Accounting standards (AS) , International Financial

Reporting Standards (IFRS),Indian Accounting Standards (Ind AS)

Submitted By- Aatur Porwal (01) Aayushee vyas (02) Abhishek Mishra(03) Aditi Randhar (04)

Accounting Standards (ASs) are written policy documents issued by expert accounting body or by Government or regulatory body.

Accounting Standards (ASs) are aspects of Recognition , Measurement , Treatment , Presentation & Discloser of accounting transaction in the financial statements.

In India , Accounting Standards (ASs) are issued by Accounting Standard Board (ASB) which is formed by Institute of Chartered Accountants of India (ICAI).

OBJECTIVES

1. To harmonise different accounting policies & practices use in a country.

2. To standarize accounting methods & procedures.

3. To reduce the accounting alternatives in the preparation of financial statements.

4. To lay down principles for preparation & presentation.

5. To establish benchmark for evaluating the quality of financial statements.

CONTD…

6. To ensure the users of financial statements get creditable financial information .

7. To facilitate inter-firm comparison.

Levels of AS Accounting standards are divided into three levels.

Level I Enterprises : Enterprises which fall in any one or more of the following categories , at any time during the accounting period , are classified as Level I Enterprises.

1). Listed enterprises whether in India or outside India.

2). Enterprises proposing to list their equity or debt securities.

3). Bank including co-operative banks.

4). Financial institutions.

5). Enterprises carrying on insurance business.

CONTD….

6). All commercial , industrial and business reporting enterprises , whose Turnover for the immediately preceding accounting period exceeds Rs. 50 crore.

7). All commercial , industrial and business reporting enterprises having Borrowings , including public deposits , in excess of Rs. 10 crore.

8). Holding and subsidiary of any one of the above.

Level II Enterprises :

1). All commercial , industrial & business reporting enterprises , whose Turnover for the immediately preceding accounting period exceeds Rs.40 lakhs but does not exceed Rs.50 crore .

2). All commercial , industrial & business reporting enterprises having Borrowings ,including public deposits , in excess of Rs. 1 crore but not excess of Rs. 10 crore .

3). Holding & subsidiary enterprises of any one of the above at any time during the accounting period.

Level III Enterprises :

Enterprises which are not covered under Level I and II are considered as Level III enterprises .

Recognition of Accounting StandardAccounting Standards(ASs) issued by the ICAI have legal recognition through Companies Act,2013.

1). Section 129(1) : The financial statements of every company shall comply with the accounting standards.

2). Section 129(5) : Where the P&L A/c & the balance sheet do not comply with the accounting standards, such companies shall disclose, the following: (a) The deviation from the AS (b) The reasons for such deviation. (c) The financial effect due to such deviation.

CONTD ….

3). Section 134(5) : The Board’s report shall also include a Director’s Responsibility Statement

indicating therein that in preparation of annual accounts, the applicable AS had been followed along

with proper explanation relating to material departure.

List Of AS -

The council of ICAI has issued 32 Accounting Standards . However , AS-8 has been withdrawn . Thus , effectively there are 31 Accounting Standards Some of them are namely :

AS 1- Disclosure of Accounting policies.

AS 2- Valuation of inventories.

AS 3- Cash flow Statements.

AS 4- Contingencies & Events Occurring after the B/S

IFRS is a set of international accounting standards stating how particular types of transactions & other events should be reported in financial statements.IFRS are principle-based standards, interpretations & the framework adopted by the International Accounting Standards Board(IASB).

IFRS comprise of: 9-IFRS-standards issued after 2001 by IASB.

29-International Accounting Standards (IAS)-standards issued before 2001 by IASC which are still valid.

16-Interpretations issued by International Financial Reporting Interpretations committee (IFRIC) after 2001.

11-interpretations issued by Standing Interpretations Committee (SIC) before 2001.

Advantages

Increased comparability of financial information .

The financial reporting process would become more transparent.

The standardization of accounting methodology provides creditors & investors with the ability to analyze businesses around the world using the same financial methods.

Permit international capital to flow more freely.

Provide better understanding to financial statements .

Assess the investment opportunities .

List of IFRS The following International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) issued by the IASB which are in force:

IAS-1 Presentation of Financial Statements

IAS-2 Inventories

IAS-7 Cash Flow Statements

IAS-8 Accounting Policies, Changes in Accounting Estimates & Errors.

IAS-10 Events After The Balance Sheet Date.

Cont… IFRS-1 First-time Adoption of International Financial Reporting Standards

IFRS-2 Share-based Payment

IFRS-3 Business Combinations

IFRS-4 Insurance Contracts

IFRS-5 Non-current Assets held for Sale & Discounted Operations

IFRS-6 Exploration for & Evaluation of Mineral Resources

IFRS-7 Financial Instrument: Disclosures

IND AS -

Ministry of Corporate Affairs (MCA) has notified Companies (Indian

Accounting Standards) Rules , 2015 prescribing the new Indian Accounting

Standards (Ind AS) applicable to companies /classes of companies in

contrast with applicability of Accounting standard specified in

Companies (Accounting Standards ) Rules , 2006

List of IND AS- IND AS-1 Presentation of Financial Statements.

IND AS-2 Inventories.

IND AS-7 Statement of Cash Flows.

IND AS-8 Accounting Policies , Changes in Accounting Estimates & Errors

IND AS-10 Events after the Reporting Period.

IND AS-11 Construction Contracts.

IND AS-12 Income Taxes.