This document provides an overview of key accounting concepts and standards for entrepreneurs. It addresses topics like debenture redemption funds, treatment of preliminary expenses, foreign exchange transactions, government grants, related party disclosures, lease accounting, earnings per share calculations, tax differences, and definitions of associates. The document is intended to help entrepreneurs and participants in entrepreneurship programs understand basic accounting principles.
The document compares Indian Accounting Standards and International Financial Reporting Standards regarding the accounting treatment of fixed assets. Some key differences include:
- Under IAS 16, subsequent replacement costs of parts must be capitalized, whereas AS 10 only requires capitalization if it increases future benefits.
- IAS 16 requires capitalization of major inspection costs, whereas AS 10 does not.
- IAS 16 does not allow gains on derecognition of assets to be treated as revenue, but AS 10 is silent on this.
The document also discusses the accounting for government grants, foreign currency transactions, and integral versus non-integral foreign operations.
This document discusses working capital assessment. It defines working capital and its components like current assets and current liabilities. It explains the operating cycle and factors influencing working capital requirements. Various methods of assessing working capital are described, including turnover method, MPBF method, cash budget method and operating cycle method. Guidelines for justifying projections and assessing non-fund based limits like letters of credit and bank guarantees are also provided. Ratios used in analyzing a borrower's financial strength are listed.
Comparison of IFRS, India GAAP & USGAAP (Revenue Recogniation) by Yash BatraYash Batra
This document provides a comparison of revenue recognition standards under IFRS, US GAAP, and India GAAP. It summarizes the key standards and interpretations for each framework, and compares their treatment of revenue from sales of goods, services, construction contracts, interest income, barter transactions, and government grants. Some differences noted include US GAAP having over 100 industry-specific standards, while IFRS and India GAAP principles are more aligned though details sometimes differ.
This document discusses Accounting Standards 6 and 10 regarding fixed assets and depreciation. It defines fixed assets as non-current assets used over multiple accounting periods with a limited useful life. It outlines various methods for calculating depreciation expense, such as the straight-line and reducing balance methods. The document also discusses disclosure requirements regarding depreciation policies, accumulated depreciation amounts, and revaluations of fixed assets.
This document provides an overview of several accounting standards including AS 10 on fixed assets, AS 20 on earnings per share, and AS 26 on intangible assets. It discusses the key objectives, applicability, recognition criteria, measurement, and disclosure requirements for accounting and reporting for fixed assets, EPS calculation, and intangible assets according to the relevant accounting standards. The document also covers terminology, components of cost, impairment, amortization, and other accounting treatments for these items to ensure compliance with Indian accounting standards.
There are major differences between US GAAP and Indian GAAP in their underlying assumptions, format/presentation of financial statements, treatment of cash flows, depreciation, long term debts, consolidation of subsidiaries, investments, foreign currency transactions, research & development expenditures, revaluation reserves, extraordinary/prior period items, goodwill, capital expenses, preoperative expenses, and employee benefits. Some of the key differences include more conservative assumptions in Indian GAAP, flexibility in US GAAP financial statement presentation, less stringent cash flow reporting requirements in Indian GAAP, and differences in the treatment of depreciation methods, foreign currency translations, and research and development costs.
This document provides an overview of Accounting Standard 10 (AS 10) regarding accounting for fixed assets in India. AS 10 applies to companies listed on a recognized stock exchange and large commercial enterprises. It defines fixed assets as assets used for producing goods and services, not held for sale. It discusses the components that make up the cost of a fixed asset, treatment of improvements and repairs, and disclosure requirements regarding fixed assets in financial statements.
The document compares Indian Accounting Standards and International Financial Reporting Standards regarding the accounting treatment of fixed assets. Some key differences include:
- Under IAS 16, subsequent replacement costs of parts must be capitalized, whereas AS 10 only requires capitalization if it increases future benefits.
- IAS 16 requires capitalization of major inspection costs, whereas AS 10 does not.
- IAS 16 does not allow gains on derecognition of assets to be treated as revenue, but AS 10 is silent on this.
The document also discusses the accounting for government grants, foreign currency transactions, and integral versus non-integral foreign operations.
This document discusses working capital assessment. It defines working capital and its components like current assets and current liabilities. It explains the operating cycle and factors influencing working capital requirements. Various methods of assessing working capital are described, including turnover method, MPBF method, cash budget method and operating cycle method. Guidelines for justifying projections and assessing non-fund based limits like letters of credit and bank guarantees are also provided. Ratios used in analyzing a borrower's financial strength are listed.
Comparison of IFRS, India GAAP & USGAAP (Revenue Recogniation) by Yash BatraYash Batra
This document provides a comparison of revenue recognition standards under IFRS, US GAAP, and India GAAP. It summarizes the key standards and interpretations for each framework, and compares their treatment of revenue from sales of goods, services, construction contracts, interest income, barter transactions, and government grants. Some differences noted include US GAAP having over 100 industry-specific standards, while IFRS and India GAAP principles are more aligned though details sometimes differ.
This document discusses Accounting Standards 6 and 10 regarding fixed assets and depreciation. It defines fixed assets as non-current assets used over multiple accounting periods with a limited useful life. It outlines various methods for calculating depreciation expense, such as the straight-line and reducing balance methods. The document also discusses disclosure requirements regarding depreciation policies, accumulated depreciation amounts, and revaluations of fixed assets.
This document provides an overview of several accounting standards including AS 10 on fixed assets, AS 20 on earnings per share, and AS 26 on intangible assets. It discusses the key objectives, applicability, recognition criteria, measurement, and disclosure requirements for accounting and reporting for fixed assets, EPS calculation, and intangible assets according to the relevant accounting standards. The document also covers terminology, components of cost, impairment, amortization, and other accounting treatments for these items to ensure compliance with Indian accounting standards.
There are major differences between US GAAP and Indian GAAP in their underlying assumptions, format/presentation of financial statements, treatment of cash flows, depreciation, long term debts, consolidation of subsidiaries, investments, foreign currency transactions, research & development expenditures, revaluation reserves, extraordinary/prior period items, goodwill, capital expenses, preoperative expenses, and employee benefits. Some of the key differences include more conservative assumptions in Indian GAAP, flexibility in US GAAP financial statement presentation, less stringent cash flow reporting requirements in Indian GAAP, and differences in the treatment of depreciation methods, foreign currency translations, and research and development costs.
This document provides an overview of Accounting Standard 10 (AS 10) regarding accounting for fixed assets in India. AS 10 applies to companies listed on a recognized stock exchange and large commercial enterprises. It defines fixed assets as assets used for producing goods and services, not held for sale. It discusses the components that make up the cost of a fixed asset, treatment of improvements and repairs, and disclosure requirements regarding fixed assets in financial statements.
This document discusses Indian Accounting Standard 3 on cash flow statements. It defines key terms like cash, cash equivalents, operating activities, investing activities and financing activities. It explains the direct and indirect methods of preparing cash flow statements and requirements around classification of cash flows from various transactions like tax, foreign exchange, dividends and interest. The standard aims to provide useful information on changes in cash balances to investors and other stakeholders.
Cash Flow Statement is a basic concept which every young manager must learn. This presentation excellently explains what you should know about this topic!
