AN OBSERVATION OF DISCLOSURE PRACTICE REGARDING PROPERTY, PLANT AND EQUIPMENT ON TEN LISTED INDIAN COMPANIES

Abstract

Financial Reporting provides useful information for decision making purpose by external users, which depends on the nature and extent of information disclosed by corporate entities. Accounting Standards plays an important role in enhancing usefulness of information contained in corporate financial reports by providing different types of accounting principles and policies. The rapid growth of international trade and trans-nationalization of the corporations necessitated global convergence of diverse accounting practices. On 16^th February 2015, in exercise of the powers conferred by Section 133 read with section 469 of the Companies Act, 2013 the Central Government, has introduced the Companies (Indian Accounting Standards) Rules, 2015 (Companies Act, 2015). One of the important Indian Accounting Standard, Ind AS 16, Property, Plant and Equipment deals with recognition, measurement and disclosure of Property, Plant & Equipment (PP&E) and related depreciation on such assets. The objectives of the study are to assess the disclosure level in relation to property, plant and equipment made in the annual reports of top manufacturing companies in India and to compare the disclosure level relating to property, plant and equipment before and after implementation of Ind AS 16. For this purpose, the annual financial statements were studied for the year 2015-16 and 2016-17 of top 10 Indian manufacturing companies and to show the difference, if any, relating to disclosure practice on Property, Plant and Equipment