Effect of Changing Accounting Period from Jan- Dec. 2009 to Apr-Mar. 2010

Large companies are changing their accounting period from Jan-Dec. 2009 to Apr-Mar 2010. By doing so, the companies would be required to publish balance sheet only for the fiscal year which is also the statutory requirement under Income-Tax Act, instead of preparing separate financial statements for two different accounting periods.

Accountants of these companies have to make 15 month's final accounts. All the accounting results from 1 Jan. 2009 to 31st March 2010 should be added in the profit and loss account for the period of 15 months. Balance sheet will also show the the changing in the financial position of company of 15 month as on 31st march 2010.

It is mandatory for Indian companies to prepare balance sheet for April-March period for income tax purpose. It makes sense to follow common accounting period of April-March to avoid inconveniences caused by the shortage of manpower and extra cost that goes into preparing two balance sheets for different periods," said Bhupendra Shah, a Mumbai-based chartered accountant. He also feels comparison of financial statements is possible between group concerns or industry peers when a common accounting period is followed.