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WRITTEN and/POLICY DOCUMENTS ISSUED BY THE GOVERNMENT, PROFESSIONAL BODIES or OTHER REGULATORY BODIES COVERING VARIOUS

WRITTEN and/POLICY DOCUMENTS ISSUED BY THE GOVERNMENT, PROFESSIONAL BODIES or OTHER REGULATORY BODIES COVERING VARIOUS ASPECTS OF

RECOGNITION MEASUREMENT TREATMENT PRESENTATION and DISCLOSURE OF ACCOUNTING TRANSACTIONS IN THE FIN. STATEMENT

HELPS IN PREPARING UNIFORM & GENERAL PURPOSE FIN. STATEMENTS EASY TO COMPARE DIFF. UNITS IN DIFF. COUNTRIES

A.S. FORMLATED IN CONFORMITY WITH THE STATUTE, CUSTOMS, USAGES AND BUSINESS ENVIRONMENT OF A COUNTRY

A.S. FORMLATED IN CONFORMITY WITH THE STATUTE, CUSTOMS, USAGES AND BUSINESS ENVIRONMENT OF A COUNTRY – IF LAW IS AMENDED, and THE A.S. IS NOT IN CONFORMITY , THE LAW WILL PREVAIL FIN. STATEMENTS w.r.t. LAW ICAI SHALL DETERMINE THE DISCLOSURE REQUIREMENT MADE IN FIN. ST. & AUDITOR’S REPORT SUCH DISCLOSURE APPROPRIATE NOTES EXPLAINING THE TREATEMENT OF THE ITEM SUCH EXPLANATORY NOTES CLARIFICATION and NOT ADVERSE COMMENTS

A.S. WILL APPLY ONLY TO MATERIAL ITEMS LIMITATION AS TO APPLICABILITY OF A.S. DECIDED BY ICAI.

CONVENTIONS, RULES and PROCEDURES NECESSARY TO DEFINE ACCEPTED ACCOUNTING PRACTICES AT A PARTICULAR TIME. BROAD

CONVENTIONS, RULES and PROCEDURES NECESSARY TO DEFINE ACCEPTED ACCOUNTING PRACTICES AT A PARTICULAR TIME. BROAD GUIDELINES OF GENERAL APPLICATIONS, DETAILED PRACTICES & PROCEDURES PROVIDE A STANDARD TO MEASURE FINANCIAL PRESENTATIONS COMMON SET OF ACCOUNTING PRINCIPLES, STANDARDS & PROCEDURES USED IN PREPARING FINANCIAL STATEMENTS AUTHORITATIVE STDS+COMMONLY ACCEPTED WAY OF RECORDING & REPORTINGACCOUNTING INFORMATION

HELPS IN PREPARING UNIFORM & GENERAL PURPOSE FIN. STATEMENTS EASY TO COMPARE DIFF. UNITS IN DIFF. COUNTRIES

9/14/2012

ACCOUNTING STANDARD BOARD (ASB) of ICAI DETERMINE THE BROAD AREAS – IN WHICH “A.S.” NEED

ACCOUNTING STANDARD BOARD (ASB) of ICAI DETERMINE THE BROAD AREAS – IN WHICH “A.S.” NEED TO BE FORMULATED & THE PRIORITY IN REGARD TO THE SELECTION THEREOF (ASB) SHALL BE ASSISTED BY STUDY GROUPS DRAFT STANDARD INCLUDE OBJECTIVE OF THE STANDARD SCOPE OF THE STANDARD DEFINITIONS OF THE TERMS RECOGNITION & MEASUREMENT PRESENTATION & DISCLOSURE REQ.

(ASB) CIRCULATE THE DRAFT A.S. TO THE COUNCIL MEMBERS OF ICAI, MCA, C&AG, CBDT, ICWAI, ICSI, ASSOCHAM, CII, FICCI, RBI, SEBI, SCOPE, IBA etc.

FOR COMMENTS COUNCIL FINALISE THE

A.S.

