This document discusses various Indian accounting standards. It provides an overview of 15 accounting standards, including standards on contingencies and events after the balance sheet date, extraordinary items, changes in accounting estimates and policies, effects of changes in foreign exchange rates, government grants, borrowing costs, leases, earnings per share, intangible assets, and provisions, contingent liabilities, and contingent assets. The standards are issued by the Accounting Standards Board of ICAI to establish uniform practices for financial statement preparation according to Indian GAAP for improved transparency and understanding by users.

1. Accounting Standards
Dr.R.Sridevi
Assistant Professor
Department of B Com PA
Sri Ramakrishna College of Arts and Science
Coimbatore

2. Accounting Standard
 An accounting standard is a common set of principles, standards and procedures that define the basis
of financial accounting policies and practices.
 Accounting standards improve the transparency of financial reporting in all countries.
 Accounting Standards are issued/ amended by the Accounting Standards Board of ICAI, to establish
uniform standards for preparation of financial statements, in accordance with Indian GAAP
(Generally Accepted Accounting Practices), for better understanding of the users.

3.  Accounting standards lay down the terms and conditions of accounting
policies and practices by way of codes, guidelines and adjustments for making
the interpretation of the items appearing in the financial statements easy and
even their treatment in the books of account.

4. Need for Accounting Standards
 For bringing uniformity in accounting methods – method for depreciation
 For improving the reliability of the financial statements – true and fair view of
business concern
 Simplify the accounting information – example AS 3(revised) for cash flow
statement
 Prevents frauds and manipulations
 Helps auditors – basis for auditing

5. AS 4 – Contingencies and Events
occurring after the balance sheet date
 AS 4 deals with treatment in the financial statements of:
(A) contingencies
(B) events which occur after balance sheet date
 Contingencies are situations or conditions, the eventual outcome of which, profit or loss, would be
determined or known only on happening, or non- happening, of an uncertain future event(s).
 Events occurring after the balance sheet date
These are those noteworthy events, favorable as well as unfavorable which occurs between balance
sheet date and date on which such financial statements are considered and approved by the BoD (Board
of Directors) in case of companies, and, by equivalent approving authorities

6. Accounting treatment and disclosure
 contingent loss – prudent to account for such loss
 disclosed in the financial statements by way of notes

7. AS 5
Deals with the following four specific items
 Profit of Loss from extraordinary activities – disclosed separately in FS
showing the effect of overall profit/loss due to these activities
 Prior period items – the current period’s FS should show the effect of such
items
 Changes in accounting estimates – change in estimate affects ordinary
activities, it is disclosed under ordinary activities
 Changes in accounting policies – substantial effect and impact should be
shown in the FS

8. AS 11 – Effect of changes in Foreign
Exchange rates
 Exchange rate to be used
 Exchange differences must be recognized as income or as expense

9. AS 12 – Government Grants
 Capital Approach – treated as a part of capital or shareholder’s fund
 Revenue Approach – either credited to P&L a/c as other income or deducted
from related expenses in the P&L a/c

10. AS 16 – Borrowing costs
Interest and other costs incurred by an enterprise in connection with the
borrowing of funds
Disclosure
 Amount debited to P&L a/c
 Amount of BC capitalized during the year

11. AS 19 - Lease
Disclosure in FS
 Financial lease – assets acquired on lease should be shown separately
 Operating lease – lease payment is recognized as an expense in the P&L a/c

12. AS 20 - EPS
 EPS is a financial ratio – earnings available on each equity share
 Disclosed with and without extraordinary items

13. AS 26 – Intangible Assets
 Intangible asset is an non-physical and non-monetary asset which is held for
use in production
 Amortization should start when the asset is put into use
 Useful life of the asset does not exceed 10 years
 Disclosure – should be disclosed as a separate item

14. AS 29 – Provisions, Contingent Liabilities
and Contingent Assets
 Ensures appropriate recognition and measurement for provision
 Sufficient information is disclosed in notes to the FS
 Disclosure – for each class of provision
a. Amount at the beginning and at the end of the period
b. Additional provisions made
c. Amount used
d. Unused amount reversed during the period

15. Thank You