How to manage for preparation of md&a disclosuresHamdy Rashed
The disclosures in Corporate Governance Report, Sustainability Report and Management Discussion & Analysis (MD&A) Report are more common requirement of many stock exchange markets requirements of other organization. However, IFRS requires many disclosures but financial standards do not cover all information. Therefore, Stock Exchange market and other organizations require additional and more concise information that should be disclosed on frequently basis to provide the readers of annual report more adequate and comprehensive view of Companies.
Keywords: Management Discussion & Analysis Report, MD&A, Corporate Governance, Sustainability, Corporate Social Responsibility, listing Companies.
This document summarizes Accounting Standards 1-15 presented by Dr. Rana Singh. It discusses the key aspects of each standard including disclosure of accounting policies, valuation of inventories, cash flow reporting, contingencies, revenue recognition, depreciation accounting, construction contracts, research and development, and accounting for changes in policies. It also provides examples of how some large Indian companies apply the standards in their financial reporting and accounting policies.
This document outlines various International Accounting Standards that have been superseded or replaced over time. It provides brief descriptions of the topics covered in each standard, such as the presentation of financial statements, accounting for inventories, consolidated financial statements, segment reporting, property plant and equipment, leases, and revenue recognition. Many of the standards have been replaced or superseded by newer IAS issued on the same subject matter.
A presentation about the Cash Flow Statement ,whole chapter is covered in the slides .one can easily understand the concept of cash flow statement
and a video is also there but link went missing so please search it on youtube by the name of "cash flow statement in 3-min" a beautiful video to understand the basic concept of cash flow statement.In the end a numerical has solved for the better understanding ,which let u fetch marks in your examinations.
IFRS vs FASB,GAAP, IAS1,comprehensive income,extraordinary items,IAS2,inventory cost,IAS39,hedging gain or loss,Macro hedging,derivatives,help to maturity, jose cintron, mba4help.com, advance business consulting
Accounting Standard 1 discusses the disclosure of accounting policies. Accounting policies refer to the specific principles and methods used to prepare financial statements, such as the methods of depreciation, treatment of construction expenditures, currency conversion, and inventory valuation. Disclosing all significant accounting policies together is helpful for readers to understand and compare financial statements. Fundamental assumptions like going concern, consistency, and accrual must be followed. Selection of policies should exhibit a true and fair view while considering prudence, substance over form, and materiality. Changes in policies are allowed if required by statute, compliance with standards, or to provide a more appropriate presentation.
Verification and valuation of assets and liabilitiesAtta Hussain Syed
The document discusses the verification and valuation of various assets and liabilities. It defines verification as examining the existence and ownership of assets, while valuation determines their current worth. Some key points:
- Current assets include cash, debtors, prepaid expenses and stock. Fixed assets include land, buildings, plant and equipment. Intangible assets lack physical existence but can be realized, like goodwill.
- Verification includes examining documents like deeds and agreements to validate ownership and values. Valuation methods consider depreciation, market values, and accounting standards.
- Contingent assets and liabilities may arise in future and are disclosed in footnotes rather than accounted for. Events after the balance sheet may require
The document discusses various methods used to assess working capital requirements for providing bank finance, including:
1. The traditional method, which calculates the working capital required for individual components like raw materials, work in progress, receivables, etc. based on their holding periods.
2. The projected balance sheet method, which validates the current assets and liabilities projected in the balance sheet to determine the bank finance required.
3. The operating cycle method measures the working capital needs based on the time required to convert raw materials into finished goods and then into receivables through sales.
This document discusses working capital management. It defines working capital as the capital required for financing short-term assets like cash, debtors, and inventory. Maintaining adequate working capital is important for business solvency and efficiency. There are two concepts of working capital - gross working capital refers to total current assets, while net working capital is current assets minus current liabilities and measures liquidity. Factors like the operating cycle, credit terms, and expenses must be considered to estimate working capital requirements.
This document provides an overview of Ind AS 38 on Intangible Assets. It discusses the objective and scope, key definitions, recognition and measurement criteria, disclosure requirements, and differences between Ind AS 38 and the previous Accounting Standard AS 26. Some of the key points covered include defining an intangible asset, the criteria for recognition of intangible assets, measurement at cost or revaluation model, amortization periods, impairment testing, and additional disclosures required under Ind AS 38.
This presentation introduces International Financial Reporting Standard 2 (IFRS-2) which provides guidance on accounting for share-based payment transactions. IFRS-2 requires companies to recognize share-based payments as an expense in their financial statements and measure them at the fair value of the goods or services received. It sets out measurement principles for equity-settled, cash-settled, and cash alternative share-based payment transactions. IFRS-2 also prescribes disclosure requirements to help users understand the nature, timing, and extent of share-based payment arrangements.
The document discusses key concepts related to financial reporting including:
1) Financial reporting provides formal records of a company's financial activities primarily for external users like shareholders and internal users like management. Annual reports contain key documents like directors reports and financial statements.
2) There are various forms of business organization but joint stock companies have features like limited liability, transferable shares, and elected management through directors.
3) The objective of financial reporting is to provide useful information to investors and creditors to make decisions about providing resources to an entity. Reports are limited and users need other sources of information as well.
the ppt is about the Journal entries made to record issue of debenture under companies act 1956. It covers issue of debenture as per different situations. Hope you people find it helpful. you are welcome for any query.
The document discusses Accounting Standards in India. It provides details on:
1. Accounting Standards were first issued in India by ICAI in 1977 to standardize accounting policies and make financial statements more reliable and comparable.
2. There are currently 32 Accounting Standards in India based on International Accounting Standards. Other countries have adopted 41 International Financial Reporting Standards.
3. Key Accounting Standards cover topics like disclosure of accounting policies, valuation of inventories, cash flow statements, events after balance sheet date, components of profit and loss, depreciation methods, construction contracts, research and development costs, revenue recognition, and fixed assets.
This document provides a financial analysis of Saudi Telecom Corporation (STC) and a comparison with its competitor Mobily. It includes a SWOT analysis, industry analysis using Porter's Five Forces, and an analysis of key financial ratios for STC. It also discusses sources of internal and external finance available to STC, budgeting, and concludes with recommendations for performance enhancement. Financial data for STC such as net revenue, net income, cash flow, market capitalization, and dividend yield are presented alongside the same metrics for Mobily to facilitate comparison between the two companies.
Vertical common size balance sheets are presented for HDFC Mutual Fund for the financial years 2011 and 2012. Key points include:
1) Share capital increased slightly while reserves decreased from 2011 to 2012.
2) Investments decreased as a percentage of total funds from 97% to 95.15% over the period.
3) Current assets increased from 3.99% to 5.50% of total funds while current liabilities also increased slightly.
The vertical common size balance sheets allow comparison of line items as a percentage of total funds employed for the two periods.
The document discusses the purpose and analysis of funds flow statements. It explains that a funds flow statement measures changes in a firm's financial position between two balance sheet dates by analyzing sources and uses of funds. Sources typically include profits, debt increases, and asset sales, while uses typically include asset purchases, debt repayments, dividends, and working capital increases. The document then provides details on calculating sources and uses of funds, and constructing a funds flow statement.
