12/31/2022 0 Comments Cash monies![]() ![]() Ideally there would be group accounting policy approved by board of directors & audit committee, which will clearly specify the accounting events and treatment along with local legal entity accounting policy as per local GAAP and laws. The risk of non compliance & improper accounting of unclaimed monies can give sleepless nights to many top officials of any company including CFO and CEO and for this reason the multinational companies have specific teams/ officials responsible for compliance around it and may also create centre of excellence at one location for such process with local compliance teams, accounting team, operations team, reporting team, internal audit team and Risk governance team working together to ensure proper hand offs, audit trail and proper recording, accounting and reporting for each transaction under this ambit. Even the banking regulations across the globe have stringent rules around unclaimed monies because at the end of the day it’s someone’s hard earned money. Organizations spend huge dollars to ensure such compliance by maintaining proper records (as in some countries the specific period can be even more than a decade), governance and proper audit trail as non compliance would lead to regulatory breach and impact the company’s reputation. The local laws may prescribe specific due diligence (to substantiate efforts made) procedures for locate right owner, treatment for unclaimed monies after specified period which can be either treating it as revenue, escheatment to government or may have to hold it for indefinite period. It’s a tight rope to walk upon as companies have to abide to laws and regulations around unclaimed monies in each country of operation. While above definition may sound to be very simple but in real world ensuring right accounting and regulatory treatment of such monies can be nightmare especially for multi-national organizations operating in multiple jurisdictions following local GAAPs and then for parent entity consolidated results either as per USGAAP or IFRS. ![]() Unclaimed monies is the obligations of any Company to its customers, vendors, employees, business partner or shareholders or any other party, that remain unclaimed and outstanding for a specific period of time and for which the Company has been unable to locate the rightful owner through the efforts made. Also, covers the different possible treatment of unclaimed monies and some specific rules around it in India At a high level the accounting treatment as per IFRS and USGAAP are also outlined. Executive Summary: The below article gives an overview on treatment and accounting of unclaimed monies by a Company as per the laws and regulations of the jurisdiction in which the company operates. ![]()
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