Insurers' journeys to build a mastery in the IoT usage
Ias 1
1. Indian Accounting
Standards 1
Disclosure of Accounting policies
Presented by:
Amit Vira ()
Anjali Jalan (13)
Ashish Kaushik (18)
Murtuza Kothari (20)
Utsav Thakkar ()
2. Indian IFRS US
GAAP /IAS GAAP
Various Accounting Standards
3. Accounting Standard Board („ASB‟) - 1977
Issued by the Institute of Chartered
Accountants of India (ICAI)
Objective is to standardize the diverse
accounting policies and practices.
They are termed as „accounting
principles‟.
Indian GAAP
4. IFRS stands for “International Financial
Reporting Standards” and includes
International Accounting Standards (IASs)
until they are replaced.
Developed and approved by IASB
(International Accounting Standard Board)
Principle-based standard rather than rule
based.
What is IFRS ?
5. Recognised as Global Reporting Standards
'National GAAP' is becoming rare.
Global capital markets become increasingly integrated
More than 100 countries such as European Union,
Australia, New Zealand and Russia currently permit
the use of IFRS in their countries.
The SEC has allowed the use of IFRS without
reconciliation to US GAAP in the financial reports filed
by foreign private issuers, thereby, giving foreign
private issuers a choice between IFRS and US GAAP
Why IFRS ?
6. Increasing growth of international
business.
Encourage international investing
Reduced cost of compliances
Increase mobility to professionals
Better understanding of financial
statements of international companies.
Enhance comparability across the globe.
Benefits of adopting IFRS
8. Initial increase in cost due to dual reporting
Proper training to ensure uniform understanding
and consistent application.
Additional cost for modifying the companies IT
systems and procedures.
Limited pool of trained resource and persons
having expert knowledge
Differences between Indian GAAP and IFRS may
impact business decision / financial performance
of an entity.
IFRS Challenges
9. Under US GAAP, detailed framework for pronouncing accounting standards
are contained in SFAC- Statement of Financial Accounting Concepts .Total
seven SFAC have been issued, out of which SFAC-3 is replaced.
SFAC forms the basis of pronouncement of FAS. SFAC is not authoritative
GAAP, but can be used if no GAAP exists. There are 6 SFAC in force on
Objective , Quality Characteristics, Recognition and measurement,
Elements and Cash flow.
GAAP /SFAC pronouncement are made by FASB which is not an
accounting Body like ICAI. AICPA does not pronounce GAAP.
Over 150 FAS announced till date, many of which are amendment /
replacement.
Separate Accounting Board for Government Companies called GASB.
US GAAP
10. Issued in 1979 by ICAI
First ever Accounting Standard
Mandatory for all enterprises
Deals with the disclosure
Introduction to AS1
11. IFRS, International Financial Reporting
Standards.
◦ Worldwide recognition and usage
◦ AS1 corresponds to IAS 1 and IAS 8
US GAAP, General Acceptable Accounting
Practices.
◦ Accepted and practiced only within the USA.
◦ AS1 corresponds to SFAS - 154
Corresponding Accounting Standards
12. Basis for presentation of general purpose
financial statements.
An entity shall apply this Standard in
preparing and presenting general purpose
financial statements in accordance with
Indian Accounting Standards.
Objective and Scope
13. Heading under
which
Accounting
Standard 1
Policies are
stated.
Figure: 1
14. Going
Concern
(Fig. 2)
Fundamental
Assumptions
Accrual Consistency
(Fig. 2)
(Fig. 3)
Fundamental Accounting Assumptions
17. Methods of depreciation, depletion &
amortization (Fig. 4)
Valuation of Fixed assets (Fig. 5)
Treatment of expenditure during construction
Treatment of employee benefits (Fig. 6)
Conversion or translation of foreign currency
items. (Fig. 5)
Treatment of Goodwill (Fig. 7)
*The above list is not intended to be exhaustive
Differing Accounting Policies
19. Valuation of Fixed Assets
Conversion of foreign currency items
Figure: 5.
20. Treatment of Employee Benefits
This section is not treated as
extraordinary in IAS1.
Figure: 6.
21. Treatment of Goodwill
IAS 1 requires earliest possible comparative data available and a
restatement of the same in IAS 8
Figure: 7.
22. Substance
over Form
Prudence Materiality
Major
Considerations
Consideration of Accounting Policies
23. All Significant accounting policies
Any change in the accounting policies
If the fundamental accounting
assumptions are not followed
To be disclosed in one place
Disclosures
24. Disclosure
Disclosed on one place in balance sheet
Disclose change in accounting policies
Disclose different assumptions
Main Principles
25. Indian GAAP IAS – 1 US GAAP
Accounting Accounting The definition US GAAP uses
policy policy refers to of accounting the term
specific policy in IAS is „accounting
accounting substantially principles‟ to
principles and similar to refer to the
methods of Indian GAAP. accounting
applying them. policy.
Disclosure An entity is An entity is The practice is
required to required to same as
disclose the disclose the stipulated in
accounting accounting IAS.
policy at one policy in a
place as a part separate
of financial component –
statements „Notes to
accounts‟
Source: Indian Accounting Standards – Asish k. Bhattacharya
Comparison b/w AS1, US GAAP & IFRS
26. Indian GAAP IFRS US GAAP
Classification Fixed Current Current
of Assets Current Non- Current Non- Current
Investments
Loans &
Advancements
Classification Secured Current Current
of Liabilities Unsecured Non- Current Non- Current
Current Liab. &
Provisions
Treasury No Not Mentioned Presented.
Stock Presentation
Share issue Written off Shown as a Shown as a
expenses against a share deduction in deduction in
premium equity section equity section
account
Changes in Not Required Required Required
Equity
Comparison b/w IGAAP, US GAAP & IFRS
27. Sources:
AS1 brochure by ICAI.
Indian Accounting Standards by Asish K.
Bhattacharya.
Annual Report of Tata Motors 2010.
Various Misc. sources off Google, soft
copies available.