This document outlines Accounting Standard 26 regarding the accounting treatment for intangible assets in India. Key points include:
- The standard defines intangible assets and provides examples such as goodwill, research and development expenses, patents, and copyrights.
- Intangible assets must meet certain recognition criteria to be recorded, including being identifiable, lacking physical substance, and providing future economic benefits.
- Internally generated intangible assets are classified as research or development phases, with development costs capitalized if certain conditions are met.
- Intangible assets are initially measured at cost and amortized over their estimated useful lives not to exceed 10 years, generally using the straight-line method.
Accounting standards with reference to Genting Lanco Power (India) Pvt.Ltd. kimi7792
The document discusses accounting standards in India issued by the Institute of Chartered Accountants of India (ICAI). It provides details on three key standards - AS 1 on disclosure of accounting policies, AS 2 on valuation of inventories, and AS 10 on accounting for fixed assets. For each standard, it outlines the objectives, relevant definitions, valuation methods, disclosure requirements, and other guidelines specified in the standards. It also includes an example balance sheet from Genting Lanco Power (India) Pvt. Ltd. as of March 31, 2014.
Conversion Ind AS (the converged IFRS standards) in India Dr Biswadev Dash
02/01/2015 when the Press Information Bureau, Government of India, Ministry of Corporate Affairs (MCA) issued a note outlining the various phases in which Indian Accounting Standards converged with IFRS (Ind AS) is proposed to be implemented in India it was a landmark reforms in accounting & reporting sector. With this the Companies other than Banking Companies, Insurance Companies and NBFCs will be covered. Indian Accounting standard is highly precise. Thus Conversion Ind AS (the converged IFRS standards) in India may significantly affect a company’s day-to-day operations and may even impact the reported profitability of the business itself. Of course Conversion brings a one-time opportunity to comprehensively streamline the financial reporting.
This document discusses Indian Accounting Standard 3 on cash flow statements. It defines key terms like cash, cash equivalents, operating activities, investing activities and financing activities. It explains the direct and indirect methods of preparing cash flow statements and requirements around classification of cash flows from various transactions like tax, foreign exchange, dividends and interest. The standard aims to provide useful information on changes in cash balances to investors and other stakeholders.
Cash Flow Statement is a basic concept which every young manager must learn. This presentation excellently explains what you should know about this topic!
How to manage for preparation of md&a disclosuresHamdy Rashed
The disclosures in Corporate Governance Report, Sustainability Report and Management Discussion & Analysis (MD&A) Report are more common requirement of many stock exchange markets requirements of other organization. However, IFRS requires many disclosures but financial standards do not cover all information. Therefore, Stock Exchange market and other organizations require additional and more concise information that should be disclosed on frequently basis to provide the readers of annual report more adequate and comprehensive view of Companies.
Keywords: Management Discussion & Analysis Report, MD&A, Corporate Governance, Sustainability, Corporate Social Responsibility, listing Companies.
This document summarizes Accounting Standards 1-15 presented by Dr. Rana Singh. It discusses the key aspects of each standard including disclosure of accounting policies, valuation of inventories, cash flow reporting, contingencies, revenue recognition, depreciation accounting, construction contracts, research and development, and accounting for changes in policies. It also provides examples of how some large Indian companies apply the standards in their financial reporting and accounting policies.
This document outlines various International Accounting Standards that have been superseded or replaced over time. It provides brief descriptions of the topics covered in each standard, such as the presentation of financial statements, accounting for inventories, consolidated financial statements, segment reporting, property plant and equipment, leases, and revenue recognition. Many of the standards have been replaced or superseded by newer IAS issued on the same subject matter.
A presentation about the Cash Flow Statement ,whole chapter is covered in the slides .one can easily understand the concept of cash flow statement
and a video is also there but link went missing so please search it on youtube by the name of "cash flow statement in 3-min" a beautiful video to understand the basic concept of cash flow statement.In the end a numerical has solved for the better understanding ,which let u fetch marks in your examinations.
IFRS vs FASB,GAAP, IAS1,comprehensive income,extraordinary items,IAS2,inventory cost,IAS39,hedging gain or loss,Macro hedging,derivatives,help to maturity, jose cintron, mba4help.com, advance business consulting
Accounting Standard 1 discusses the disclosure of accounting policies. Accounting policies refer to the specific principles and methods used to prepare financial statements, such as the methods of depreciation, treatment of construction expenditures, currency conversion, and inventory valuation. Disclosing all significant accounting policies together is helpful for readers to understand and compare financial statements. Fundamental assumptions like going concern, consistency, and accrual must be followed. Selection of policies should exhibit a true and fair view while considering prudence, substance over form, and materiality. Changes in policies are allowed if required by statute, compliance with standards, or to provide a more appropriate presentation.
Verification and valuation of assets and liabilitiesAtta Hussain Syed
The document discusses the verification and valuation of various assets and liabilities. It defines verification as examining the existence and ownership of assets, while valuation determines their current worth. Some key points:
- Current assets include cash, debtors, prepaid expenses and stock. Fixed assets include land, buildings, plant and equipment. Intangible assets lack physical existence but can be realized, like goodwill.
- Verification includes examining documents like deeds and agreements to validate ownership and values. Valuation methods consider depreciation, market values, and accounting standards.
- Contingent assets and liabilities may arise in future and are disclosed in footnotes rather than accounted for. Events after the balance sheet may require
The document discusses various methods used to assess working capital requirements for providing bank finance, including:
1. The traditional method, which calculates the working capital required for individual components like raw materials, work in progress, receivables, etc. based on their holding periods.
2. The projected balance sheet method, which validates the current assets and liabilities projected in the balance sheet to determine the bank finance required.
3. The operating cycle method measures the working capital needs based on the time required to convert raw materials into finished goods and then into receivables through sales.
This document discusses working capital management. It defines working capital as the capital required for financing short-term assets like cash, debtors, and inventory. Maintaining adequate working capital is important for business solvency and efficiency. There are two concepts of working capital - gross working capital refers to total current assets, while net working capital is current assets minus current liabilities and measures liquidity. Factors like the operating cycle, credit terms, and expenses must be considered to estimate working capital requirements.
This document provides an overview of Ind AS 38 on Intangible Assets. It discusses the objective and scope, key definitions, recognition and measurement criteria, disclosure requirements, and differences between Ind AS 38 and the previous Accounting Standard AS 26. Some of the key points covered include defining an intangible asset, the criteria for recognition of intangible assets, measurement at cost or revaluation model, amortization periods, impairment testing, and additional disclosures required under Ind AS 38.
This presentation introduces International Financial Reporting Standard 2 (IFRS-2) which provides guidance on accounting for share-based payment transactions. IFRS-2 requires companies to recognize share-based payments as an expense in their financial statements and measure them at the fair value of the goods or services received. It sets out measurement principles for equity-settled, cash-settled, and cash alternative share-based payment transactions. IFRS-2 also prescribes disclosure requirements to help users understand the nature, timing, and extent of share-based payment arrangements.
The document discusses key concepts related to financial reporting including:
1) Financial reporting provides formal records of a company's financial activities primarily for external users like shareholders and internal users like management. Annual reports contain key documents like directors reports and financial statements.
2) There are various forms of business organization but joint stock companies have features like limited liability, transferable shares, and elected management through directors.