I.A.S.B. FORMLATES I.A.S. ON MATTERS RELATING TO ACCOUNTING POLICIES PREPARATION and DISCLOSURE OF FIN.

I.A.S.B. FORMLATES I.A.S. ON MATTERS RELATING

TO

ACCOUNTING POLICIES PREPARATION and DISCLOSURE OF FIN. STATEMENTS

MAIN OBJECTIVES UNIFORMITY &

ENHANCE

INTER-FIRM COMPARABILITY wrt RECOGNITION OF TRANSACTION IN FIN. STATEMENT MEASUREMENT OF THESE TRANSACTION & EVENTS ITS PRESENTATION IN FIN. STATEMENTS

MEANINGFUL AND UNDERSTANDABLE TO USERS

IASB 41 IAS and 8 IRFS DIFFERENCES AMONG COUNTRIES IN FIN. ACCOUNTING and REPORTING PRACTICES – IMPEDIMENT TO FREE FLOW OF CAPITAL – ICAI CONVERGENCE OF IAS- IFRS

DISCLOSURE OF ACCOUNTING POLICIES - AS-1

DEALS WITH

SIGNIFICANT A/Cg. POLICIES IN PREPARING & PRESENTATION OF FIN. STATEMENTS.

PURPOSE

PROMOTE BETTER UNDERSTANDING and COMPARISON OF FIN. STATEMENTS

CHANGE IF ANY

HAVING MATERIAL EFFECT AT PRESENT or IN FUTURE THE AFFECTED AMOUNT TO THE EXTENT ASCERTAINABLE. IF NOT, THE FACT TO BE INDICATED.

FUNDAMENTAL

DISCLOSURE NOT REQUIRED IF FOLLOWED. IF NOT, THEN DISCLOSURE IS REQUIRED

A/Cg.

ASSUMPTIONS

PRIME CONSI-

FIN. STATEMENTS SHOULD GIVE A TRUE AND FAIR VIEW OF INCOME & FINANCIAL POSITION

DERATION

VALUATION OF INVENTORIES - AS-2

VALUED AT

COST or NET REALIZABLE VALUE

LOWER OF

COST MEANS

COST OF PURCHASE, COST OF CONVERSION, COST TO BRING THE INVENTORIES TO THE PRESENT CONDITION & LOCATION

COST

ABNORMAL WASTE, STORAGE COST, ADMINISTRATIVE OVERHEADS, SELLING & DISTRIBUTION COST

EXCLUDED

COST

SPECIFIC IDENTIFICATION COST FIFO WEIGHTED AVERAGE COST

FORMULA

NET

FOR INVENTORIES DAMAGED or OBSOLETE ( WHOLLY/PARTLY ) or IF SELLING PRICE DECLINED BELOW COST

REALISABLE

VALUE

CONTINGENCIES and EVENTS OCCURING AFTER THE DATE OF BALANCE SHEET - AS-4

EVENTS:

UPTO THE DATE OF FIN. STATEMENTS

a) FURTHER EVIDENCE AS TO THE CONDITIONS

b) INDICATIVE

OF THE

CONDITIONS

ADJUSTMENT OF ASSETS & LIABILITIES

ONLY DISCLOSURE

DEPRECIATION ACCOUNTING - AS 6

DEPRECIATION

ALLOCATED ON A SYSTEMATIC BASIS TO EACH ACCOUNTING PERIOD DURING USEFUL LIFE OF THE ASSET

AMOUNT

METHOD OF

APPLIED CONSISTENTLY FROM PERIOD TO PERIOD.

