A standard is an agreed, repeatable way of doing something.
It is a published document that contains a technical
specification or other precise criteria designed to be used
consistently as a rule, guideline, or definition.
Standards are created by bringing together the experience and
expertise of all interested parties.
Standards are designed for voluntary use and do not impose any
regulations. However, laws and regulations may refer to certain
standards and make compliance with them compulsory.
Accounting Standards are formulated with a view to harmonize
different accounting policies and practices in use in a country
The objective of Accounting Standards is, therefore,
• to harmonize the diverse accounting practices, methods,
procedures by achieving uniformity and consistency in
internal and external reporting practices
• to guide the preparers in the preparation of financial
• to reduce the accounting alternatives in the preparation of
• providing meaningful information to various users of financial
• enable them to make informed economic decisions
To ensure understandability and reliability of
To ensure comparability of financial statements
To help assess managerial efficiency
To decrease the chances of fraud and insufficient
disclosures of vital information
An older set of standards stating how particular types of
transactions and other events should be reflected in financial
International accounting standards are accounting standards
issued by the International Accounting Standards Board (IASB)
and its predecessor, the International Accounting Standards
Listed companies, and sometimes unlisted companies, are required
to use the standards in their financial statements in those countries
which have adopted them.
Since 2001, the new set of standards has been known as the
international financial reporting standards (IFRS) and has
been issued by the International Accounting Standards Board
The history of international accounting standards really
began in 1966, with the proposal to establish an International
Study Group comprising the Institute of Chartered
Accountants of England & Wales (ICAEW), American
Institute of Certified Public Accountants (AICPA) and
Canadian Institute of Chartered Accountants (CICA).
In February 1967 this resulted in the foundation of the
Accountants International Study Group (AISG), which began
to publish papers on important topics every few months and
created an appetite for change
In June 1973 the International Accounting Standards
Committee (IASC) came into existence, with the stated intent
that the new international standards it released must "be
capable of rapid acceptance and implementation world-
The IASC survived for 27 years, until 2001, when the
organisation was restructured and the IASC was replaced by
the International Accounting Standards Board (IASB).
Between 1973 and 2000 the International Accounting
Standards Committee (IASC) released a series of standards
called 'International Accounting Standards' in a
numerical sequence that began with IAS 1 and ended with
IAS 41 Agriculture which was published in December 2000
The Standards Interpretations Committee (SIC) was established
in 1997 to consider contentious accounting issues that needed
authorative guidance to stop widespread variation in practice.
The IASC restructured their organisation at the end of the
twentieth century, which resulted in the formation of the
International Accounting Standards Board (IASB). These changes
came into effect on 1 April 2001
At the time the IASB stated that they would adopt the body of
standards issued by the Board of the International Accounting
Standards Committee (which would continue to be designated
'International Accounting Standards' ), but any new standards
would be published in a series called International Financial
Reporting Standards (IFRS)
Standards Interpretations Committee (SIC) has been replaced by
Internations Financial Reporting Interpretation Committee
A set of international accounting standards stating how particular
types of transactions and other events should be reported in
financial statements. IFRS are issued by the International
Accounting Standards Board.
IFRS are sometimes confused with International Accounting
Standards (IAS), which are the older standards that IFRS
replaced. (IAS were issued from 1973 to 2000.)
29 +11 +8 +16
IAS (revised) SICs IFRS IFRICs
Common basis of comparison
Clarity and Productivity
Consistent financial reporting basis
Improved access to international capital markets
Lower cost of capital
Escape multiple reporting
Reflect true value of acquisitions
Level of confidence
Benchmarking with global peers
Merger and Takeover activity
The Accounting Standards Board (ASB) of the Institute
of Charted Accountants of India(ICAI) formulates (AS)
based on the IFRS keeping in view the local conditions
including legal and economic environment and
The level of preparation of the industry and the
In line with global trend, the Institute of Chartered
Accountants of India (ICAI) has proposed a plan for
convergence with IFRS w.e.f. April 1, 2011
In India, ICAI has issued a document entitled ‘Concept
paper of convergence with IFRS in India’ to evaluate
the need for Indian GAAP to change to IFRS
The paper recognises the advantages arising from
convergence to various stakeholders
Convergence means to achieve harmony with IFRS i.e.
National Accounting Standards comply with all the
requirements of IFRS
Convergence doesn’t mean that IFRS should be adopted
word by word
Adding disclosure requirements or removing optional
treatments do not create non compliance with IFRS.
But, such changes must be made clear so that the users
are aware of them
Indian Accounting Standards, (abbreviated as Ind AS) are a set
of accounting standards notified by the Ministry of Corporate
Affairs which are converged with International Financial
Reporting Standards (IFRS).
These accounting standards are formulated by Accounting
Standards Board of Institute of Chartered Accountants of India.
Now India will have two sets of accounting standards viz.
existing accounting standards under Companies (Accounting
Standard) Rules, 2006 and IFRS converged Indian Accounting
The Ind AS are named and numbered in the same way as the
NACAS recommend these standards to the Ministry of Corporate
The Ministry of Corporate Affairs has to spell out the accounting
standards applicable for companies in India.
As on date the Ministry of Corporate Affairs notified 35 Indian
Accounting Standards (Ind AS). But it has not notified the date of
implementation of the same.
Indian Accounting Standard
Reporting under IFRS is applicable for accounting periods
beginning on or after April 2011
Keeping in view the complexity of IFRSs , the IACI is of the
view that IFRSs should be adopted for public interest entities i.e.
listed entities, banks, insurance companies on or after 1st April
The numbers of existing accounting standards may be given in
brackets for the purpose of easier identification
The IFRSs when adopted will take into account the
interpretations issued by IASB