3) The objective of financial reporting is to provide useful information to investors and creditors to make decisions about providing resources to an entity. Reports are limited and users need other sources of information as well.
the ppt is about the Journal entries made to record issue of debenture under companies act 1956. It covers issue of debenture as per different situations. Hope you people find it helpful. you are welcome for any query.
The document discusses Accounting Standards in India. It provides details on:
1. Accounting Standards were first issued in India by ICAI in 1977 to standardize accounting policies and make financial statements more reliable and comparable.
2. There are currently 32 Accounting Standards in India based on International Accounting Standards. Other countries have adopted 41 International Financial Reporting Standards.
3. Key Accounting Standards cover topics like disclosure of accounting policies, valuation of inventories, cash flow statements, events after balance sheet date, components of profit and loss, depreciation methods, construction contracts, research and development costs, revenue recognition, and fixed assets.
This document provides a financial analysis of Saudi Telecom Corporation (STC) and a comparison with its competitor Mobily. It includes a SWOT analysis, industry analysis using Porter's Five Forces, and an analysis of key financial ratios for STC. It also discusses sources of internal and external finance available to STC, budgeting, and concludes with recommendations for performance enhancement. Financial data for STC such as net revenue, net income, cash flow, market capitalization, and dividend yield are presented alongside the same metrics for Mobily to facilitate comparison between the two companies.
Vertical common size balance sheets are presented for HDFC Mutual Fund for the financial years 2011 and 2012. Key points include:
1) Share capital increased slightly while reserves decreased from 2011 to 2012.
2) Investments decreased as a percentage of total funds from 97% to 95.15% over the period.
3) Current assets increased from 3.99% to 5.50% of total funds while current liabilities also increased slightly.
The vertical common size balance sheets allow comparison of line items as a percentage of total funds employed for the two periods.
The document discusses the purpose and analysis of funds flow statements. It explains that a funds flow statement measures changes in a firm's financial position between two balance sheet dates by analyzing sources and uses of funds. Sources typically include profits, debt increases, and asset sales, while uses typically include asset purchases, debt repayments, dividends, and working capital increases. The document then provides details on calculating sources and uses of funds, and constructing a funds flow statement.
This document outlines Accounting Standard 26 regarding the accounting treatment for intangible assets in India. Key points include:
- The standard defines intangible assets and provides examples such as goodwill, research and development expenses, patents, and copyrights.
- Intangible assets must meet certain recognition criteria to be recorded, including being identifiable, lacking physical substance, and providing future economic benefits.
- Internally generated intangible assets are classified as research or development phases, with development costs capitalized if certain conditions are met.
- Intangible assets are initially measured at cost and amortized over their estimated useful lives not to exceed 10 years, generally using the straight-line method.
Accounting standards with reference to Genting Lanco Power (India) Pvt.Ltd. kimi7792
The document discusses accounting standards in India issued by the Institute of Chartered Accountants of India (ICAI). It provides details on three key standards - AS 1 on disclosure of accounting policies, AS 2 on valuation of inventories, and AS 10 on accounting for fixed assets. For each standard, it outlines the objectives, relevant definitions, valuation methods, disclosure requirements, and other guidelines specified in the standards. It also includes an example balance sheet from Genting Lanco Power (India) Pvt. Ltd. as of March 31, 2014.
Conversion Ind AS (the converged IFRS standards) in India Dr Biswadev Dash
02/01/2015 when the Press Information Bureau, Government of India, Ministry of Corporate Affairs (MCA) issued a note outlining the various phases in which Indian Accounting Standards converged with IFRS (Ind AS) is proposed to be implemented in India it was a landmark reforms in accounting & reporting sector. With this the Companies other than Banking Companies, Insurance Companies and NBFCs will be covered. Indian Accounting standard is highly precise. Thus Conversion Ind AS (the converged IFRS standards) in India may significantly affect a company’s day-to-day operations and may even impact the reported profitability of the business itself. Of course Conversion brings a one-time opportunity to comprehensively streamline the financial reporting.
This document provides information on applicable Indian accounting standards for different levels of enterprises and lists the various Indian Accounting Standards (AS) and International Accounting Standards (IAS). It discusses in detail AS 1 on disclosure of accounting policies, AS 2 on valuation of inventories, AS 5 on net profit/loss, prior period items and changes in accounting policies, AS 6 on depreciation, AS 9 on revenue recognition, and AS 26 on intangible assets. The key highlights include definitions, recognition and measurement principles, and disclosure requirements for these standards.
The document discusses Indian Accounting Standards (IAS) and their objectives. It notes that IAS are issued by the Institute of Chartered Accountants of India (ICAI) to standardize accounting policies and practices. This helps eliminate non-comparability between financial statements and ensures their reliability. Currently there are 31 IAS issued by ICAI. The document provides a brief overview of some of the key IAS such as those relating to cash flow statements, revenue recognition, fixed assets, taxes on income, and consolidated financial statements. It explains that compliance with IAS issued by ICAI is mandatory for companies in India.
1. The document discusses accounting standards for different types of enterprises in India and provides details on the classification of enterprises as Level I, Level II, or Level III based on certain criteria like securities listing, turnover, borrowings, etc.
2. It also provides summaries of various Indian accounting standards including the number of paragraphs they contain, the types of enterprises they are applicable to, and brief highlights of the background and key points of each standard.
3. Accounting standards covered include those related to disclosure of accounting policies, valuation of inventories, cash flow statements, contingencies/events after balance sheet date, extraordinary/prior period items, depreciation, and construction contracts.
Milestone One Guidelines and Rubric For this project, cons.docxARIV4
Milestone One Guidelines and Rubric
For this project, consider this scenario: you have worked very hard and have just earned a promotion at Quality CPA firm. As part of your new responsibilities, you will be advising an influential client on their international aspirations. Their business has been booming and they are seriously considering expanding their operation overseas. They are concerned about the political and financial risks of such an undertaking.
You will build a multimedia presentation (utilizing audio, if possible, with speaker notes to elaborate) that addresses the upper management of this company. You will choose a country other than the United States. This country will be presented as a potential destination for the company, although other countries can be included, as the global market is the focus. The presentation must explore the company’s potential expansion into the chosen country, the global market in general, and how that will impact their operations.
Specifically, the following critical elements must be addressed:
I. Global Business: For this part of the assessment, convey to your audience the differences between accounting practices around the world.
A. Explain the influence of environmental issues of diversity on accounting practices.
B. Evaluate the impact of the chosen country’s culture on their financial accounting standards.
1. What accounting principles could help inform your response (i.e., Hofstede’s dimension of culture, Gray’s accounting values, etc.)?
C. Evaluate the impact of potential issues on business operations that may arise when conducting accounting business in the chosen country.
Rubric Guidelines for Submission: Your multimedia presentation should include 10–15 slides, which must be accompanied by speaker notes and may contain audio if you wish.
