Accounting Standard -1Disclosure Of Acounting Policy

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AS-1-Disclosure Of Acounting Policy

          Accounting policies are the specific accounting principles and the methods of applying those principles adopted by an enterprise in the preparation and presentation of financial statements.

1. All significant accounting policies should be disclosed.
2. Such disclosure form part of financial statements.
3. All disclosures should be made at one place.
4. Specific disclosure for the adoption of fundamental accounting assumptions is not required.
5.  Disclosure of accounting policies cannot remedy a wrong or inappropriate treatment of the item in the accounts.

        Any change in accounting policies which has a material effect in the current period or which is reasonably expected to have material effect in later periods should be disclosed.

      In the case of a change in accounting policies, which has a material effect in the current period, the amount by which any item in the financial statements is affected by such change should also be disclosed to the extent ascertainable. Where such amount is not ascertainable, the fact should be indicated.

Fundamental Accounting Assumption: (GCA) :

1. Going Concern
2. Consistency
3. Accrual

Major considerations governing the selection of accounting policies:

• Prudence
• Substance over form (Logic over Law)
• Materiality

The following are examples of the areas in which different accounting policies may be adopted by different enterprises:

-                                  Methods of depreciation

-                                  Methods of translation of foreign currency

-                                  Valuation of inventories

-                                  Valuation of investments

-                                  Treatment of retirement benefits

-                                  Treatment of contingent liabilities etc.

Accounting Standards(AS) - An Introduction

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         Today iam going to share the Accounting Standards, that are the guidelines to the any business to prepare and maintain accounts of their respective companies. For comfortable usage we can say Accounting Standards as (AS) from next post.

      Accounting Standards are the defined accounting policies issued by Government or expert institute. These standards are issued to bring harmonization in follow up of accounting policies.

Presently, Institute of Chartered Accountants of India has issued 29 Accounting Standards as listed below.

 

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 (Not Applicable now)

AS 9.        Revenue Recognition

AS 10.      Accounting for Fixed Assets

AS 11.      Accounting for the Effects of Changes in Foreign Exchange Rates

AS 12.      Accounting for Government Grants

AS 13.      Accounting for Investments

AS 14.      Accounting for Amalgamation

AS 15.      Accounting for Retirement Benefits in the financial Statements of Employers

AS 16.      Borrowing Costs

AS 17.      Segment Reporting

AS 18.      Related Party Disclosure

AS 19.      Leases

AS 20.      Earning Per Share

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

AS 28.      Impairment of Assets

AS 29.      Provisions, Contingent Liabilities & Contingent Assets

Procedure for Issuing Accounting Standards

        Accounting Standard Board (ASB) determines the broad areas in which Accounting Standards need to be formulated.

In the preparation of AS, ASB is assisted by Study Groups.

      ASB also holds discussions with representative of Government, Public Sector Undertakings, Industry and other organizations (ICSI/ICWAI) for ascertaining their views.

        An exposure draft of the proposed standard is prepared and issued for comments by members of ICAI and the public at large.

      After taking into consideration the comments received, the draft of the proposed standard will be finalized by ASB and submitted to the council of the Institute.

       The council of the Institute will consider the final draft of the proposed Standard and If found necessary, modify the same in consultation with ASB. The AS on the relevant subject will then be issued under the authority of the council.
NOTE: Hi Guys, Iam going to explain all the above Accounting Standards one by one in forthcomming posts, Thank You