By Isha Dalal, CNBC-TV18

Things are not getting easier for Indian corporates and auditors. After making it mandatory for full disclosure of forex derivative losses, the Institute of Chartered Accountants of India, or ICAI, is cracking down even further on accounting disclosures.

Ranbaxy, L&T and more recently Himatsingka Siede; these are three different sized companies in different fields, that have all had to deal with losses on account of forex derivatives. Accounting for such losses is already a touchy issue for Indian corporates. It's not going to get any easier.

ICAI is looking to make these disclosures more transparent. At its Council meeting last week, the Institute approved a new accounting standard-AS 32-to ensure just that.

What exactly is AS 32?

“There are a lot of qualitative and quantitative disclosures to be made. It also includes a sensitivity analysis. In case there is a 1% change in interest rate or currency rate, what would be the impact of that on their holding at the end of that particular period?” said Pankaj Jain, Council Member, ICAI.

Under AS 32, companies must make disclosures in a manner that will help people reading financial statements assess risks. To this effect, companies will have to disclose not just the quantity of risk involved in money terms, but also qualitative information on the risks arising from these instruments.

ICAI recommends AS 32 be implemented starting 2009. However, the standard is scheduled to become mandatory only in April 2011. AS 32 is part of the ICAI’s ongoing effort to bring Indian accounting standards closer to the international financial reporting standards, or IFRS. That is a standard that the Department of Company Affairs has proposed will also be implemented in 2011.