Critical Elements
Exemplary (100%)
Proficient (90%)
Needs Improvement (70%)
Not Evident (0%)
Value
Global Business: Diversity
Meets “Proficient” criteria and demonstrates a nuanced understanding of the underlying issues in the environmental factors
Explains the influence of environmental issues of diversity on accounting practices
Explains the influence of environmental issues of diversity on accounting practices but explanation lacks depth or detail
Does not explain the influence of environmental issues of diversity on accounting practices
30
Global Business: Culture
Meets “Proficient” criteria and supports evaluation with accounting principles
Evaluates the impact of culture of the chosen country on financial accounting standards around the world
Evaluates the impact of culture of the chosen country on financial accounting standards around the world but evaluation is cursory
Does not evaluate the impact of culture of the chosen country on financial accounting standards around the world
30
Global Business: Potential Issues
Meets “Proficient” criteria and provides keen insight into the potential issues that may ari ...
The Companies Act 2013 has introduced the concept of ‘Registered Valuer’ through Section 247 Chapter XVII to cover valuation of any property, stock, shares, debentures, securities, goodwill or any other assets of the company as well as its net worth and liabilities.
Valuation team of Corporate Professionals here presents the summarized presentation on Registered Valuer.
The document discusses accounting standards and the disclosure of accounting policies. It states that accounting standards aim to harmonize diverse accounting policies to make financial reporting more useful and effective. It also notes that disclosure of accounting policies is important to ensure a proper understanding of financial statements and facilitate meaningful comparison. The disclosure should form part of the financial statements and explain all significant policies, including any changes, at one place.
Here are the answers to the objective type questions on corporate accounting:
1. Payment of dividend.
2. Redemption of Preference shares.
3. Dividend is not payable on the calls paid in advance by a shareholder.
4. Share premium Account appears on the liability side of the balance sheet.
5. Amount called by the company and paid for is forfeited.
6. Capital Reserve.
7. Called up amount.
8. Writing-off Preliminary expense.
9. A company can redeem only fully paid preference share.
10. Issue fully paid bonus shares.
11. At a pre-determined fixed rate.
12. Premium on issue of
This document provides a summary of accounting standards AS 1-4 in India. It discusses the key points of each standard:
- AS 1 relates to disclosure of accounting policies and ensuring financial statements provide full financial information.
- AS 2 provides guidelines for calculating inventory values using methods like FIFO, LIFO, and weighted average. Inventory cost includes material, labor and expenses.
- AS 3 revised in 1997 requires a cash flow statement for large companies. It explains direct and indirect methods for preparing the statement.
- AS 4 covers accounting treatment for contingencies, losses and events after the balance sheet date but before approval. It includes impairment losses of assets.
Topic 1 – Part 2 The Accounting Areas And Professional Bodiesmandalina landy
The accounting concepts/conventions/principles applied are:
- Entity concept - Accounts are prepared separately for Farhan's small business and not combined with his personal affairs.
- Going concern concept - The accounts are prepared on the assumption that the business will continue operating in the foreseeable future.
- Accrual basis of accounting - Revenues and expenses are recognized in the period earned/incurred rather than when cash is received/paid out.
- Matching principle - Expenses are matched against the revenues of the period to determine the profit of RM25,000 for the period.
Topic 1 – Part 2 The Accounting Areas And Professional Bodiesguest441011
The accounting concepts/conventions/principles applied are:
- Entity concept - Accounts are prepared for Farhan's small business separately from his personal affairs.
- Going concern concept - The accounts are prepared on the assumption that the business will continue to operate in the foreseeable future.
- Accrual basis of accounting - Revenues and expenses are recognized in the period earned/incurred rather than when cash is received/paid out.
b. The company recorded its land at cost of RM500,000 in 2010. In 2015, the market value of the land increased to RM800,000 but the company did not revalue the land in its books.
The document discusses Income Computation and Disclosure Standards (ICDS) which were notified by the Central Government to bring uniformity in accounting methods for computing income under the Income Tax Act 1961. It provides details on the 10 ICDS standards covering aspects like accounting policies, valuation of inventory, construction contracts, revenue recognition, fixed assets, foreign exchange rates, government grants, securities, borrowing costs and provisions, contingencies and events occurring after the balance sheet date. The objective is to harmonize computation of income as per books of accounts with provisions of the Income Tax Act.
Ias 16 property plant and equipment-presentationShadabAhmadFaiq
The document discusses the key aspects of IAS 16 Property, Plant and Equipment including:
- The objective is to prescribe the accounting treatment for property, plant and equipment.
- Scope outlines what is excluded like IFRS 5 and IAS 40.
- Definitions for terms like PPE, carrying amount, depreciation.
- Recognition criteria that future benefits are probable and cost can be reliably measured.
- Measurement includes initial cost and subsequent cost model or revaluation model.
- Depreciation is systematically allocated over useful life.
- Impairment is assessed using IAS 36.
- Derecognition occurs from disposal or no future benefits are expected.
This presentation provides an overview of accounting principles and standards. It defines accounting as identifying, measuring, and communicating financial information to allow for informed decisions. Accounting standards provide common principles, procedures, and policies to improve transparency. Specific standards cover revenue recognition, asset valuation, cash flow reporting, inventory costs, leases, taxes, intangible assets, and more. The accounting standards board of India issues standards following ICAI principles with input from advisory committees.
Knowledge level icab class lectures
Knowledge level icab class lectures
Knowledge level icab class lectures
Knowledge level icab class lectures
Knowledge level icab class lectures
Accounting system intro and accounting system of reliance industriesShashank Kapoor
Accounting provides essential financial information to a company in 3 key ways:
1. It allows a company to systematically record, report, and analyze its financial transactions through the accounting process.
2. An accountant oversees the accounting process and ensures compliance with accounting principles and regulations.
3. By analyzing accounting data, a company can evaluate its financial performance through metrics like net profit and make informed business decisions.
Accounting is a systematic process of recording, analyzing and summarizing transactions of an entity.
* The transactions are recorded in the books of original entry
* The transactions are then analyzed and posted in the Ledgers
Finally, the transactions are summarized in the Financial Statements
This document provides an overview of International Financial Reporting Standards (IFRS). It defines IFRS and discusses their meaning and relevance in India. It outlines the objectives and benefits of IFRS, as well as some of the challenges in implementing them, such as differences from Indian GAAP and the costs of transitioning accounting systems. The document also lists the individual IFRS standards issued by the IASB and discusses the process for setting IFRS.
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Examination reforms are essential to transform the education system according to the document. The current examination system focuses only on rote memorization but needs to evaluate creativity and problem-solving. The document outlines steps to reform examinations including setting goals based on program and course objectives, evaluating whether objectives are achieved through direct and indirect methods, using continuous evaluations, and adopting open book exams and multiple evaluation methods.
1. ACCOUNTING ISSUES FOR ENTREPRENEURS by : DR. T.K. JAIN AFTERSCHO ☺ OL centre for social entrepreneurship sivakamu veterinary hospital road bikaner 334001 rajasthan, india FOR – PGPSE / CSE PARTICIPANTS mobile : 91+9414430763
2. My words.... Ours is a great country with immense entrepreneurial potential. However, our legal system and taxation system is so cumbersome that our creativity and talent is wasted / unnecessarily diverted in these sectors. I wish that these are simplified so that an ordinary entrepreneur can understand these without help from any expert. Here I present a few basic questions for fundamental understanding of Accounting I wish that more people should become entrepreneurs. An ordinary Indian entrepreneur wishes to remain an honest entrepreneur and contribute to the development of nation, but our systems and processes ...
