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what is accounting standard?
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Answer Posted / jayashree satish poojary
Accounting is the art of recording transactions in the best
manner possible, so as to enable the reader to arrive at
judgments/come to conclusions, and in this regard it is
utmost necessary that there are set guidelines. These
guidelines are generally called accounting policies. The
intricacies of accounting policies permitted Companies to
alter their accounting principles for their benefit. This
made it impossible to make comparisons. In order to avoid
the above and to have a harmonised accounting principle,
Standards needed to be set by recognised accounting bodies.
This paved the way for Accounting Standards to come into
existence.
Accounting Standards in India are issued By the Institute
of Chartered Accountanst of India (ICAI). At present there
are 30 Accounting Standards issued by ICAI.
Objective of Accounting Standards
Objective of Accounting Standards is to standarize the
diverse accounting policies and practices with a view to
eliminate to the extent possible the non-comparability of
financial statements and the reliability to the financial
statements.
The institute of Chatered Accountants of India, recognizing
the need to harmonize the diversre accounting policies and
practices, constituted at Accounting Standard Board (ASB)
on 21st April, 1977.
Compliance with Accounting Standards issued by ICAI
Sub Section(3A) to section 211 of Companies Act, 1956
requires that every Profit/Loss Account and Balance Sheet
shall comply with the Accounting Standards. 'Accounting
Standards' means the standard of accounting recomended by
the ICAI and prescribed by the Central Government in
consultation with the National Advisory Committee on
Accounting Standards(NACAs) constituted under section 210
(1) of companies Act, 1956.
Accounting Standards Issued by the Institute of Chatered
Accountants of India are as below:
Disclosure of accounting policies:
Valuation Of Inventories:
Cash Flow Statements
Contingencies and events Occurring after the Balance sheet
Date
Net Profit or loss For the period, Prior period items and
Changes in accounting Policies.
Depreciation accounting.
Construction Contracts.
Revenue Recognition.
Accounting For Fixed Assets.
The Effect of Changes In Foreign Exchange Rates.
Accounting For Government Grants.
Accounting For Investments.
Accounting For Amalgamation.
Employee Benefits.
Borrowing Cost.
Segment Reporting.
Related Party Disclosures.
Accounting For Leases.
Earning Per Share.
Consolidated Financial Statement.
Accounting For Taxes on Income.
Accounting for Investment in associates in Consolidated
Financial Statement.
Discontinuing Operation.
Interim Financial Reporting.
Intangible assets.
Financial Reporting on Interest in joint Ventures.
Impairment Of assets.
Provisions, Contingent, liabilities and Contingent assets.
Financial instrument.
Financial Instrument: presentation.
Financial Instruments, Disclosures and Limited revision to
accounting standards.
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