to the public's notice, says Mr Sitharaman.

Recently, the ICAI restricted Indian corporates from overstating their profits through the capitalisation of borrowing cost. The introduction of accounting standard (AS) 16 will discourage corporates from charging undue depreciation on assets by boosting asset values. The ICAI has made it mandatory for corporates to capitalise borrowing costs from April 2000.

It has also made it mandatory for companies to give full details of transactions between companies if they have a common owner or common directors with a substantial interest in their annual reports. This will come into effect from April 1, 2001. Disclosures of transactions pertaining to related parties will come under AS-18 and will apply to the financial statements of each company and also to the consolidated financial statements presented by a holding company.