Accounting Standards

RTI, Jaipur

Session overview
Every profession develops a body of knowledge
consisting of principles, which are considered as
standard to be attained. Accounting is no exception.
In India, the Institute of Chartered Accountants of
India has developed Accounting Standards; based on
the generally accepted accounting standards to be
used in preparation of financial statements.

RTI, Jaipur

Session coverage
During this session, we will learn:
the importance of the accounting standards
in preparation of financial statements; and
application of AS 1 relating to Disclosure
of Accounting Policies, and
application of AS 4 relating to Events
Occurring After the Balance Sheet Date for
preparation of financial statements.

RTI, Jaipur

Learning Objective
At the end of the session, the learner will be
able to state the importance of Accounting
Standards in the preparation of financial
statements and application of AS 1 relating
to Disclosure of Accounting Policies and
AS 4 relating to Events Occurring After the
Balance Sheet Date in the preparation of
Financial Statements.
RTI, Jaipur

Importance of Accounting
Standards
The users of the financial statements need
an assurance that the entities preparing their
financial statements follow the accepted
standards while presenting their financial
information in the financial statements.

RTI, Jaipur

LIST OF ACCOUNTING
STANDARDS ISSUED SO FAR
Institute of Chartered Accountants of India
has so far issued 29 Accounting Standards
on the advise of the accounting Standards
Board

RTI, Jaipur

LIST OF ACCOUNTING
STANDARDS ISSUED SO FAR

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
RTI, Jaipur

LIST OF ACCOUNTING
STANDARDS ISSUED SO FAR

AS 7-Accounting for Construction Contracts

AS 8-Accounting for Research and Development
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

RTI, Jaipur

LIST OF ACCOUNTING
STANDARDS ISSUED SO FAR
AS 13-Accounting for Investments
AS 14-Accounting for Amalgamations
AS 15-Accounting for Retirement Benefits in the
financial Statements of Employers
AS 16-Borrowing Costs
AS 17-Segment Reporting
AS 18-Related Party Disclosures
AS 19-Leases
RTI, Jaipur

LIST OF ACCOUNTING
STANDARDS ISSUED SO FAR

AS 20-Earnings 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
RTI, Jaipur

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LIST OF ACCOUNTING
STANDARDS ISSUED SO FAR
AS 26-Intangible Assets
AS 27-Financial Reporting of Interests in
Joint Ventures
AS 28-Impairment of Assets
AS 29-Provisions, contingent Liabilities and
Contingent Assets

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Accounting Standard (AS 1)

Disclosure of Accounting
Policies

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AS 1 Disclosure of Accounting Policies

Fundamental Accounting Assumptions

Accounting Policies

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Fundamental Accounting
Assumptions
Going concern
Consistency
Accrual

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Areas in which differing accounting

Policies are encountered
Methods of depreciation, depletion and
amortization;
Treatment of expenditure during
construction;
Conversion or translation of foreign
currency items;
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Areas in which differing accounting

Policies are encountered
Valuation of inventories;
Treatment of goodwill;
Valuation of investments;

Treatment of retirement benefits;

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Areas in which differing accounting

Policies are encountered
Recognition of profit on long-term
contracts;
Valuation of fixed assets;
Treatment of contingent liabilities.

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Considerations in the selection

of Accounting Policies
Prudence
Substance over form
Materiality

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Accounting Standard-1
All significant accounting policies adopted in
preparation and presentation of financial
statements should be disclosed.
he disclosure of significant accounting
policies as such should form part of the
financial statement and the significant
accounting policies should normally be
disclosed in one place.
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Accounting Standard-1

If the fundamental accounting

assumptions,
viz.,
going
concern,
consistency and accrual are followed in
financial statements, specific disclosure is
not required.
If a fundamental
accounting assumption is not followed,
the fact should be disclosed.
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Accounting Standard (AS) 4 Contingencies and Events

Occurring After the Balance
Sheet Date

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Accounting Standard-4
This standard deals with treatment in
financial statements of:
Contingencies; and

Events occurring after the balance sheet

date.
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Accounting Standard-4
Does not apply to:
(a) Liabilities of life assurance and general
insurance enterprises arising from policies issued;
(b) Obligations under retirement benefit plans;
and
Commitments arising from long-term lease
contracts.

RTI, Jaipur

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Definitions
A contingency is a
condition or situation,
the ultimate outcome
of which, gain or loss,
will be known or
determined only on
the occurrence or nonoccurrence of one or
more uncertain future
events.

Events after the balance

sheet date are those
significant events, both
favourable and
unfavourable, that occur
between the balance sheet
date and the date on which
the financial statements
are approved by the Board
of Directors
represent material
changes and
commitments affecting
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the financial position of