PRESTIGE INSTITUTE OF MANAGEMENT DEWAS

GUIDED BY: PRESENTED BY:

KAVITA VIJAY MA’AM PRIYAL JAIN

TOPIC: ACCOUNTING
STANDARDS
 MEANING
THE ACCOUNTING STANDARDS ARE A SET OF GUIDELINES, I.E., GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES, ISSUED BY THE ACCOUNTING BODY
OF THE COUNTRY SUCH AS THE INSTITUTE OF CHARTERED ACCOUNTANTS
OF INDIA, THAT ARE FOLLOWED FOR PREPARATION OF FINANCIAL
STATEMENTS.

DEFINITION
Kohler has defined Accounting Standards as “ a code of
conduct imposed on an accountant by custom, law and a
professional body.
 OBJECTIVES
Enhancing reliability of financial statements

Facilitating meaningful comparison of Financial Statements of two

or more entities.

To disclose accounting policies in case of change in accounting

process or principles.

NATURE
Accounting Standards are mandatory in nature

Accounting standards are prepared keeping in view

the business environment and laws of the country. It
may be noted that whenever a conflict arises between
Law and Accounting Standards, law will prevail.
 Advantages/Merits
1. It controls the controversy of accounting standards.
2. Accounting standards create a sense of confidence among the users of accounting
information.
3. Attains Uniformity in Accounting.
4. Helps and assists Auditors in auditing the accounts as they have to follow uniform
practices and policies.
5. It removes the effect of diverse accounting practices.
6. It ensures the consistency, uniformity, relevancy and comparability of Financial
Statements.

Demerits/Disadvantages

1. Restricted scope.
2. Difficulty between Choosing Alternatives.
 INTRODUCTION
Accounting Standards (i.e. AS 1~32) have been issued/ amended by the Accounting Standards
Board of ICAI from time to time, to establish uniform standards for preparation of financial
statements, in accordance with generally accepted accounting practices (GAAP) in India and for
better understanding of the users.

These standards are mandatory on the dates specified either in the respective document or by
notification issued by the Council of the ICAI.

These Accounting Standards are nearly 2 decades old and are being reviewed, modified and
upgraded to match the financial reporting requirements of Ind AS, as far as possible in the case of
SMEs.

ICAI has published a compendium of accounting standards as on 1 July 2019, which includes
various relevant Announcements of ICAI on the subject.

List of Mandatory Accounting Standards of ICAI (as on 1 July 2017 and onwards), is as under:
NAMES

OF

32
ACCOUNTING

STANDARDS
Disclosure of accounting policies Revenue Recognition

Accounting for Fixed Assets

Valuation of inventories

The effects of changes in

Cash flow statement
foreign exchange rates

Contingencies and Events Accounting for Government

occurring after balance sheet Grants

Net profit or loss for the period, Accounting for Investments

prior period items and changes
in Accounting Policies
Accounting for Amalgamations
Depreciation Accounting
Employees Benefits( Revised 2005)
Construction Contracts
Borrowing Costs
Accounting for Research
and Development Segment Reporting
Related party Disclosures Financial Reporting of
Interests in Joint Ventures
Leases
Impairment Of Assets
Earnings per Share
Provisions, Contingent Liabilities
Consolidated Financial
and Contingent Assets
Statements

Accounting For Taxes On

Financial Instruments:
Income
Recognition and Measurement
Accounting for Investments
In Associates Financial Instruments:
Presentation
Discontinuing Operations

Interim Financial Financial Instruments:

Reporting Disclosures

Intangible Assets
LET’s DISCUSS FEW IMPORTANT
AMONG THEM IN DETAIL
AS 1: DISCLOSURE OF ACCOUNTING
STANDARDS
This Standard deals with the disclosure of significant
accounting policies which are followed in preparing and
presenting financial statements.

. AS 2 : VALUATION OF
INVENTORIES
This Standard deals with the determination of value
at which inventories are carried in the financial
statements, including the ascertainment of cost of
inventories and any write-down thereof to net
realizable value.
AS 3 CASH FLOW STATEMENT
This Standard deals with the provision of information about the
historical changes in cash and cash equivalents of an enterprise by
means of a Cash Flow Statement which classifies cash flows during
the period from operating, investing and financing activities.

AS 4 CONTINGENCIES AND EVENTS OCCURING

AFTER BALANCE SHEET DATE :

This Standard deals with the treatment of contingencies and

events occurring after the balance sheet date.
. AS 9 REVENUE RECOGNITION
This Standard deals with the bases for recognition of revenue in the Statement
of Profit and Loss of an enterprise. The Standard is concerned with the
recognition of revenue arising in the course of the ordinary activities of the
enterprise from: a) Sale of goods; b) Rendering of services; and c) Interest,
royalties and dividends.
AS 10: PROPERTY,PLANT AND
EQUIPMENT

The objective of this Standard is to prescribe the

accounting treatment for property, plant and equipment
(PPE).

AS 11: THE EFFECTS OF CHANGE IN FOREIGN

EXCHANGE RATE

AS 11 lays down principles of accounting for foreign currency transactions

and foreign operations, i.e., which exchange rate to use and how to
recognize in the financial statements the financial effect of changes in
exchange rates.
AS 12 GOVERNMENT GRANTS
This Standard deals with accounting for government grants.
Government grants are sometimes called by other names
such as subsidies, cash incentives, duty drawbacks, etc.

AS 13 ACCOUNTING FOR INVESTMENTS

This Standard deals with accounting for investments in the
financial statements of enterprises and related disclosure
requirements.
AS 14: ACCOUNTING FOR
AMALGAMATIONS
This Standard deals with accounting for amalgamations
and the treatment of any resultant goodwill or reserves.

AS 15 Employee Benefits
The objective of this Standard is to prescribe the accounting
treatment and disclosure for employee benefits in the books of
employer except employee share-based payments. It does not
deal with accounting and reporting by employee benefit plans.
 AS 16 : BORROWING COSTS
This Standard should be applied in accounting for
borrowing costs. This Standard does not deal with the
actual or imputed cost of owners’ equity, including
preference share capital not classified as a liability.

AS 17: SEGMENT REPORTING:

The objective of this Standard is to establish principles
for reporting financial information, about the different
types of segments/ products and services an enterprise
produces and the different geographical areas in which
it operates
AS 25: INTERIM FINANCIAL REPORTING

This Standard applies if an entity is required or elects to publish an

interim financial report. The objective of AS 25 is to prescribe the
minimum content of an interim financial report and to prescribe the
principles for recognition and measurement in complete or condensed
financial statements for an interim period.

AS 26 : INTANGIBLE ASSETS
AS 26 prescribes the accounting treatment for intangible
assets (i.e. identifiable non-monetary asset, without
physical substance, held for use in the production or
supply of goods or services, for rental to others, or for
administrative purposes).
THANK YOU