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What is I F R S ?How accounting standard are

being issued?
Indian Financial Reporting System(IF R S) set common rules so that financial standard can
be consistent,transparent and comparable all around the world I F R S are issued by
accounting standard board (I A S B) .This specify how companies must maintain and report
their accounts defining the types of transaction and other event with their financial impact. I
F R S were established to create a common accounting language so that business and their
financial system can be consistent and reliable from company to company and from country
to country
Key takes away :-

I F R S were established to bring consistency to accounting standard practices regardless

of the company or the country

They are issued by I A S B and address record keeping, accounting reporting and other
aspect of financial reporting

I F R S benefit companies at the individual alike increasing greater corporate

transparency

The downside of I F R S are that they are not universal with USA and Pakistan

Procedure for issuing an accounting standard

1. The accounting standard board (I A S B) determine the board areas in which accounting
standard are needed to be formulated.

2. In the preparation of accounting standard, The accounting standard board (I A S B) will

be assisted in the study group constituted to considered specific subject in the formation
of study group provision will be made for wide participate by the members of institute

3. the draft of the proposal standard will normally include the following points

Objective of the standard

definition of the terms used in the standard

recognition and management principle

presentation and disclosure requirements

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 4. The A S B will considered the preliminary draft prepared by the study group and if any
revision of the draft is required on the basis of deliberation(suggestion) the accounting
standard bond will make the same and refer to study group

5. the A S B Will circulate the draft of accounting Standard to the council of ICAI along
with 10 different Bodies

Department of company affair (D C A )

central board of direct access (C B D A)

the institute of cost and work accountant of India (T C W A I)

institute of company, secretary, of India (I C S I)Security exchange Board of India

(S E BI )

Standard conference of public enterprise (S C O P E)

associate chamber of commerce and industry (A S O C A H M)

Indian bank Associate(I B A )

6. The A S B will hold the meeting with the specified representative to ascertain those
views of the proposed draft of accounting Standard on the basis of comments received
and discuss with the representatives of specified the draft of the proposed accounting
standard

7.

The exposure Draft (final draft) of the proposed accounting standard will be issued
for the comments by the members of institute and public

The exposure draft will specifically will be sent to specified body, stock exchange
and other interested group as appropriate

8. After taking into the consideration the comment received on the draft of the proposed
standard will be finalized by A S B and is being submitted to the standard of I C A I

9. The council of I C A I will consider the final draft and if found necessary modify the
same in consideration with A S B.

10. For the substance revision of accounting standard followed is same as above.

Standard I F R S requirements

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 I F R S covers a wide range of accounting activities ; there are certain aspect of business
practice for which I F R S sets out mandatory.

1. Statement of financial position(balance sheet) - It influence the way in which the

components of balance sheet reported

2. Statement of comprehensive income - This can takes the form of one statement or it can
be separated into profit and loss statement. statement of other income include property
and equipment

3. Statement of change in equity - It is also known as the statement of retained earning in

this document the company change in earning profits for the given financial period.

4. Statement of Cash Flow - This report summarizes companies financial transaction in the
given period , separated the cash flow into operation investing financing activities.

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