DEPRECIATION

CHANGE IN

ONLY IF STATUTE/AS/APP. FIN. ST. DEPN RECALCULATED FROM THE DATE OF ACQ. OF SUCH ASSET ADJ. IN CHANGED YEAR. CHANGE IN A/Cg. POLICY ITS’ EFFECT QUANTIFIED & DISCLOSED

METHOD

DISCLOSURE :

NET SURPLUS or DEFICIENCY HISTORICAL or OTHER COST TOTAL DEPRECIATION FOR THE PERIOD ACCUMULATED DEPN

ON DISPOSAL

FIN. STATEMENTS

METHODS USED, DEPN. RATE, USEFUL LIFE

9/14/2012

CASH FLOW STATEMENT - AS-3

APPLICABLE TO

LISTED COMPANIES and OTHER INDUSTRIAL COMMERCIAL and BUSINESS ENTERPRISE

DEALS WITH

CHANGES IN NET ASSETS, FINANCIAL STRUCTURE and ITS ABILITY TO AFFECT THE AMOUNTS AND TIMING OF CASH FLOWS SO AS TO ADOPT FOR CHANGES IN CIRCUMSTANCES & OPPORTUNITIES

ACTIVITES

CASH FLOW IN RESPECT OF OPERATING, INVESTING and FINANCIALACTIVITIES.

COVERED

METHOD OF

DIRECT METHOD

PREPARATION

INDIRECT METHOD

FOREIGN

EXCHANGE RATE TO BE APPLIED AS ON THE DATE OF CASH FLOW

CURRENCY

CASH FLOW

 

NET PROFIT/LOSS, PRIOR PERIOD ITMES & CHANGES IN ACCOUNTING POLICIES - AS -5

FACILITATES

INTER-PERIOD and INTER-FIRM COMPARISONS

NET

SHOULD INCLUDE ALL EXPENSE/INCOME RECOGNISED; IMPACT OF EXTRA-ORDINARY ITEMS & EFFECTS ON CHANGES IN A/Cg. ESTIMATES

PROFIT/LOSS

FOR THE

PERIOD

INCOME and

SIZE, NATURE or THE INCIDENCE OF THEIR DISCLOSURE, IF MATERIAL

EXPENSE

CHANGES IN

FOR THE STATUTE, COMPLIANCE OF ‘AS’ or APPROPRIATE PRESENTATION

A/Cg. POLICIES

PRIOR PERIOD

NATURE, AMOUNT and THEIR IMPACT ON CURRENT PROFIT/LOSS SHOULD BE DISCLOSED

ITEMS

CONSTRUCTION CONTRACTS - AS - 7

CONTRACT

PRICE AGREED, REVENUE AS PER ESCALATION CLAUSE, CLAIMS, REVENUE DUE TO INCREASE IN UNITS, INCENTIVE PAYMENTS

REVENUE

CONTRACT

ALL DIRECT COST, ATTRIBUTABLE/ALLOCATED and SPECIFIC COST AS PER CONTRACT (MINUS INCIDENTAL INCOME)

COST

RECOGNITION OF

EXPECTED LOSS IMMEDIATELY RECOGNISED

REVENUE/EXPENSE

DISCLOSURE

AMOUNT OF CONTRACT REVENUE RECOGNISED, METHODS USED TO DETERMINE THE REVENUE & STAGES OF COMPLETION OF CONTRACT

REVENUE RECOGNITION - AS -9

SALE OF

COLLECTION IS REASONABLY ASSURED, PROPERTY IN GOODS TRANSFERRED, NO UNCERTAINITY ABOUT CONSIDERATION

GOODS/SERVICES

SERVICE

EITHER COMPLETED/PROPORTIONATE SERVICE CONTRACT METHOD MAY BE ADOPTED FOR REVENUE RECOGNITION

RENDERED

INTEREST

TIME BASIS

ROYALTIES

APPROVAL BASIS AS PER THE AGREEMENT

DIVIDEND

ONCE THE RIGHT TO RECEIVE DIVIDEND IS ESTABLISHED

IF POSTPONED

DISCLOSE THE CIRCUMSTANCES PENDING THE RESOLUTION OF SIGNNIFICANT UNCERTAINITIES

ACCOUNTING FOR FIXED ASSETS - AS 10

HIRE PURCHASE

@ NET CASH VALUE WITH THE FACT OF HIRE PURCHASE

ASSETS BOUGHT

CONSIDERATION APPORTIONED TO ASSETS ON FAIR BASIS AS DETERMINED BY VALUERS

@CONSOLIDATED

PRICE

GOODWILL

RECORDED ONLY WHEN SOME CONSIDERATION IN MONEY HAS BEEN PAID

DISCLOSURE :

