ACCOUNTANCY AN INDIAN PERSPECTIVE

Presented By:Hemant kumar,Arman singh,Rakesh

ACCOUNTING
BRANCHES OF ACCOUNTING

FINANCIAL ACCOUNTING

COST ACCOUNTING

MANAGEMENT ACCOUNTING

G.A.A.P
CONCEPTS

CONVENTIONS

SEPERATE ENTITY GOING CONCERN MONEY MEASUREMENT ACCOUNTING PERIOD MATCHING REALISATION DUAL ASPECT COST CONCEPT

CONSERVATISM MATERIALITY CONSISTENCY FULL DISCLOSURE

Types of Accounts

Personal A/C (Persons) Rule: Dr.The Receiver Cr. The Giver

Real A/C (Assets) Rule: Dr.What Comes In Cr.What Goes out

Nominal A/C (Exp./Gains) Rule: Dr.All Exp./Losses Cr.All Gain/Profit

Natural

Artificial

Representative

Accounting
Standards

MEANING

Accounting Standards are written policy documents issued by expert accounting body or by government or other regulatory body covering the aspects of recognition,measurement,presentation and disclosure of accounting transactions in the financial statements. Accounting standards are devised to furnish useful information to different users of the financial statements.

OBJECTIVES OF AS

To remove variations in the treatment of several accounting aspects and to bring about standardization in presentation. To harmonize the diverse accounting policies followed in the preparation and presentation of financial statements by different enterprises so as to facilitates intra firm and inter firm comparison

EVOLUTION OF AS

Started from United States As early as in 1932-34 the American Institute of Accountants(now known as American Institute of Certified Public Accountants),Collaborated with the New York Stock Exchange in formulation of five rules or principles of accounting to narrow down the variation in Accounting policies.

cont

In 1959 the American Institute of Certified Public Accountants established the Accounting Principles Board with the objective of carrying on research . Currently ,standards setting boards or committees are active in number of countries including United States,United Kindom,Australia,Canada,India etc.

ACCOUNTING STANDARDS IN INDIA

The Institute of Chartered Accountants of India established on 22nd April 1977,an Accounting Standard Board in order to bring uniformity in terminology approach and presentation of accounting results. In all 32 Accounting Standards have been prescribed .However their applicability is dependent on its size Level 1 Level 2 and Level 3 Company.

Compliance with Accounting Standards issued by ICAI

Sub Section(3A) to section 211 of Companies Act, 1956 requires that every Profit/Loss Account and Balance Sheet shall comply with the Accounting Standards. 'Accounting Standards' means the standard of accounting recommended by the ICAI and prescribed by the Central Government in consultation with the National Advisory Committee on Accounting Standards(NACAs) constituted under section 210(1) of companies Act, 1956.

Accounting Standards Issued by the Institute of Chatered Accountants of India are as follows

Disclosure of accounting policies: Valuation Of Inventories: Cash Flow Statements Contingencies and events Occurring after the Balance sheet Date Net Profit or loss For the period, Prior period items and Changes in accounting Policies. Depreciation accounting.

cont

Construction Contracts. Revenue Recognition. Accounting For Fixed Assets. The Effect of Changes In Foreign Exchange Rates. Accounting For Government Grants. Accounting For Investments. Accounting For Amalgamation. Employee Benefits. Borrowing Cost. Segment Reporting. Related Party Disclosures. Accounting For Leases.

cont

Earning Per Share. Consolidated Financial Statement. Accounting For Taxes on Income. Accounting for Investment in associates in Consolidated Financial Statement. Discontinuing Operation. Interim Financial Reporting. Intangible assets. Financial Reporting on Interest in joint Ventures. Impairment Of assets. Provisions, Contingent, liabilities and Contingent assets. Financial instrument. Financial Instrument: presentation. Financial Instruments, Disclosures and Limited revision to accounting standards.

Disclosure of Accounting Policies: Accounting Policies refer to specific accounting principles and the method of applying those principles adopted by the enterprises in preparation and presentation of the financial statements. Valuation of Inventories: The objective of this standard is to formulate the method of computation of cost of inventories / stock, determine the value of closing stock / inventory at which the inventory is to be shown in balance sheet till it is not sold and recognized as revenue.

Cash Flow Statements: Cash flow statement is additional information to user of financial statement. This statement exhibits the flow of incoming and outgoing cash. This statement assesses the ability of the enterprise to generate cash and to utilize the cash. This statement is one of the tools for assessing the liquidity and solvency of the enterprise

Contigencies and Events occuring after the balance sheet date: In preparing financial statement of a particular enterprise, accounting is done by following accrual basis of accounting and prudent accounting policies to calculate the profit or loss for the year and to recognize assets and liabilities in balance sheet.

Objective of this standard is to prescribe the accounting of contigencies and the events, which take place after the balance sheet date but before approval of balance sheet by Board of Directors.