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  • Accounting Standard-1: Disclosure of Accounting Policies

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    Yudhister Reddy
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    This document outlines the purpose and meaning of accounting standard 1 on the disclosure of accounting policies. It discusses that the standard is intended to facilitate understanding and comparison of financial statements by requiring disclosure of specific accounting principles and methods used to apply those principles. It also lists key areas where accounting policies are needed, such as treatment of goodwill, inventories, investments, fixed assets, and retirement benefits. The primary consideration for selecting policies is that they produce financial statements that present a true and fair view, while secondary considerations include prudence, substance, and materiality. Fundamental assumptions around going concern, consistency and accrual are also discussed.

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    This document outlines the purpose and meaning of accounting standard 1 on the disclosure of accounting policies. It discusses that the standard is intended to facilitate understanding and comparison of financial statements by requiring disclosure of specific accounting principles and methods used to apply those principles. It also lists key areas where accounting policies are needed, such as treatment of goodwill, inventories, investments, fixed assets, and retirement benefits. The primary consideration for selecting policies is that they produce financial statements that present a true and fair view, while secondary considerations include prudence, substance, and materiality. Fundamental assumptions around going concern, consistency and accrual are also discussed.

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    26 views8 pages

    Accounting Standard-1: Disclosure of Accounting Policies

    Uploaded by

    Yudhister Reddy
    This document outlines the purpose and meaning of accounting standard 1 on the disclosure of accounting policies. It discusses that the standard is intended to facilitate understanding and comparison of financial statements by requiring disclosure of specific accounting principles and methods used to apply those principles. It also lists key areas where accounting policies are needed, such as treatment of goodwill, inventories, investments, fixed assets, and retirement benefits. The primary consideration for selecting policies is that they produce financial statements that present a true and fair view, while secondary considerations include prudence, substance, and materiality. Fundamental assumptions around going concern, consistency and accrual are also discussed.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    ACCOUNTING STANDARD-1

    DISCLOSURE OF ACCOUNTING POLICIES

    PURPOSE
    To facilitate better understanding of financial statements. To facilitate meaningful comparison between financial statements of different enterprises.

    MEANING OF ACCOUNTING POLICIES


    Specific accounting principles.

    Methods of applying those principles adopted by the enterprise.


    In prepration of financial statements.

    AREAS ENCOUNTERED
    Treatment of Goodwill
    Valuation of Inventories Valuation of Investments Valuation of Fixed Assets Methods of Depreciation Treatment of retirement benefits Treatment of Contingent Liabilities

    CONSIDERATIONS IN THE SELECTION OF ACCOUNTING POLICIES


    PRIMARY CONSIDERATION

    The financial statements prepared & presented on the basis of such accounting policies should represent a true and fair view of the state of affairs of the enterprise.

    CONSIDERATIONS IN THE SELECTION OF ACCOUNTING POLICIES


    SECONDARY CONSIDERATION
    Prudence Substance Materiality

    FUNDAMENTAL ACCOUNTING ASSUMPTIONS


    GOING CONCERN CONSISTENCY ACCRUAL These are not specifically stated in the financial statements. Their acceptance and usage is assumed.

    DISCLOSURE OF ACCOUNTING
    POLICIES
    All significant accounting policies adopted should be disclosed.
    The disclosure should form part of the financial statements. Any change in the accounting policies which has a material effect in the current period should be disclosed along with amount of effect. If the fundamental accounting assumptions is not followed, the fact should be disclosed.

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