Nepal Rastra Bank (NRB) – the central regulatory and monetary authority – has provided additional time for commercial banks to publish their unaudited financial statements from the fourth quarter of the previous fiscal 2017-18 to the end of ongoing fiscal 2018-19.
Amending the provision, under which banks and financial institutions have to publish the financial statements within 15 days of the quarter-end, the central bank has allowed commercial banks to disclose balance sheets within 30 days of the quarter-end. However, class ‘B’ and class ‘C’ financial institutions have to publish their unaudited balance sheets within 15 days of the quarter-end.
NRB has extended the timeframe by 15 days for commercial banks owing to changes in the accounting and reporting standards. Only a few banks have published the fourth quarter balance sheet of the previous fiscal and the previous 15-day time period to publish the financial statement of the fourth quarter of last fiscal will elapse on Tuesday. But the central bank’s circular issued today has provided class ‘A’ banks additional 15 days, which will fall in mid-August.
Only two commercial banks have published the fourth quarter financial statement of fiscal 2017-18. However, their balance sheets are not as per Nepal Financial Reporting Standards (NFRS).
Nepal Bank and Citizens Bank International have published the unaudited financial report of the fourth quarter of fiscal 2017-18 that has not compliant with the NFRS despite NRB instructing banks in November 2017 to publish financial reports based on the advanced accounting and reporting format from the last quarter of fiscal 2017-18.
Nepal Bank has replied that its financial report was prepared on the earlier format due to the issue of its respective FPO. They will again prepare their financial report as per NFRS. The central bank has directed the banks to publish NFRS-compliant and non-compliant financial statements simultaneously, which is why other commercial banks have replied that they have been preparing the fourth quarter report based on the NFRS.
As per the circular of NRB, commercial banks must publish their financial reports in the regular format and as per NFRS from the fourth quarter of fiscal 2017-18 and clearly disclose the difference of profit and loss between the two financial statements.
NFRS is the new accounting and reporting method developed by the Accounting Standards Board Nepal, based on the International Financial Reporting Standards (IFRS) for the uniformity of financial reports across the world and more than 120 countries have already adopted the standards.
The regulator of accounting standards in Nepal, the Institute of Chartered Accountants of Nepal (ICAN), had made NFRS mandatory for commercial banks or class ‘A’ financial institutions from fiscal 2015-16. However, the regulator of the financial sector, NRB, made it mandatory only from the fourth quarter of the previous fiscal. ICAN has made it mandatory for auditors to prepare the report as per NFRS standard since fourth quarter of this fiscal by converting financial statements of two consecutive previous fiscals as per NFRS.
Source: The Himalayan Times