By Amaka Abayomi

LAGOS — The Central Bank of Nigeria, CBN, has directed  microfinance banks (MFBs), primary mortgage institutions (PMIs) and finance companies (FCs) to adopt a uniform accounting year end.

It would be recalled that banks adopted a common year end of December 31 in 2010.

In a circular to other financial institutions, the CBN said: “In order to avoid  regulatory arbitrage and provide level playing field for all operators, it has become necessary to adopt common accounting year end in the other financial institutions  (OFIs) sub-sector.

The circular signed by Director, Financial Policy & Regulatory Department, CBN, Mr. Chris Chukwu, said: “The CBN circular BSD/DIR/GEN/CIR/VOL.2/004 of June 18, 2009, that requires all banks and discount houses in Nigeria to adopt 31st December as a uniform accounting year-end from 2009 shall henceforth be applicable to OFIs.

“For the avoidance of doubt, all PMIs, MfBs and FC are required to adopt 31st December as their accounting year-end with effect from December 2012. Accordingly, directors of OFIs are hereby advised, as a first step, to pass a resolution to that effect and inform the relevant agencies in line with section 334(4) of the Companies and Allied Matters Act (CAMA) 1990 as amended.

“During the period of transition, a maximum accounting period of 18 months and a minimum of six months are allowable, in line with accepted accounting practice. In the circumstance, OFIs whose accounting year end on 31st December should forward their full year’s account for CBN approval not later than four months after the year-end.”

“Those   with year-ends between January and May 2012 should submit the normal audited accounts (12 months) for CBN approval and thereafter submit their audited accounts for the pro-rated period to 31st December 2012.”