A PRESENTATION ON ACCOUNTING STANDARDS

PREPARED BY: Sheenu Khurana (MBA LECTURER)

TOPICS COVERED

Meaning of Accounting Standards. Definition of Accounting Standards. Characteristics of Accounting standards. Objectives of Accounting standards. Procedure for Issuing Accounting Standards in India. Accounting standards in India. Significance of Accounting Standards.

MEANING OF ACCOUNTING STANDARDS

Accounting standards are the norms of the accounting, codified by some professional body and making them mandatory for recording and reporting purposes. Accounting standards are written statements of accounting rules and guidelines to prepare financial statements. It may also be said that Accounting standards are codified forms of GAAP.

DEFINITION OF ACCOUNTING STANDARDS

According to Kohler, Accounting standards are codes of conduct imposed by customs, law or professional bodies for the benefit of public accountants and accountants generally.

CHARACTERISTICS OF ACCOUNTING STANDARDS

1)

2) 3)

Prescribe a system of financial measurement and disclosure which is used to prepare and present fair financial statements. They lay down the boundaries within which acceptable conduct should lie. They suggest rules and criteria for measurement and presentation of financial statements.

OBJECTIVES OF ACCOUNTING STANDARDS

1.

2.
3. 4. 5.

To bring standardization in presentation. To harmonize the diverse accounting policies. To bring transparency. To Provide direction. To Provide Meaningful information to users.

PROCEDURE FOR ISSUING ACCOUNTING STANDARDS IN INDIA

1. 2. 3. 4.

5.
6. 7. 8.

9.
10.

Determination of Broad Areas. Preparation of Accounting Standards. Draft of Proposed Standard. Consideration of Preliminary Draft. Circulation of the Draft. Finalization of Exposure Draft. Sending Exposure Draft for comments. Finalization and submission to council. Issuance of standard by ICAI (Institute Of chartered Accountants of India). Revision

ACCOUNTING STANDARDS IN INDIA

AS 1 Disclosure of Accounting Policies AS 2 Valuation of Inventories AS 3 Cash Flow Statements AS 4 Contingencies and Events Occurring after the Balance Sheet Date AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies AS 6 Depreciation Accounting AS 7 Construction Contracts AS 8 Accounting for Research and Development AS 9 Revenue Recognition AS 10 Accounting for Fixed Assets AS 11 Effects of Changes in Foreign Exchange Rates

CONTINUED

AS 12 Accounting for Government Grants AS 13 Accounting for Investments AS 14 Accounting for Amalgamations AS 15 Employee Benefits AS 16 Borrowing Costs AS 17 Segment Reporting AS 18 Related Party Disclosures AS 19 Leases AS 20 Earnings Per Share

CONTINUED

AS 21 Consolidated Financial Statements AS 22 Accounting for Taxes on Income AS 23 Accounting for Investments in Associates in Consolidated Financial Statements AS 24 Discontinuing Operations AS 25 Interim Financial Reporting AS 26 Intangible Assets AS 27 Financial Reporting of Interests in Joint Ventures

CONTINUED

AS 28 Impairment of Assets AS 29 Provisions, Contingent Liabilities and Contingent Assets AS 30 Financial Instruments: Recognition and Measurement AS 31 Financial Instruments: Presentation AS 32 Financial Instruments: Disclosures.

SIGNIFICANCE OF ACCOUNTING STANDARDS

1.

2.
3. 4. 5.

6.
7.

Reliability and credibility. Consistency and comparability. Resolving conflicts of financial interest. Reduction in the chances of frauds and manipulations. Helpful to accountants and auditors. Helpful to Investors. Helpful to government.