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Accounting Standards can be any form of statement which consists of rules and guidelines, issued by the accounting institutions, for the preparation of uniform and consistent financial statements. This also includes disclosures required by the different users of accounting information.
Here is the summary of accounting standards issued by the ICAI as well as Companies (Accounting Standards) Rules, 2006 notified by the Ministry of Corporate Affairs, Government of India. These standards are followed by the preparers and auditors of financial statements along with other stakeholders.
This standard deals with the disclosure of significant accounting policies which are followed in preparing and presenting financial statements.
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.
This standard deals with the historical changes in cash and cash equivalents of an enterprise. This is done by preparing a statement popularly called Cash Flow Statement. This statement classifies cash flows during the period from operating, investing and financing activities.
This Standard deals with the treatment of contingencies and events occurring after the balance sheet date.
This standard should be applied by an enterprise in presenting profit or loss from activities in the normal course of business, extraordinary items and prior period items. This also includes changes in accounting estimates and changes in accounting policies.
This standard prescribes the accounting for construction contracts in the financial statements of contractors.
This standard deals with the recognition of revenue in Profit and Loss a/c of an enterprise. Revenue recognition is concerned with the revenue arising in the course of the ordinary activities of the enterprise such as the sale of goods, rendering of services, interest, royalties and dividends.
The objective of this Standard is to prescribe the accounting treatment for property, plant and equipment (PPE).
AS 11 lays down principles of accounting for foreign currency transactions and foreign operations, i.e., which exchange rate to utilize and how to recognize the financial effect of exchange rates fluctuations.
This standard deals with accounting for government grants. These are sometimes called as subsidies, cash incentives, duty drawbacks, etc.
This standard deals with accounting for investments in the financial statements of enterprises and related disclosure requirements.
This standard deals with accounting for amalgamations and the treatment of any resultant goodwill or reserves.
The objective of this standard is to prescribe the accounting treatment and disclosure for employee benefits in the books of an employer except for employee share-based payments. It does not deal with accounting and reporting by employee benefit plans.
This standard should be applied in accounting for borrowing costs. It does not deal with the actual or imputed cost of owners’ equity, including preference share capital not classified as a liability.
The objective of this standard is to establish principles for reporting financial information for different types of segments, products, services and enterprise produces and the different geographical areas in which it operates.
This standard should be applied in reporting related party transactions between a reporting enterprise. The standard applies to the financial statements of each reporting enterprise and also to the consolidated financial statements presented by a holding company.
The objective of this standard is to prescribe the appropriate accounting policies and disclosures in relation to finance leases and operating leases.
AS 20 prescribes principles for the determination and presentation of earnings per share which will improve the comparison of performance among different enterprises for the same accounting period and among different accounting periods for the same enterprise.
The objective of this standard is to lay down principles and procedures for the preparation and presentation of consolidated financial statements. Consolidated financial statements are predetermined to present financial information about a parent and its subsidiaries as a single economic entity. This is done to show the economic resources controlled by the entity as a whole, obligations of the group and results the group achieves with its resources.
The objective of this Standard is to prescribe the accounting treatment of taxes on income since the taxable income may be significantly different from the income displayed in financial statements due to many reasons, posing problems in matching of taxes against revenue for a period.
This standard should be applied in accounting for investments in associates in the preparation and presentation of consolidated Financial Statements (CFS) by an investor.
The objective of AS 24 is to establish principles for reporting information about discontinuing operations. This helps the users of financial statements to make an estimate of an enterprise’s cash flows, earnings-generating capacity, and financial position by segregating information about discontinuing operations and continuing operations. This accounting standard applies to all discontinuing operations of an enterprise.
This standard applies if an entity is required or elects to publish an interim financial report. The prime objective of this standard is to prescribe the minimum content of an interim financial report. This standard also prescribes the principles for the recognition and measurement of financial statements for an interim period.
AS 26 prescribes the accounting treatment for intangible assets. Intangible assets refer to non-monetary assets which are identifiable, without physical substance, held for use in the production or supply of goods, services, administrative purposes, and so on.
The objective of AS 27 is to set out the principles and procedures for accounting for interests in joint ventures and reporting venture assets, liabilities, income and expenses in the financial statements of ventures and investors.
The objective of AS 28 is to prescribe the procedures that an enterprise applies to ensure that its assets are carried at no more than their recoverable amount. The asset can be reported as impaired if its carrying amount exceeds the amount to be recovered through the use or sale of the asset and it requires the business entities to recognize an impairment loss in such cases.
The objective of AS 29 is to ensure that appropriate recognition criteria and measurement bases are applied to provisions and contingent liabilities. This ensures that sufficient information is disclosed in the notes to the financial statements which enable users to understand their nature, timing, and amount. The objective here is also to lay down appropriate accounting for contingent assets.
ICAI announced withdrawing the following accounting standards:
The standard-setting body in Indonesia is the Financial Accounting Standards Board (Dewan Standar Akuntansi Keuangan or DSAK) under the Indonesian Institute of Accountants (Ikatan Akuntan Indonesia or IAI). Under Indonesian law, both public and private companies must comply with accounting standards issued by the DSAK-IAI.
The financial statements must comply with International Financial Reporting Standards (IFRS). ICPAK (Institute of Certified Public Accountants of Kenya) also requires that all audits are conducted in accordance with International Standards on Auditing (ISA).
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