3. Is debenture redemption fund compulsory for a company ? Yes According to SEBI guidelines, creation of debenture redemption reserve equivalent to 50% of the debenture issue is obligatory. However, a company may create more reserve if it so desire
4. Where would you show discount on issue of debenture in balance sheet? Discount on issue of debentures is a capital loss of the company and it is required to be shown on the assets side of the Balance Sheet under the heading “Miscellaneous Expenditure” until it is written off
5. What is ex-interest quote of a debenture? If the purchase price for the debentures excludes the interest for the expired period, the quotation is said to be “Ex-interest”.
6. Where would you show preliminary expenses in balance sheet ? preliminary expenses are of capital nature and as such should be shown on the assets side of the Balance Sheet under the heading “Miscellaneous Expenditure”.
7. How can preliminary expenditure be written off ? Preliminary expenses being of capital nature, may be written off against capital profits or may be written off over 10 years period
8. What are the parts of preliminary expenses ? Stamp duty legal charges for preparing the Prospectus, Memorandum and Articles Accountants’ and Valuers’ fees for reports Cost of printing the Memorandum and Articles company’s seal and books of account, statutory books printing and stamping Debenture Trust Deed
9. What are not the parts of preliminary expenses ? Cost of preparation of the feasibility report. Cost of preparation of the project report. Cost of market survey Consultancy fees
10. What can be used for issue of bonus shares ? Balance in the Profit and Loss Account; General Reserves or other Reserves created out of the profits; Realised capital profits and reserves; Securities Premium Account; Capital Redemption Reserve Account
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12. What are the uses of accounting standards ? in the resolution of potential financial conflicts of interest between the various important groups
13. What are the objectives of accounting standards board? To conceive of and suggest areas in which Accounting Standards need to be developed. To formulate Accounting Standards with a view to assisting the Council of the ICAI in evolving and establishing Accounting Standards in India. To study the relevance of International Accounting Standards
14. What is the composition of accounting standards board ? Representatives of : Ministry of Corporate Affairs, Comptroller and Auditor General ,Central Board of Direct Taxes , RBI,ICWAI,ICSI,SEBI,IIMs, UNIVERSITIES, Central Board of Excise and Customs.,Industry associations, financial institutions etc.
15. What are the contents of draft of an accounting standard issued by ASB for approval ? 1. Objective of the Standard, 2. Scope of the Standard, 3. Definitions of the terms used in the Standard, 4. Recognition and measurement principles, wherever applicable, 5. Presentation and disclosure requirements.
16. To whom will ASB circulate draft of accounting standard for approval ? SEBI,RBI,SCOPE,IBA,ASSOCHAM,CAG,FICCI,ICSI,ICWAI,etc.
17. WHAT IS AS 1? All significant accounting policies adopted in the preparation and presentation of financial statements should be disclosed
18. For which type of policies /assumption, no disclosure is required ? If the fundamental accounting assumptions, viz. going concern, consistency and accrual are followed in financial statements, specific disclosure is not required.s But if a fundamental accounting assumption is not followed, the fact should be disclosed.
19. Is it necessary to disclose all the changes in accounting policies ? Yes Any change in the accounting policies which has a material effect in the current period or which is reasonably expected to have a material effect in later periods should be disclosed. In the case of a change in accounting policies which has a material effect in the current period, the amount by which any item in the financial statements is affected by such change should also be disclosed to the extent ascertainable. Where such amount is not ascertainable, wholly or in part, the fact should be indicated.
20. While taking cost or market price (lower), what is excluded from cost as per AS 2? (i) abnormal amounts of wasted materials, labour or other production costs; (ii) storage costs; (iii) administrative overheads that do not contribute to bringing the inventories to their present location and condition and (iv) selling and distribution costs.
21. What are the acceptable methods for cost calculations as per AS2? (i) Specific identification cost (ii) First-In-First Out and (iii) Weighted average cost.
22. What method of valuation should be used for valuing inventories that are damaged or that have become wholly or partially obsolete or selling price has declined Net realisable value or the replacement cost of materials (if it is known that finished goods will be higher in value than net realisable value)
23. As per AS 2, inventory has to be classified and inventory valuation formula must be shown. What are the methods for classification? raw materials and components, work-in-progress, finished goods, stores and spares loose tools.
24. How should a company report foreign exchange transactions as per AS 3? Cash flows arising from transactions in a foreign currency should be recorded in an enterprise’s reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and foreign currency at the date of the cash flow
25. When can a company change depreciation policy ? As per AS 6 : A change in one method of providing depreciation to another method should be made only if the adoption of the new method is required by statute or for compliance with the accounting standard or if it is considered that the change would result in a more appropriate preparation or presentation of financial statements
26. What should be shown in the balance sheet regarding depreciation ? (i) historical cost or other amount substituted for historical cost of each class of depreciable asset; (ii) total depreciation for the period for each class of assets; (iii) the related accumulated depreciation; (iv) depreciation methods used; and (v) depreciable rates & useful life (if rate are different from schedule 14)
27. What are methods to recognise revenue of contract ? 1. the proportion that contract costs incurred for work performed upto the reporting date bear to the estimated total contract costs; or 2. surveys of work performed; or 3. completion of a physical proportion of the contract work.
28. What should be done about expected losses in a contract ? AS 7 : When it is probable that total contract cost will exceed total contract revenue, the expected loss should be recognised as an expense immediately.
29. In construction contracts, what should be disclosed ? 1. the amount of contract revenue recognised as revenue in the period; 2. the methods used to determine the contract revenue recognised in the period; and 3. the methods used to determine the stage of completion of contracts in progress.
30. When should sale be recognised ? AS 9 : WHEN : (i) the property in goods is transferred from seller to buyer AND (ii) there is no uncertainty regarding the amount of consideration
31. How shold self constructed assets be shown ? only direct costs are included in the cost of the asset. Exclude administrative and other overheads
32. When can we show goodwill ? Goodwill should be recorded only when some consideration has been paid for it. (AS 10)
33. How should assets acquired on hire puchase be shown ? Fixed assets acquired on hire-purchase should be disclosed only at net cash value stating the fact of hire purchase.
34. What should be done with the benefit arising from revaluation of fixed assets ? An increase in net book value arising on revaluation of fixed assets should be credited directly to owner’s interest under revaluation reserve and should not be used for any purpose except to write off decrease in value of assets.
35. What details should be given about revaluation of assets (AS 10)? revalued assets (asset class – when revalution is done, it should be for entire class) should include revalued amount substituted for historical cost of fixed assets, the method adopted to compute the revalued amounts, the nature of indices used, the year of any appraisal made and whether an external valuer was involved etc.
36. What should be the method of valuation of assets in foreign exchange ? foreign currency monetary items should be reported using the closing rate. non-monetary items which are carried in terms of historical cost denominated in a foreign currency should be reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency should be reported using the exchange rates that existed when the values were determined
37. What is difference between integral and non-integral operations for forex transactions? A foreign operation that is integral to the operations of the reporting enterprise carries on its business as if it were an extension of the reporting enterprise’s operations. In contrast, a non-integral foreign operation accumulates cash and other monetary items, incurs expenses, generates income and perhaps arranges borrowings, all substantially in its local currency.
