accounts gr 1
TRANSCRIPT
Topics to be presentedAccounting: Concept Branches ImportanceUsers and Uses of Accounting InformationAccounting ConceptsAccounting ConventionsAccounting Standards Meaning Objectives ProcessNeed for Global Standards in IndiaIFRS
Accounting may be defined as the process of recording,
classifying, summarizing, analysing and interpreting the
financial transactions and communicating the results.
There of to the persons interested in such information.
AICPA defines Accounting as “The process of identifying,
measuring and communicating economic information to
permit; informed judgement and decisions by the uses
of accounts”.
Financial Accounting It is concerned with
record keeping directed towards the reparation of Trial balance, profit and loss account and balance sheet.
Cost Accounting Cost Accounting is the
process of accounting for costs. It shows classification and analysis of cost on the basis of functions process, products etc.
Management Accounting It deals with the processing of data sentenced in financial accounting and cost accounting for managerial decision making.
Tax Accounting This branch of accounting is becoming important because of complex tax laws governing income-tax, Excise duty, value added tax etc.
IMPORTANCE OF ACCOUNTING
systematic recording
It records income and expenses in such a manner that
net result of any period can be determined
tax assessment easy
It records assets and liability in such a way that
financial position of the entity can be judged.
monitor and evaluate organizations performance
reliable and timely information for decision making.
a basis for estimation and projection
enables preparation of budgets.
CLASSIFICATION OF ACCOUNTING PRINCIPLES
CONCEPTS
Separate Entity
Accounting Period
Money Measurement
Going Concern
Cost Concept
Matching Concept
Accrual Basis of Accounting
Dual Aspect
Accounting is considered as the language of business.
Similarly accounting has certain rules to be observed
by the accountants so that it is understood by all in
the same sense.
Thus accounting standards are certain set of rules
and guidance based on the principles and methods of
accounting to be followed to have uniformity in
terminology approach and presentation of results
Accounting Standards in India are issued By the
Institute of Chartered Accountants of India (ICAI).
At present there are 31 Accounting Standards
issued by ICAI.
In India, issued by ICAI on 21st April,1977
Initiated by Kumar Mangalam Birla, chairman
committee of Corporate Governance for Financial
Disclosures
OBJECTIVES AND FUNCTIONS OF AS
Standardize the diverse accounting policies
Add the reliability to the financial statement
Eradicate puzzling variation in treatment of accounting
aspects
Facilitate inter-firm and intra-firm comparison
To provide interpretations and guidance on AS, time to
time
Identification of Broad Areas
Constitution of Study Group
Revision of Preliminary
Draft
Circulation of Revised Draft
Meeting with specified
outside bodiesFinalization of exposure draft of proposed AS
Issuance of exposure draft
Consideration of comments
and finalization of the draft by
ASB
Modification of the draft, if necessary
Issuance of AS
FORMULATION OF AS
NEED FOR GLOBAL STANDARDS IN INDIA
Expanding world trade
Proliferation of multinational corporations
Increasing role of global capital markets
Increased foreign direct investment
Growth of multinational political organizations
A way to minimize costs
IFRS convergence will result in improved
disclosure by Indian companies in line with
global best practices.
INTERNATIONAL FINANCIAL REPORTING
STANDARDS
It is unique, high quality, easily understandable
global accounting standards.
IFRSs are the accounting standards published by the
International Accounting Standards Board (IASB).
The IASB was established in 2001 by its forerunner,
the International Accounting Standards Committee,
which itself was established in 1973.
Key Problems that Cause Resistance to IFRSs
Agreeing on who will create the rules
How different the rules will be from current
national GAAP
Costs of changing GAAPs
National dominance