GROSS, NET AT BEGINNING & AT THE END OF A/C YEAR SHOWING ADDITION, DISPOSAL, ACQUISITION

BOOK VALUE

EXPENDITURE

IN THE COURSE OF CONSTRUCTION or ACQUISITION

INFORMATION ON

HISTORICAL COST REVALUED COST METHODS ADOPTED, INDICES USED, YEAR OF APPRAISAL, EXTL. VALUER etc

REVALUATION

CHANGES IN FOREIGN EXCHANGE RATES - AS 11

FIN. STATEMENTS OF NIFO:

ASSETS & LIAB. INCOME & EXP. RESULTING EX. DIFF.

@CLOSING RATE @ RATES ON DT. OF TRANSACTION ACCUMULATED IN F.C. TRANSLATION RESERVE TILL DISPOSAL OF INV.

DISCLOSURE:

EX. DIFF. INCLUDED IN NET PROFIT FOR THE PERIOD (EXCEPT ON FIN. INSTRUMENTS @FAIR VALUE – AS 30)

EX. DIFF. ACCUMULATED IN F.C. TRANSLATION RESERVE & RECONCILIATION

9/14/2012

ACCOUNTING FOR FIXED ASSETS - AS 10

FIXED ASSETS

GOODWILL, PATENTS TRADE MARKS, DESIGNS etc.

COST

COST OF BRINGING THE ASSET TO ITS WORKING CONDITION

SELF-GENERATED

ONLY DIRECT COST INCLUDED

ASSET

ELIMINATED

ON DISPOSAL or WHEN NO FURTHER BENEFIT IS EXPECTED FROM ITS USE

PROFIT/ LOSS ON SALE OF ASSET

TO BE RECOGNISED IN P&L A/C ON RETIREMENT or ON DISPOSAL , WHICH IS CARRIED AT COST

REVALUATION

ENTIRE CLASS OF ASSETS:

SELECTION SYSTEMATIC NO CREDIT OF ACC. DEPN TO P&L NET INCREASE IN B.V. REVAL. RES.

CHANGES IN FOREIGN EXCHANGE RATES - AS 11

NOT APPLICABLE

FOR DERIVATIVES and BALANCES WITHIN THE SCOPE OF AS-30 & FIN. STATEMENTS OF FOREIGN OPERATIONS

FC

ON INITIAL RECOGNITION IN Rs. @ EXCHANGE RATE ON THE DATE OF TRANSACTION

TRANSACTIONS

FC MONETARY ITEMS NON-MONETARY – H NON-MONETRAY --F

@ CLOSING RATE

@ EX. RATE ON TRANSACTION DATE

@ EX. RATE ON VALUATION DATE

EX. DIFF. ON SETTLEMENT OF ‘M’

RECOGNISED AS INCOME/EXP. IN THE PERIOD IN WHICH THEY ARISE

EX. DIFF. ON ‘M’ -NET INV. IN NON-INTEG. FOREIGN OPERN.

ACCUMULATED IN A FOREIGN CUR. TRANSLATION RESERVE TILL DISPOSAL OF THE NET INVESTMENT

ACCOUNTING FOR GOVT. GRANTS -- AS 12

CAPITAL APPROACH

GRANT PART OF SHAREHOLDERS’ FUND GRANT INCOME OVER ONE OR MORE PERIODS

INCOME APPROACH

GRANT FOR

SHOWN IN BALANCE SHEET

A) SPECIFIC ASSET

AS DEDUCTION FROM THE COST

B) TOTAL COST

SHOWN IN THE BALANCE S HEET AT NOMINAL VALUE

C) NON-DEPRECIABLE ASSET

CR. TO CAPITAL RESERVE

ALTERNATIVELY GRANT MAY BE TREATED AS

DEFERRED INNCOME & ALLOCATED IN P&L A/C OVER THE USEFUL LIFE OF THE ASSETS