38. What are the 2 methods of showing government grants ? ‘capital approach’ under which a grant is treated as part of the shareholders’ funds ‘income approach’ under which a grant is taken to income over one or more periods
39. As per AS 13, how should we value an investment, if it is acquired in exchange for another asset? If an investment is acquired in exchange for another asset, the acquisition cost of the investment should be determined by reference to the fair value of asset given up.
40. Should we recognise long term investments at cost or market price ? No Investments classified as current investments should be stated at lower of cost and fair value while long-term investments be stated at cost with provision for diminution to recognise a decline.
41. What is differnce between amalgamation as merger and as purchase ? Merger : there is a pooling not merely of assets and liabilities of the amalgamating companies but also of the shareholders’ interests and of the business of these companies. Purchasse : one company acquires another company and as a consequence, the shareholders of the company which is acquired, normally do not continue to have proportionate share in the equity of the combined company. Also the business of the company which is acquired is not intended to be continued.
42. What is the difference between purchase and merger ? Purchase : The reserves whether capital or revenue or arising on revaluation of the transferor company other than the statutory reserves, should not be included in the financial statements of the transferee company. Merger : - reserves should be recorded at their existing carrying amounts and in the same form as at the date of the amalgamation.
43. What are rules regarding capitalisation of borrowing cost as per AS 16? Capitalisation of borrowing cost can be done : 1. expenditure for the acquisition, construction or production of a qualifying asset is being incurred; 2. borrowing costs are being incurred; 3. activities that are necessary to prepare the asset for its intended use or sale are in progress (it is not complete). It should be shown in final accounts.
44. When can we identify a unit as a segment (AS 17) ? (a) its revenue from sales to external customers and from transactions with other segment is 10 per cent or more of the total revenue, external and internal of all segments; or (b) its segment result, whether profit or loss is 10 per cent or more of (i) the combined result of all segments in profits or (ii) the combined results of all segments in loss which is greater in absolute amount; or (c) its segment assets are 10 per cent or more of the total assets of all segments.
45. Who are related parties as per AS 18? (b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture; (c) individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control (d) key management personnel and relatives of such personnel and (e) enterprises over which any person described is able to exercise significant influence.
46. What should be disclosed ass per AS 18? 1. the name of the transacting related party; 2. a description of the relationship between the parties; 3. description of the nature of the transactions; 4. volume of transactions 5. any other relevant information 6. the amounts or appropriate propositions of outstanding items pertaining to related parties at the balance sheet date and provision for doubtful debts due from such parties at that date; and 7. the amounts written off or written back in the period in respect of debts due from or to related parties. Items of a similar nature may be disclosed in aggregate by type of related party.
47. How to depreciate assets in finance lease ? a finance lease gives rise to a depreciation expense for the asset as well as finance expense for each accounting period. If there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term, the asset should be fully depreciated over the lease term or its useful life whichever is shorter. The assets have to be shown at value / present value of all lease payments (whichever is lower)
48. Who should show assets in balance sheet in lease ? In finance lease = lessee in operating lease = lessor (accordingly depreciation will apply, read AS 19 for details )
49. How should revenue be shown in lease ? Finance lease = fixed % on invesment operating lease = straight line basis method
50. What happens Sale and lease back transaction changes in finance or operating lease ? Finance lease = recognise income over the term of lease operating lease = recognise it immediately
51. How should basic EPS be calculated ? By dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
52. When is diluted EPS calculated ? Diluted earnings per share is calculated when there are potential equity shares in the capital structure of the enterprise.
53. What is potential capital ? Potential equity share are those financial instruments which entitle the holder to the right of equity shares like convertible debentures, convertible preference shares, options warrants etc.
54. What should every company show about calculation of EPS in its financial statements (as per AS 20)? 1. The amounts used as the numerators in calculating basic and diluted earnings per share, and a reconciliation of those amounts to the net profit or loss for the period; 2. The weighted average number of equity shares used as the denominator in calculating basic and diluted earnings per share, and a reconciliation of these denominators to each other; and 3. The nominal value of shares along with the earnings per share figures.
55. As per AS 21, should a company prepare both separate and consolidated accounts ? Yes A parent which presents consolidated financial statements should present these statements in addition to its separate financial statements.
56. What are the cases when consolidation is not necessary ? 1. its control is intended to be temporary because the subsidiary is acquired and held exclusively with a view to its subsequent disposal in the near future; or 2. it operates under severe long-term restrictions which significantly impair its ability to transfer funds to the parent. (read AS 21)
57. How should consolidation take place ? 1. Eliminate the cost of the investment 2. The excess of the cost to the parent of its investment in a subsidiary over the equity of the subsidiary = ‘goodwill' if cost is less, the difference is ‘capital reserve’. 3. The majority interest in the net income of consolidated subsidiaries have to be identified and adjusted against the income of the group so as to arrive at the net income attributable to the owners of the parent. 4. minority interests in the net assets of consolidated subsidiaries has to be identified and presented separately from liabilities and equity of the parents’ shareholders. 5. Eliminate Intragroup balances and intragroup transactions and resulting unrealized profits
58. What are tax differences as per AS 22? The differences between taxable income and accounting income can be classified into permanent differences and timing differences. Permanent differences are those differences between taxable income and accounting income which originate in one period and do not reverse subsequently. Timing differences are those differences between taxable income and accounting income for a period that originate in one period and are capable of reversal in one or more subsequent periods. Timing differences arise because the period in which some items of revenue and expenses are included in taxable income do not coincide with the period in which such items of revenue and expenses are included or considered in arriving at accounting income.
59. Can permanent tax differences come in balance sheet ? No Permanent differences do not result in deferred tax assets or deferred tax liabilities. (but it is not so in the case of timing differences)
60. What is associate as per AS 23? An associate is an enterprise in which the investor has significant influence and which is neither a subsidiary nor a joint venture of the investor. (e.g. 20% or more shareholding)
61. Examples of associateships ? — Representation on the board of directors. — Participation in policy making processes; — Material transactions between the investor and the investee. — Interchange of managerial personnel. — Provision of essential technical information.
62. What is discontinuing operations as per AS 24? When a unit is relatively large component of an enterprise which is major line of business or geographical segment, this is distinguishable operationallys. In discontinuing operation, this unit of businessis is seprarated on the basis of an overall plan in one shot or in piecemeal. Discontinuance will be carried either through demerger or spin-off, piecemeal disposal of assets and settling of liabilities or by abandonment.
63. What must be shown in interim financial reports as per AS 25? Condensed balance sheet; Condensed statement of profit and loss; Condensed cash flow statement; and Selected explanatory notes Basic and diluted earnings per share as per AS-20.
64. What is intangible asset as per AS 26? “non-monetary asset, without physical substance, held for use in the production or supply of goods or services, for rental to others, or for administrative purposes.”
65. When should intangible asset be recognised ? it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and the cost of the asset can be measured reliably
66. When can an organisation recognise intangible asset ? the technical feasibility of completing the intangible asset so that it will be available for use or sale; its intention to complete the intangible asset and use or sell it; its ability to use or sell the intangible asset; how the intangible asset will generate probable future economic benefits. The company should show the usefulness of the intangible asset; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and its ability to measure the expenditure attributable to the intangible asset during its development reliably.
