Accounting

Standards

RTI, Jaipur

Session overview
Every

profession develops a body of knowledge

consisting of principles, which are considered
as standard to be attained. Accounting is no
exception. In India, the Institute of Chartered
Accountants of India has developed Accounting
Standards; based on the generally accepted
accounting
standards
to
be
used
in
preparation of financial statements.

RTI, Jaipur

Session
coverage

During this session, we will learn:

the
importance
of
the
accounting
standards in preparation of financial
statements; and
application of AS 1 relating to Disclosure
of Accounting Policies, and
application of AS 4 relating to Events
Occurring After the Balance Sheet Date for
preparation of financial statements.

RTI, Jaipur

Learning Objective
At the end of the session, the learner will be

able to state the importance of Accounting

Standards in the preparation of financial
statements and application of AS 1 relating to
Disclosure of Accounting Policies and AS 4
relating to Events Occurring After the Balance
Sheet Date in the preparation of Financial
Statements.

RTI, Jaipur

Importance of Accounting
Standards

The users of the financial statements need an

assurance that the entities preparing their
financial statements follow the accepted
standards while presenting their financial
information in the financial statements.

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LIST OF ACCOUNTING STANDARDS

ISSUED SO FAR
Institute of Chartered Accountants of India

has so far issued 29 Accounting Standards on

the advise of the accounting Standards Board

RTI, Jaipur

LIST OF ACCOUNTING STANDARDS

ISSUED SO FAR
AS 1-Disclosure of Accounting Policies
AS 2-Valuation of Inventories
AS 3-Cash flow Statements
AS 4-Contingencies and Events Occurring

After the Balance Sheet Date

AS 5 -Net Profit or Loss for the Period, Prior
Period Items and Changes in Accounting
Policies
AS 6-Depreciation Accounting
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LIST OF ACCOUNTING STANDARDS

ISSUED SO FAR
AS 7-Accounting for Construction

Contracts
AS 8-Accounting for Research and
Development
AS 9-Revenue Recognition
AS 10-Accounting for Fixed Assets
AS 11-Accounting for the Effects of
Changes in Foreign Exchange Rates
AS 12-Accounting for Government Grants
RTI, Jaipur

LIST OF ACCOUNTING STANDARDS

ISSUED SO FAR
AS 13-Accounting for Investments
AS 14-Accounting for Amalgamations
AS 15-Accounting for Retirement Benefits

in the financial Statements of Employers

AS 16-Borrowing Costs
AS 17-Segment Reporting
AS 18-Related Party Disclosures
AS 19-Leases
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LIST OF ACCOUNTING STANDARDS

ISSUED SO FAR
AS
AS
AS
AS

20-Earnings Per Share

21-Consolidated Financial Statements
22-Accounting for Taxes on Income
23-Accounting for Investments in
Associates in Consolidated Financial
Statements
AS 24-Discontinuing Operations
AS 25-Interim Financial Reporting

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LIST OF ACCOUNTING STANDARDS

ISSUED SO FAR
AS 26-Intangible Assets
AS 27-Financial Reporting of Interests in Joint

Ventures
AS 28-Impairment of Assets
AS 29-Provisions, contingent Liabilities and
Contingent Assets

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RTI, Jaipur

12

AS 1 Disclosure of Accounting
Policies
Fundamental Accounting Assumptions
Accounting Policies

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13

Fundamental Accounting
Assumptions

Going concern
Consistency
Accrual

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Areas in which differing

accounting Policies are
Methods of depreciation, depletion and
encountered
amortization;
Treatment of expenditure during construction;
Conversion or translation of foreign currency

items;

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Areas in which differing

accounting Policies are
Valuation of inventories;
encountered
Treatment of goodwill;
Valuation of investments;
Treatment of retirement benefits;

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Areas in which differing

accounting Policies are
Recognition of profit on long-term contracts;
encountered
Valuation of fixed assets;
Treatment of contingent liabilities.

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Considerations in the
selection
of
Accounting
Prudence
Policies
Substance over form
Materiality

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Accounting Standard-1
All

significant
accounting
policies
adopted
in
preparation
and
presentation of financial statements
should be disclosed.

he disclosure of significant accounting

policies as such should form part of the

financial statement and the significant
accounting policies should normally be
disclosed in one place.
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Accounting Standard-1

If the fundamental accounting

assumptions,
viz.,
going
concern,
consistency and accrual are followed in
financial statements, specific disclosure
is not required.
If a fundamental
accounting assumption is not followed,
the fact should be disclosed.

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RTI, Jaipur

21

Accounting Standard-4
This standard deals with treatment in financial

statements of:
Contingencies; and
Events occurring after the balance sheet date.

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Accounting Standard-4
Does not apply to:
(a) Liabilities of life assurance and

general insurance enterprises arising from

policies issued;
(b) Obligations under retirement benefit
plans; and
Commitments arising from long-term
lease contracts.

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Definitions
A contingency is a

condition or situation,
the ultimate outcome
of which, gain or loss,
will be known or
determined only on the
occurrence or nonoccurrence of one or
more uncertain future
events.

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Events after the

balance sheet date are

those significant events,
both favourable and
unfavourable, that occur
between the balance sheet
date and the date on which
the financial statements
are approved by the Board
of Directors
represent material
changes and
commitments affecting
the financial position of
the enterprise
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