ACCOUNTING STANDARDS

ACCOUNTING STANDARDS
• AS -1
• ALL SIGNIFICANT POLICIES ADOPTED IN
PREPARATION OF FINANCIAL STATEMENTS
SHOULD BE DISCLOSED.
• ANY CHANGE IN ACCOUNTING POLICIES
WHICH HAS MATERIAL EFFECT IN CURRENT
PERIOD OR IN LATER PERIOD SHOULD BE
DISCLOSED.
 AS 2
• DEALS WITH DETERMINATION OF VALUE AT WHICH
INVENTORIES ARE CARRIED/VALUED
• INVENTORIES TO BE VALUED AT LOWER OF COST OR NET
REALISABLE VALUE.
• AVERAGE COST OR FIFO METHODS ARE PERMITTED IN CASE
WHERE GOODS ARE INTERCHANGEABLE.
 AS-3

• PREPARATION OF CASH FLOW STATEMENT

AND ITS PRESENTATION ALONGWITH
FINANCIAL STATEMENTS
• CASH FLOW TO BE CLASSIFIED BY
OPERATING/INVESTING/FINANCING
ACTIVITIES.
 AS 4
• TREATMENT OF CONTINGENCIES AND EVENTS IN FINANCIAL
STATEMENTS.
• EG. CASES IN HIGH COURT OR PENALTY PROCEEDINGS UNDER
LAW.
• CONTINGENCIES MUST BE PROVIDED IF LOSSES CAN BE
ESTIMATED.
• EVENTS AFTER BALANCE SHEET DATE AND BEFORE APPROVAL
OF BOARD OF DIRECTORS SHOULD BE APPROPRIATELY
ADJUSTED IN VALUE OF ASSETS AND LIABILITIES.
• IF INSUFFECIENT EVIDENCE, DISCLOSURE TO BE MADE
• CONTINGENT GAINS ARE NOT RECOGNIZED.
 AS-5
• DEALS WITH TREATEMENT OF PRIOR PERIOD AND
EXTRAORDINARY EVENTS.
• DEBITS OR CREDITS WHICH ARISE IN CURRENT YEAR OR AS A
RESULT OF OMMISSION/MISTAKES IN PRIOR YEAR.
• ALSO EXTRAORDINARY ITEMS LIKE WRITING OFF INVENTORIES.
• DISPOSAL OF FIXED ASSETS.
 AS -6
• DEPRECIATION IS A MEASURE OF WEARING OUT ASSETS.
• DEPRECIATION METHOD SHOULD CAREFULLY BE SELECTED
AND CONSISTENCY APPLIED FOR YEAR TO YEAR.
• TREATMENT FOR REVALUATION OF ASSETS
• DEPRECIATION METHOD TO BE DISCLOSED.
 AS-7
• ACCOUNTING OF CONSTRUCTION CONTRACTS
.CONTRACT FOR CONSTRUCTION EXCEED ONE YEAR
OR SO.
• ACCOUNTING ISSUES OF REVENUE, TREATMENT OF
ADVANCE RECEIVED, WORK IN PROGRESS, IN
FINANCIAL STATEMENTS.
• TYPES OF CONTRACTS: FIXED PRICE CONTRACT +
ESCALATION COST OR COST PLUS A FIXED FEE.
• AMOUNT AND METHOD USED TO DETERMINE
REVENUE RECOGNIZED.
 AS-8
• STAND DELETED FROM 1.4.03 R&D EXPENSES
ARE NOW COVERED IN AS-10
 AS-9
• BASIS FOR RECOGNITION OF REVENUE I.E INCOME AND TIME
WHEN INCOME IS SAID TO HAVE ARISEN
• WHEN REVENUE RECOGNITION POSTPONED , DISCLOSURE OF
CIRCUMASTANCES TO BE MADE.
 AS-10
• ACOUNTING OF FIXED ASSETS AND DISCLOSURE THERE OF.
• COMPONENTS OF COST.
• PURCHASE PRICE: + IMPORT DUTY+TAXES+DIRECT COST TO BRING
ASSET TO ITS WORKING CONDITION-TRADE DISCOUNTS.
• FINANCING COST TO THE EXTENT SUCH COST RELATE TO PERIOD AFTER
SUCH ASSETS ARE READY TO USE-NOT TO BE CAPITALIZED.
• TEST RUN EXPENSES CAPITALIZED.
 AS-11
• TRANSLATION OF ACOUNTING TRANSACTION IN
FOREIGN CURRENCIES IN REPORTING CURRENCY.
• FINANCIAL STATEMENT OF FOREIGN OPERATIONS
• FORWARD EXCHANGE CONTRACTS.
• EXCHANGE DIFFERENCE INCLUDED I.E PROFIT OR
LOSS TO BE DISCLOSED.
 AS-12
• GOVERNMENT GRANTS RECEIVED BY AN ENTITY.
• SUBSIDIES/CASH INCENTIVE/DUTY DRAWBACK
• DOES NOT INCLUDE ANY TAX EXEMPTION OR TAX HOLIDAY.
 AS-13
• ACCOUNTING FOR INVESEMENTS MADE BY AN ENTITY.
• CURRENT AND LONG TERM.
 AS-14
• AMALGAMATION OF TREATMENT OF RESULTANT GOODWILL
