The CSR Committee of the Institute of Chartered Accountants of India (ICAI) has released the Technical Guide on Accounting for Expenditure on Corporate Social Responsibility (CSR) Activities on 1st July 2020, which has also been hosted on the website of the Institute. The document is available in public domain.
The objective of this Technical Guide is to provide guidance on recognition, measurement, accounting, presentation and disclosure of expenditure on activities relating to corporate social responsibility.
“With the increasing importance of the CSR activities, it has been felt necessary to provide guidance to the industry and professionals on the accounting aspects of the CSR Expenditures. This Technical Guide is an effort made by the CSR Committee of ICAI towards meeting the expectations of the professionals and the stakeholders in this respect.”, said CA. Pramod Jain, Chairman, CSR Committee
Background
In India, with the enactment of the Companies Act, 2013 by the Ministry of Corporate Affairs, Government of India, it has now become mandatory for Companies to take up CSR projects on social welfare activities. India is the only country which has regulated and mandated CSR activities to be undertaken by certain categories of companies. In the present times, the ambit of CSR activities has grown manifold and is playing an important part in achieving the sustainable development goals and private-public partnership in nation building. CSR has also played a very important role in supporting the social and economic development of the country during the Covid-19 pandemic.
Section 135 of the Companies Act, 2013 has made it mandatory for companies fulfilling certain criteria, to implement and report CSR policies. Rules framed thereunder and Notifications issued from time to time have provided extensive guidelines on the activities to be undertaken by the companies and the reporting of the same in the Annual Report of the Company.
The ICAI said that, with the increasing importance of the CSR activities, it has been felt necessary to provide guidance to the industry and professionals on the accounting aspects of the CSR Expenditures. This Technical Guide is an effort made by the CSR Committee of ICAI towards meeting the expectations of the professionals and the stakeholders in this respect. Subsequent to the issue of the Technical Guide on Accounting for Expenditure on Corporate Social Responsibility Activities, the Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities, issued on 15th May 2015, stands withdrawn.
“This publication is a laudable effort by the CSR Committee as it attempts to provide guidance on the CSR Accounting related issues, to the members and various other stakeholders.”, said CA. Atul Kumar Gupta, President, ICAI
