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    Accounting Standards

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    ankitsmartu87
    The document discusses accounting principles and standards. It defines accounting principles as rules derived from experience and practice that guide accounting. Generally accepted accounting principles (GAAP) become authoritative when they have substantial support. International and national accounting standards bodies issue standards to harmonize accounting policies. The Institute of Chartered Accountants of India established the Accounting Standards Board to issue 29 national standards in line with international standards.

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    Accounting Standards

    Uploaded by

    ankitsmartu87
    87 views23 pages
    The document discusses accounting principles and standards. It defines accounting principles as rules derived from experience and practice that guide accounting. Generally accepted accounting principles (GAAP) become authoritative when they have substantial support. International and national accounting standards bodies issue standards to harmonize accounting policies. The Institute of Chartered Accountants of India established the Accounting Standards Board to issue 29 national standards in line with international standards.

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    The document discusses accounting principles and standards. It defines accounting principles as rules derived from experience and practice that guide accounting. Generally accepted accounting principles (GAAP) become authoritative when they have substantial support. International and national accounting standards bodies issue standards to harmonize accounting policies. The Institute of Chartered Accountants of India established the Accounting Standards Board to issue 29 national standards in line with international standards.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    87 views23 pages

    Accounting Standards

    Uploaded by

    ankitsmartu87
    The document discusses accounting principles and standards. It defines accounting principles as rules derived from experience and practice that guide accounting. Generally accepted accounting principles (GAAP) become authoritative when they have substantial support. International and national accounting standards bodies issue standards to harmonize accounting policies. The Institute of Chartered Accountants of India established the Accounting Standards Board to issue 29 national standards in line with international standards.

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    c c

    c
    
    à  
        

    
    m 
         
    
     
    m   
     
    m 
         
    
     may
    may be defined as those rules
    of action or conduct which are derived
    from experience and practice and when
    they prove useful, they become accepted
    as principles of accounting.
    m cccording to the  
       !
    
    !  "    #
    the principles which have substantial
    authoritative support become a part of the
    generally accepted accounting principles.
    m |he general acceptance of the accounting
    principles or practices depends upon { $
    $ {  the following 
    
    
    m % c principle is relevant to the
    %
    extent it results in information that is
    meaningful and useful to the user of the
    accounting information.
    m "& % '
    ' connotes / signifies reliability
    and trustworthiness.c
    trustworthiness.c principle is objective to
    the extent the accounting information is not
    influenced by personal bias or judgement of
    those who provide it. it. It also implies verifiability
    which means that there is some way of
    ascertaining the correctness of the information
    reported.
    m à "  
     c principle is feasible
    /practicable / manageable to the extent
    it can be implemented without much
    complexity or cost.
       
    
     
    àoundation pillars on which structure of
    accounting is based
    | | | |
    cccounting Money cccounting Going
    Entity Measurement Period Concern
    cssumption
        
    
     
    muality Revenue Historical Matching
    Principle Recognition Cost

    m àull misclosure - àinancial Statement


    should act as means of conveying and not
    concealing
    w
        
    
     
    |o make the information useful, the basic
    assumptions and principles have to be
    modified

    Cost-Benefit Materiality Consistency


    Cost-
    Principle Principle Principle

    Prudence |imeliness Substance over àorm


        
    m cccounting Bodies all over the world have tried
    to achieve some uniformity in accounting
    policies by prescribing certain accounting
    standards with respect to collection and
    presentation of accounting information.
    m |o formulate the accounting standards, they
    have established a committee called as the
    International cccounting Standards Committee
    (in
    ( in 1973.
    m cccounting bodies of most of the
    countries, including the Institute of
    Chartered cccountants of India, are
    members of this body and these members
    have resolved to conform to the standards
    developed by IcSC
     
    
    m |o formulate the accounting standards,
    cccounting Bodies throughout the world
    established  
        
    (  
     (in 1973.
    (in
    m cccounting bodies of most of the
    countries, including the    !
    {
    
         ! 
    #are
    # are members of this body.
    c
    m International cccounting Standards (IcS)
    have assumed great importance due to ƛ
    m c. Globalization of the economy has led to
    Indian companies expanding their
    operations across the borders and this
    calls for uniformity of accounts of units
    located in different countries.
    m B. àoreign Investors give more weightage
    to accounts based on IcS.
    Õ    c 
     
    m IcS 1 Presentation of àinancial Statements
    m IcS 2 Inventories
    m IcS 3 Cash àlow Statements
    m IcS 8 Net Profit or Loss for the period,
    àundamental Errors and Changes in
    cccounting Policies
    m IcS10 Events after the Balance Sheet mate
    m IcS 11 Construction Contracts
    m IcS 12 Income |axes
    m IcS 14 Segment Reporting
    m IcS 15 Information Reflecting the Effects
    of Changing Prices
    m IcS 16 Property, Plant and Equipment
    m IcS 17 Lease
    m IcS 18 Revenue
    m IcS 19 Employee Benefits
     c   
    m |o harmonize diverse accounting policies
    in India, the Institute of Chartered
    cccountants of India ( ICcI) constituted
    cccounting Standards Board (cSB) in 1977
    m cSB, after considering applicable laws,
    customs, usages and business
    environment , formulated cccounting
    Standards.
    c  
         
    c   
    m In case the Company does not conform to
    any mandatory accounting standards and
    statement of all significant accounting
    policies adopted in the preparation of
    àinancial Statements, the auditor will have
    to qualify his report justifying the
    deviation. If he fails to do so, the ICcI can
    take disciplinary action against such
    auditor for professional misconduct. E.g.
    Satyamsƞs auditor
    c   c 
    c  c
    m |he cccounting Standards Board (cSB) of
    the Institute of Chartered cccountants of
    India (ICcI), has in line with International
    Standards, issued 29 standards to be
    followed by its members while auditing
    the accounts of Companies.
    Õ  c 
    m cS 1 misclosure of cccounting Policies
    m cS 2 Valuation of Inventories
    m cS 3 Cash àlow Statements
    m cS 4 Contingencies and Events occurring
    after the Balance Sheet mate
    m cS 5 Net Profit or Loss for the Period,
    Prior Period and Extraordinary Items and
    Changes in cccounting Policies
    m cS 6 mepreciation cccounting
    m cS 7 Construction Contracts
    m cS 8 cccounting for Research &
    mevelopment
    m cS 9 Revenue Recognition
    m cS 10 cccounting for àixed cssets
    m cS 11 |he Effects of Changes in àoreign
    Exchange Rate
    m cS 12 cccounting for Govt Grants
    m cS 13 cccounting for Investments
    m cS 14 cccounting for cmalgamation
    m cS 15 cccounting for Retirement Benefits
    m cS 16 Borrowing Costs
    m cS 17 Segment Reporting
    m cS 18 Related Party misclosures
    m cS 19 Lease
    cc 
    m (established by à()
    (established à()(àinancial
    (àinancial
    cccounting Standard Board and
    (cmerican
     (cmerican Institute of Certified
    Public cccountants)
    m |he US GccP has nearly 100 cccounting
    Standards as compared to 29 in India.
       c   
    cc
    m 1. Reporting v/s misclosure
    m 2.àorm v/s Sustance
    m 3.cccounting vs cnalysis
    m 4.Globalisation vs Localisation
     cc
     cc
    m 1. àull disclosure
    m 2.Consolidation of Group Company c/ cs
    c/cs
    m 3. Provision for deferred tax liability
    m 4. misclosure of EPS
    m 5. misclosure of Related Party
    |ransactions
    m 6.Cash àlow Statement is compulsory

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