This document discusses accounting concepts and a case study of DLF Ltd. It defines 9 key accounting concepts including business entity, money measurement, going concern, and accrual concepts. It then discusses a case where DLF Ltd was alleged to have violated accounting standards and disclosure requirements regarding subsidiary companies in its IPO filings. SEBI investigated and ultimately banned DLF Ltd from the securities market for 3 years. The ban had a significant negative impact on DLF's stock price.

1. Concept of Accounting and Impact
of Accounting
Parikshit Purandare
FYMMS
VIVA IMR

2. Objectives
Concept of Accounting
Explaining nine Accounting concepts
A case study of Company DLF Ltd. Allegation on
company is impacting on Accounting Standards and
balance sheet

3. What is Accounting Concept ?
Accounting concept refers to the basic assumptions
and rules and principles which work as the basis of
recording of business transactions and preparing
accounts.

4. Accounting Concepts
Business entity concept
Money measurement concept
Going concern concept
Accounting period concept
Accounting cost concept
Duality aspect concept
Realization concept
Accrual concept
Matching concept

5. Business entity concept
The business enterprise and its owners are two
separate independent entities
Thus, the business and personal transactions of its
owner are separate.

6. Money measurement concept
The transactions which can be expressed in terms of
money are recorded in the books of accounts.
In our country such transactions are in terms of
rupees.

7. Going concern concept
A business firm will continue to carry on its activities
for an indefinite period of time.
Thus, it will not be dissolved in the near future.
This is an important assumption of accounting, as it
provides a basis for showing the value of assets in the
balance sheet

8. Accounting period concept
All the transactions are recorded in the books of
accounts on the assumption that profits on these
transactions are to be ascertained for a specified
period.
This concept requires that a balance sheet and profit
and loss account should be prepared at regular
intervals.

9. Accounting cost concept
All assets are recorded in the books of accounts at
their purchase price
It includes cost of acquisition, transportation and
installation and not at its market price

10. Duality aspect concept
It can be expressed by equation
Assets = Liabilities + Capital
It affects two accounts in their respective opposite
sides.

11. Realization concept
Revenue from any business transaction should be
included in the accounting records only when it is
realized.
Revenue is said to have been realized when cash has
been received.

12. Accrual concept
An amount of money that is yet to be paid or received
at the end of the accounting period.
Revenue is realized at the time of sale of goods or
services irrespective of the fact when the cash is
received.

13. Matching concept
Revenue and the expenses incurred to earn the
revenues must belong to the same accounting period.
Once the revenue is realized, the next step is to
allocate it to the relevant accounting period.

14. DLF LTD
IPO in 2007
May 7,2007 :Red Hearing Prospectus approval by SEBI
July 18,2007 :Listed at BSE and NSE
Mr. Kimsuk Krishna Sinha filed complaints
1)June 4,2007 : Sudipti Estates Private Limited ("Sudipti") has duped
him by Rs.34crore in transaction of land.
2)July 19,2007: To SEBI about his first complain & take action
April 9, 2010 :Then Written petition to was given to Honorable Delhi
High Court in to investigate DLF Ltd. by SEBI

15. Related companies
DLF Retail Developers Ltd. ("DRDL")
DLF Home Developers Ltd. ("DHDL")
DLF Estate Developers Ltd. ("DEDL")
Sudipti Estates Private Limited ("Sudipti")
Shalika Estate Developers Private Limited("Shalika")
Felicite Builders & Construction Pvt. Ltd. ("Felicite")

18. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,
1997 ("SAST Regulations")
Accounting Standard-23 ("AS-23") : failed to disclose names of these
subsidiary companies should have been disclosed in the
RHP/Prospectus of DLF
Violated the provisions of clauses 6.2, 6.9.6.6., 6.10.2.3, 6.11.1.2, 6.15.2
and 9.1 of DIP Guidelines read with regulation 111 of ICDR Regulations
and section 11 of the Securities and Exchange Board of India Act, 1992
("SEBI Act")
Control over the composition of Board of directors of a company‟
prescribed by Section 4(2) of the Companies Act, 1956 and AS 21
Provisions of section 12 A(a), (b) and (c) of SEBI Act read with
regulations 3 (a), (b), (c), (d), 4(1), 4 (2)(f) and (k) of SEBI (Prohibition
of Fraudulent and Unfair Trade Practices relating to Securities
Market) Regulations, 2003 ("PFUTP Regulations").
Key Management Personnel for the purposes of AS-18

19. 1
Sudipti had entered into a development agreement during the year
2006 with DLF Commercial Projects Corporation (DCPC) a
partnership firm of DLF. DCPC had provided performance deposit
amounting to Rs45 crore during the year 2006-07 to Sudipti.
During the period Sep-Oct, 2006,Sudipti was funded by DLF s‟
subsidiaries / associates through a series of transactions through an
entity named Vikram Electric & Equipments Pvt. Ltd. ("Vikram").
These funds were used for purchase of land and creation of
development rights on the land so acquired.
As per the annual accounts of Sudipti for the year 2011-12, this amount
is appearing is as liability even after 6 years of claimed dissociation.
Both Sudipti and Shalika did not account for any expenses on account
of operations, cost of establishment/personnel, rent, electricity,
telephone, property tax or salary in their books of accounts during the
financial year 2006-07 and 2007-08. It has been alleged that some
other entity was incurring /absorbing such costs.

20. Impact of 3years ban by SEBI
on DLF Ltd.
Before news of ban in Stock Market

21. Cont…
After news of ban in Stock Market

22. Bibliography
http://www.sebi.gov.in/cms/sebi_data/attachdoc
s/1413191997529.pdf
Stock News from moneycontrol Mobile
Application
http://cms.sinhagad.edu/SIM_Web_Assets/Sampl
enotesof accounting-SIBAR.pdf