1. BY Priyanka (Leader)
Kalpana Bhangre
Rohit Kadam
Chirag Shah
Vinayak Nair
Suchi Gala
Anam Shaikh
Suman Yadav
Viral Patel
Prahlad Kulkarni
Sunil
2. Written Documents issued by
Government or Regulatory Body
In India, issued by ICAI on 21st
April,1977
Initiated by Kumar Mangalam Birla,
chairman committee of Corporate
Governance for Financial Disclosures
Also initiated by Chair person of
NACAS
3. Standardise the diverse Accounting
Policies
Add the reliability to the Financial
Statement
Eradicate baffling variation in treatment of
accounting aspects
Facilitate inter-firm and intra-firm
comparison
4. In India, 32 Accounting Standards as IAS
under NACAS
As per International, there are 41
Accounting Standards called as IFRS
Adopted by 8 countries in the world
70 to 80 countries planning to adhere
IFRS
Clause 50 added to the listing agreement
mandatory
5. Accounting StandardsAccounting Standards InitiationInitiation
1. AS 1 to AS 151. AS 1 to AS 15 1979 to 19951979 to 1995
2. AS 16 to AS 292. AS 16 to AS 29 2000 to 20072000 to 2007
3. AS 30 to AS 323. AS 30 to AS 32 Later part of 2007Later part of 2007
6. Specific policies adapted to prepare
AS
Should be disclosed at one place
Deals with disclosure of accounting
policies
Purpose :-
1. Better understanding of AS
2. Better comparison analysis
3. Mostly needed w.r.t Depreciation
7. Used for computation of Cost of
inventories and to show in Balance
Sheet till it is sold
Consists of :-
1. Raw Materials
2. Work in progress
3. Finished goods
4. Spares, etc
8. Determination of Cost of Inventories
Cost of purchase (Purchase price,
duties & taxes, freight inwards)
Cost of conversion
Determination of Net realisable
value
Comparison of cost and net
realisable
9. Incoming and outgoing of cash
Act as barometer to judge surplus and
deficit
Explain Cash flow under 3 heads :-
1. Cash flow from operating activities
2. Cash flow from financing activities
3. Cash flow from investing activities
10. Events occurring between the preparation of
balance sheet date and date on which financial
statement are accepted
Non adjusting events do not effect balance
sheet but there are appropriately disclosed
E.g. Adjusting events
Generally uses Conservative concepts of
Accounting like Bankruptcy, frauds & errors.
11. Net profit or loss for the period
Prior period item
Changes in accounting estimates and
policies
Net profit/loss for period Consists of 2
component
1. Profit and loss of ordinary activities
2. Profit and loss of extra ordinary
activities
12. Occurs due to obsolescence
Distribution of total cost to its useful
life
A non-cash expenditure
Different methods of computation
1. Straight line method ( SLM )
2. Written-down value or diminishing
value (WDV)
13. AS 7 addresses issue of allocation of
revenue & cost attributable to contract
activity
Construction Contract are 2 types
1. Fixed price Construction Contract
2. Cost plus Construction Contract
To calculate profit and loss contract revenue
and cost must be calculated
Profit/loss is to be calculated separately for
each contract
14. Includes
1. Salaries, wages and other related costs of
personnel.
2. Costs of materials and services consumed.
3. A reasonable allocation of overhead costs.
4. Payment to outside bodies for research and
development projects related to the enterprise.
5. an appropriate amortisation of the cost of
building, equipment and facilities which have no
alternative economic use, to the extent that they
are used for research and development.
15. Means gross inflow of cash and other
consideration like arising out of :-
For an item to be recognized as revenue
a) It should be measurable
b) There should be reasonably certainty
about its collectability
Areas covered
a. Sale of goods/service c. Interest
b. Dividend d. Royalty
16. Assets held with the intention of being
used for the purpose of producing and
providing goods and services
Sometimes the total expenditure of a fixed
may be allocated to its component parts &
each such part should be depreciated
separately
Shown at either Historical or Revalued
value
P & L’s on disposal of FA are to be
recognized in P & L