OR RESERVES
• TAKE OVER OF EXISTING BUSINESS AND FORMATION OF NEW
BUSINESS.
 AS-15
• ACCOUNTING OF RETIREMENT BENEFIT TO EMPLOYEES IN
FINANCIAL STATEMENTS
• PF/PENSION/GRATUIITY LEAVE ENCASHMENT POST
RETIREMENT WELFARE SCHEME
• METHOD BY WHICH RETIREMENT BENEFITS VALUED.
 AS-16
• CAPITALIZATION OF BORROWING COST ATTTRIBUTABLE TO
ACQUISITION/CONSTRUCTION OR PRODUCTION WHERE
QUALIFYING ASSET TAKES SUBSTANTIAL PERIOD TO GET IT
READY FOR INTENDED USE OR SALE.
 AS-17
• SEGMENT REPORTING
• REPORTING OF INFORMATION ABOUT DIFFERENT TYPES OF
PRODUCT AND SERVICES OF AN ENTERPRISE AND ITS
OPERATIONS IN DIFFERENT GEOGRAPHICAL AREAS.
• FOR ASSESSING RISK AND RETURN OF DIVERSIFIED OR
MULTILOCATIONAL ENTERPRISE.
 AS-18
• REPORTING OF RELATED PARTY RELATIONSHIP AND
TRANSACTIONS BETWEEN A REPORTING ENTERPRISE AND
RELATED PARTY.
• NAME OF RELATED PARTY AND RELATIONSHIP WHERE
CONTROL EXIST TO BE DISCLOSED.
 AS-19
• LEASE: A LEASE AN AGREEMENT WHEREBY THE LESSOR
CONVEYS TO THE LESEE IN RETURN FOR A PAYMENT OR SERIES
OF PAYMENTS THE RIGHT TO USE AN ASSET FOR A AGREED
PERIOD.
• ACCOUNTING POLICIES FOR LESSOR AND LESSEE AND
DISCLOSURE IN RELATION TO FINANCIAL LEASE AND
OPERATING LEASE.
 AS-20
• PRINCIPLES & DETERMINATION OF EARNING PER SHARE
• COMPARISON BETWEEN ENTERPRISES.
• NET PROFI(LOSS)/ WEIGHTED AVERAGE NUMBER OF SHARES.
 AS 21
• CONSOLIDATED FINANCIAL STATEMENT OF PARENT AND
SUBSIDARIES.
 AS-22
• METHOD OF DETERMINATION OF AMOUNT OF EXPENSES OR
SAVING RELATING TO TAXES ON INCOME IN RESPECT OF AN
ACCOUNTING PERIOD.
• DEFERRED TAX ASSETS AND LIABILITIES SHOULD BE
DISTINGUISHED FROM CURRENT TAX ASSETS AND LIABILITIES
 AS-23
• ACCOUNTING FOR INVESTMENT IN ASSOCIATES.
 AS-24
• DISCONTINUATION OF OPERATION OF PARTICULAR SEGMENT.
• DISCLOSURE OF PRE TAX PROFIT OR LOSS FROM ACTIVITIES
ATTRIBUTABLE TO DISCONTINUING OPERATIONS.
 AS-25
• INTERIM REPORTING WHICH IS NOT FOR COMPLETE
REPORTING PERIOD.
• CONDENSED B/S
• CONDENSED P&L
• CONDENSED CASH FLOW STATEMENT
• EXPLANATORY NOTES.
 AS-26
• OTHER THAN INTANGIBLE ASSETS COVERED IN AS-22( DEFERRED TAX
ASSETS)
• RELATE TO START UP COST ( EG ADVT ETC)
• R&D
• PATENTS AND COPY RIGHT
• GOODWILL
• DISCLOSURE: USEFUL LIFE OR AMORATIZATION RATE
• AMORATIZATION METHOD.
 AS-27
• TWO OR MORE PARTIES UNDER TAKE ECONOMIC ACTIVITY
WITH JOINT CONTROL
• ACCOUNTING FOR JOINT VENTURE IN A CONSOLIDATED
FINANCIAL STATEMENT.
• DISCLOSURE: ANY CONTINGENT LIABILITY INCURRED BY
VENTURER AND ITS SHARE.
• ANY CAPITAL COMMITMENT AND ITS SHARE.
 AS-28
• EQUITY OR DEBT LISTED
• TURNOVER EXCEED RS.50 CRORES
• PRINCIPLE OF THIS A.S IS TO ENSURE CARRYING COST OF
ASSET IS NOT MORE THAN RECOVERABLE VALUE OF ASSET.
• NOT APPLIED TO INVENTORIES AS 2
• CONSTRUCTION CONTRACT AS 7
• FINANCIAL ASSETS AS 13 & DEF TAX AS 22
 AS-29
• AS-29 DEALS
• ACCOUNTING FOR PROVISIONS,CONTINGENT LIABILITIES AND
CONTINGENT ASSETS WITH EXECEPTIONS AS TO EXECUTORY
CONTRACTS,
THOSE ARISING IN INSURANCE FROM CONTRACT WITH POLICY
HOLDERS AND THOSE COVERED UNDER ANOTHER
ACCOUNTING STANDARD.
• THANK YOU.