67. Can the method of amortisation be changed ? Yes If the expected useful life of the asset is significantly different from previous estimates, the amortisation period should be changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortisation method should be changed to reflect the changed pattern. Such changes should be accounted for in accordance with AS-5, Net Profit or Loss for the Period, Prior Period items and Changes in Accounting Policies.
68. What is impairment of intangible asset ? if its recoverable amount is less than the carrying amount
69. What is a joint venture as per AS 27? A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity, which is subject to joint control.
70. What are the assets where we cannot apply AS 28 regarding impairment of assets ? inventories; assets arising from construction contracts; financial assets; deferred tax assets.
71. What are the steps in impairment of an asset ? Collect information from external and internal sources about impairment of asset estimate the future cash inflows and outflows arising from continuing use of the asset and from its ultimate disposal; and apply the appropriate discount rate to these future cash flows change depreication rate / method (if required)
72. What is contingent liability as per AS 29? a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise; or a present obligation that arises from past events but is not recognised because: it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or a reliable estimate of the amount of the obligation cannot be made.
73. WHAT IS A PROVISION? A provision is a liability, which can be measured only by using a substantial degree of estimation.
74. When should provision be recognised as per AS 29? an enterprise has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.
75. Can a provision be used for a purpose other than the purpose intendend for ? No A provision should be used only for expenditures for which the provision was originally recognised. (read AS 29)
76. Can we make provision for future operating losses ? No Provisions should not be recognised for future operating losses. An expectation of future operating losses is an indication that certain assets of the operation may be impaired. An enterprise tests these assets for impairment under Accounting Standard (AS) 28, Impairment of Assets.
77. What should be shown as per AS 29 for contingent liabilities? an estimate of its financial effect; an indication of the uncertainties relating to any outflow; and the possibility of any reimbursement.
78. What are the types of hedges as per AS 30? (a) fair value hedge: a hedge of the exposure to changes in fair value of a asset or liability or an unrecognised firm commitment, that is attributable to a particular risk and could affect profit or loss. (b) cash flow hedge: a hedge of the exposure to variability in cash flows that (i) is attributable to a particular risk associated with a recognised asset or liability (such as all or some future interest payments on variable rate debt) or a highly probable forecast transaction and (ii) could affect profit or loss. (c) hedge of a net investment in a foreign operation as defined in AS 11.
79. How should a financial instrument be recognised ? A financial asset or financial liability at fair value through profit or loss should be measured at fair value on the date of acquisition or issue (AS 30)
80. What are the cases when fair value is not used to measure financial instruments ? loans and receivables held-to-maturity investments investments in equity instruments that do not have a quoted market price
81. What is a finacial lease as per ASS 17 A lease is classified as finance lease if it transfers substantially all risks and rewards incidental to ownership.
82. How should government grants be shown as per IAS 20? Grants should not be credited directly to equity. They should be recognised as income in a way matched with the related costs. Grants related to assets should be deducted from the cost or treated as deferred income.
83. What are the 3 types of joint ventures as per IAS 31? Jointly controlled operations Jointly controlled assets Jointly controlled entities
84. What is an onerous contract? Is provision necessary for this ? a contract in which the unavoidable costs of meeting the obligations under the contract exceed the expected economic benefits yes, provision is necessary for this
85. What cannot be recognised as intangible assets ? Internally generated goodwill, Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance.
86. Can we reclassify an expense as intangible asset later on ? N o Expenditure on an intangible item that was initially recognized as an expense shall not be recognized as part of the cost of an intangible asset at a latter date.
87. What are methods to recognise investment property? a fair value model: Investment property should be measured at fair value and changes in fair value should be recognised in the income statement; or a cost model: Investment property should be measured at depreciated cost (less any accumulated impairment losses).
89. What is the main theme of IFRS 1? How should a company adopt IFRS and that it must explain how the transition from previous GAPP to IFRSs affected its reported financial position, financial performance and cash flows.
90. What must be disclosed as per IFRS 7? It is about financial assets. information on the significance of financial instruments to the entity’s financial position and performance; the nature and extent of risk exposures arising from financial instruments (quantitative disclosures); and the approach taken in managing those risks (qualitative disclosures).
91. What is expected to be a major issue for accountants in 2011? convergence of Indian Accounting Standards with IFRS by 1st April 2011.
92. Can directors change the location of accounts ? Yes . If the Directors decide to keep the books or any of the books at a place other than the registered office (the other place must be in India), the Registrar must be notified within seven days of the decision.
93. Who is responsible for keeping books of accounts ? managing director or manager; where the company has neither a managing director nor manager then every director of the company; and every officer and other employees and agent as defined under Section 240(6) of the Act.
94. What is the time limit for getting minimum subscription? within 120 days of the issue of prospectus otherwise return entire amount, if the subscriptions are not repaid within 130 days of the issue of prospectus, the defaulting directors will be jointly and severally liable to pay interest @ 6% per annum from the expiry of 130 days.
95. What is interest on call in arrearss as per Table A ? Interest has to be paid from the day appointed for payment to the time of actual payment at a rate not exceeding 5% per annum
96. What for can a company use share premium amount as per sec. 78? issuing fully paid bonus shares to the members; writing off preliminary expenses of the company; writing off the expenses of or the commission paid or discount allowed on any issue of shares or debentures of the company; or providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company.
97. Can a company use share premium in buy back of its shares? Yes according to Section 77A, a company may purchase (or buy back) its own shares or other specified securities out of the Securities Premium Account.
98. What conditions must be fulfilled for issue of shares at discount ? The shares must belong to a class already issued. At least one year has elapsed since the date on which the company was entitled to commence business The issue is authorised by a resolution passed in the general meeting of the company and the sanction of the Central Government is obtained.The resolution must specify the maximum rate of discount at least one year has at the date of the issue elapsed from commencement of business shares be issued within two months of sanction
99. Where should the amount paid to promoters for services rendered by them is shown in accounts? Show it in goodwill
100. What is the time limit for submission of return regarding buy back of shares ? After the completion of buy-back, a return containing such particulars relating to the buy-back as may be prescribed has to be filed with the Registrar of Companies and Securities and Exchange Board of India within thirty days of such completion.
101. What cannot be used for buy back of shares ? Free resserves can be used but these should be excluded : Unamortised miscellaneous expenditure. Unamortised deferred revenue expenditure. Contingent liabilities likely to mature and not provided for. Purchased goodwill. Any diminution of long-term investments not provided for. Any impairment in the value of tangible assets not provided for.
102. Which money can used for redemption of preference shares ? The capital redemption reserve account / fresh issue proceeds may be applied by the company in paying up unissued shares of the company to be issued to the members of the company as fully paid bonus shares. Otherwise Capital Redemption Account must be maintained intact unless otherwise sanctioned by the Court
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108. THANKS.... GIVE YOUR SUGGESTIONS AND JOIN AFTERSCHOOOL NETWORK / START AFTERSCHOOOL SOCIAL ENTREPRENEURSHIP NETWORK IN YOUR CITY / COLLEGE [email_address] PGPSE – WORLD'S MOST COMPREHENSIVE PROGRAMME IN SOCIAL ENTREPRENEURSHIP