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The paradigm shift in the economic environment in India during last few years has led to
increasing attention being devoted to accounting standards as a means towards ensuring
potent and transparent financial reporting by corporate. Further, cross-border raising of
huge amount of capital has also generated considerable interest in the generally accepted
accounting principles in advanced countries such as USA. Initiatives taen by
International !rgani"ation Securities #ommission $I!S#!% towards propagating
International Accounting Standards $IASs%& International Financial 'eporting Standards
$IF'Ss%, issued by the International Accounting Standards (oard $IAS(%, as the uniform
language of business to protect the interests of international investors have brought into
focus the IASs& IF'Ss.
The Institute of #hartered Accountants of India, being a premier
accounting body in the country, too upon itself the leadership role by establishing
Accounting Standards (oard, more than twenty five years ago, to fall in line with the
international and national e)pectations. Today, accounting standards in India have come
a long way.
Accounting Standards
Accounting Standards are written policy documents issued by e)pert accounting body or
by government or other regulatory body covering the aspects of recognition, treatment,
measurement, presentation and disclosure of accounting transactions and events in the
financial statements. Accounting Standards in India are issued by The Institute of
#hartered Accountants of India $I#AI% .
The Accounting Standards deals with the issue of *-
+ 'ecognition of events and transactions in the financial statements.
+ ,easurement of these transactions and events.
+ -resentation of these transactions and events in the financial statements in a
manner that is meaningful and understandable to the reader.
+ .isclosure re/uirements which should be there to enable the public at large and
the staeholders and the potential investors in a particular, to get Ananda insight
into what these financial statements are trying to reflect and thereby facilitating
them to tae prudent decisions .
This research is being proposed considering the various accounting policies and practices
followed by (012 so that there is harmoni"ation of accounting policies and practices
with accounting Standards.
Accounting Standards standardi"e diverse accounting policies with a view to*
+ To eliminate the non-comparability of financial statements there by improving the
reliability of financial statements.
+ To provide a set of standard accounting policies, valuation norms and disclosure
Accounting Standards reduce the accounting alternatives in the preparation of financial
statements within the bounds of rationality, thereby ensuring comparability of financial
statements of different enterprises.
According to AICPA-3 $3456%, 7Accounting standards may be regarded as a principal
which has been logically derived from the ob8ective of accounting, which has been
awarded the stamp of authority with the intention of producing guidelines for formulation
of accounting practices comparable with the ob8ective9. In this paper, an attempt has been
made to e)hibit the disclosure practices in India by Indian companies by dividing them
into three levels as per the Institute of #hartered Accountants in India $I#AI% norms and
further a /uestionnaire survey has been conducted to reach a conclusion that up to what
e)tent Indian companies are complying with the Indian as well as international
accounting standards.
ACCOUNTIN STANDARDS !" Int#rgo$#rn%#nta& Wor'ing rou( o) E*(#rts on
Int#rnationa& Standards o) Accounting and R#(orting +ISAR,
:uidance needs to be provided in various cases for effective implementation of
Accounting Standards* Ade/uate guidance needs to be provided for effective
implementation of the accounting standards. In some cases, where accounting standards
re/uire management of the enterprises concerned to use 8udgment in maing accounting
estimates etc.; however, various issues arise in the actual implementation. To address
those issues, I#AI has issued Accounting Standards Interpretations $ASIs%, guidance
notes and other e)planatory material. For e)ample, AS 3<, (orrowing #osts,
corresponding to IAS =6, defines the term >/ualifying asset? as 7an asset that necessarily
taes a substantial period of time to get ready for its intended use or sale9. The issue as to
what constitutes >substantial period of time? has been addressed by issuance of ASI 3,
Substantial -eriod of Time.
Further, I#AI has also undertaen various pro8ects for providing guidance on accounting
matters arising from issuance of a new accounting standard, e.g., it has recently
undertaen the pro8ect for preparation of a :uide on the manner of estimating future cash
flows and discount rates in the conte)t of AS =@, Impairment of Assets.
A R#$i#- o) Indian and Int#rnationa& Accounting Standards and Practic#s in India
. H S /a0(a"##
Anu!1a Sri$asta$a
7Accounting is as old as money itself9. #hanaya in his Arthashastra emphasi"ed on the
e)istence and the need of proper accounting and auditing. 0owever, modern system of
accounting owes its origin to -acioli who lived in Italy in the 3@th century. In those early
days, business transactions were not so comple) due to the e)istence of small and easily
manageable organi"ations, which were managed by the proprietor himself. 7Accounting
to be useful on an integral basis for economic development must be convenient and
practiced in a broad conte)t. It must encompass the private and public enterprises
$financial and management% and government and national accounting, these branches of
accounting refers to accounting information system.9 Accounting standards have been
and are being formulated at different levels. At the international penal, the accounting
standards are set up by the International Accounting Standards (oard. For different
countries, the accounting standards are formulated by duly recogni"ed and constituted
authority eeping in mind* the ob8ective of harmoni"ing the national accounting
standards, and the legal provisions of accounting practices and other factors relating to
that particular country..
The study is proposed to be conducted in a public sector undertaing vi". (harath 0eavy
1lectricals 2td$(012%. The focus of this research will be on the analysis of
Accounting Standards issued by I#AI.
+ To study the disclosure given by the company in the preparation and presentation
of financial statements.
+ To analy"e the implications of Accounting standards adopted by (012
+ To evaluate accounting policies and practices of (012 against the set norms and
Stat#%#nt o) t1# (ro!&#%
Accounting as a language of business communicates the financial results of an
1nterprise to various staeholders by means of financial statements. If the financial
accounting process is not properly regulated there is a possibility of financial
statements being misleading A providing the distorted picture of the business, rather
than state of affairs. In order to ensure transparency, consistency, comparability A
reliability of financial reporting it is essential to finali"e the accounting principles and
The #ompany has to inform the stae holders the direction to which it is
moving. Accounting is one such move. The study undertaen is an effort to analy"e
the disclosures given by the (012 that would help various staeholders in decision
maing. 0ence, the study helps in title 7Transparency in implementation of
Accounting Standards9
M#t1odo&og" o) t1# stud"
The outcome of the study and its effectiveness depends upon the end of data used and
findings of the collected data. Accounting policies and practices are compared against
the e)isting Accounting Standards issued by I#AI, based on which observations will be
The methodologies adopted for this present study are both primary data and secondary
Pri%ar" Data
-rimary data is the data obtained from the concerned personnel.
S#condar" Data
Secondary data are those obtained indirectly, It is e)tracted from
a. #ompany profile.
b. Bournals.
c. Internet.
d. I#AI reports.
e. Annual reports
The analysis of the study is proposed to be carried by following the Statements of
concepts and fundamentals accounting principles relating to the standards,
.efinition of the terms used in the standards, the manner in which the accounting
principles have been applied for formulating the standards, study on the presentation
and disclosure re/uirements in complying with the standards.
The chapter scheme proposed for this study is as follows*
#0A-T1' 3* Introduction
3.3* Accounting Standards
3.=* ,eaning and concepts of Accounting Standards
3.=* !b8ectives of Accounting Standards
3.6* -rocedures for issuing Accounting Standards by I#AI
3.C* Scope of Accounting Standards
3.D* (enefits of Accounting Standards

#0A-T1' =* 'esearch .esign
#0A-T1' 6* Industry -rofile and #ompany -rofile
#0A-T1' C* .ata Analysis and Interpretation
#0A-T1' D* Findings and #onclusion
#0A-T1' <* Suggestions and 'ecommendations
#0A-T1' 5* (ibliography