Name: Purswani Deepa Niranjandas Jaya

Class: M.COM -2

Roll no: 22

Subject: ADVANCED AUDITING

Topic: GUIDELINES BY ICAI

Semester: 4th

Guidance: Prof. BHARTI LALWANI

Academic
Year: 2016-2017
 DECLARATION

I, Purswani Deepa the student of J.W.SADHUBELLA GIRLS

COLLEGE M.COM Part 2, hereby declare that I have
completed this project GUIDELINES BY ICAI in the
academic year 2016-2017.The Information submitted is true and
original to the best of my knowledge.

----------------------
Students Signature
 CERTIFICATE
I, PROF, BHARTI LALWANI hereby certify that DEEPA
PURSWANI of M.COM PART 2 Master of Commerce of
J.W.SADHUBELLA GIRLS COLLEGE Ulhasnagar-421001 has
completed the project entitled GUIDELINES BY ICAI in
the academic year 2016-17 under my guidance.
The Information submitted is true and original to the best of my
knowledge.

PROF BHARTI LALWANI

Signature
 J.WATUMALL SADHUBELLA GIRLS COLLEGE

UNIVERISITY OF MUMBAI

CERTIFICATE

This is to certify that DEEPA PURSWANI Master of

Commerce (semester 4) for the academic year 2016-17 has
completed the project on GUIDELINES BY ICAI under
the guidance of PROF BHARTI LALWANI

Prof. BHARTI LALWANI Prof. KIRAN MENGHANI

(Project Guide) (Co-ordinator)

Prof. Dr VASANT MALI

(Principal I/C)

External examiner
 ACKNOWLEDGEMENT
I take this opportunity to present a sense of gratitude
towards my project guide PROF BHARTI LALWANI for
her excellent guidance and letting me know about the
topic provided GUIDELINES BY ICAI and personal
guidance have provided a good basic for my project.

I would also like to thank college authorities, our

principal, Co-ordinator and subject guide for authorizing
my project.
PROJECT REPORT ON:-

GUIDELINES
BY
ICAI
(Institute of Chartered
Accountants of India)

INDEX
SR. TOPIC
INTRODUCTION OF INDIAN ACCOUNTING
STANDARDS

Introduction
1
What are Accounting Standards
Who Issues Accounting Standards in India
About ICAI
Process of formulating Accounting Standards
INDIAN ACCOUNTING STANDARDS

2 Introduction
List of Indian Accounting Standards
INTERNATIONAL ACCOUNTING STANDARDS

Introduction
3
About International Accounting Standard
Board

INTERNATIONAL ACCOUNTING STANDARDS

4

Comparative Study In Indian Accounting

5
Standards and International Accounting Standards
& Conclusion
7 Bibliography

Introduction:-
 Accounting Standards establish rules relating to
recognition, measurement and disclosures thereby ensuring that
all enterprises that follow them are comparable and that their
financial statements are true, fair and transparent. High-quality
accounting standards are a necessary and important element of a
sound capital market system. In public capital markets such as
those in the United States. High-quality accounting standards
reduce uncertainty and increase overall efficiency and investors
confidence by requiring that financial report provide decision
useful information that is relevant, reliable, comparable and
transparent once confined by national borders transactions in
todays capital market often are driven by a demand for and
supply of capital that transcends national boundaries. With the
increase in cross-border capital rising and investment
transactions comes an increasing demand for a set of high-
quality international accounting standards that could be used as
a basis for financial reporting worldwide.

Accounting Standards are written policy documents issues

by the expert accounting body or by government or other
regulatory body covering the aspects of recognition,
measurement, presentation and disclosure of accounting
transactions in financial statement.
What are Accounting Standards:-
 Accounting Standards are the statements of code of practice
of the regulatory accounting bodies that are to be observed in the
preparation of financial statements. In layman terms accounting
standards are the written documents issued by the experts
institutes or other regulatory bodies covering various aspects of
measurement treatment, presentation and disclosure of
accounting transactions.

Who issues Accounting Standards in India:-

The institute of chartered Accountants of India (ICAI)

reorganizing the need to harmonies the diverse accounting
policies and practices at present in use in India constituted
accounting standard board (ASB) on April 21, 1977. The main
role of ASB is to formulate accounting standards from time to
time.

About ICAI:-
 The Institute of Chartered Accountants of India (ICAI) is a
statutory body established under the Chartered Accountants act
1949.(Act No.XXXXVIII of 1949) for the regulation of the
profession of Chartered Accountants in India. During its 61
years of existence, ICAI has achieved recognition as a premier
accounting body not only in the country but also globally, for its
contribution in the fields of education, professional development
maintenance of high accounting, auditing and ethical standards.
ICAI now is the second largest accounting body in the whole
world.

Procedure of formulating Accounting Standards in India:-

 The institute of Chartered Accountant of India (ICAI)
recognizing the need to harmonize the diverse accounting
policies and practices, constituted an accounting standards
boards (ASB) on April 21, 1977. The main faction of ASB so
that such standards may be mandated by the council of ICAI.
While formulating the standards in India, ASB will take into
consideration the applicable laws custom usages and business
environment. ICAI is one of the members of International
Accounting Standards Committee (IASC) and has agreed to
support the objectives of IASC. ASB will give due consideration
to IAS and try to integrate them to the extent possible in light of
the considerations and practices pre-vailing in India.
The accounting standards issued will apply to General
Purpose Financial Statement this would include balance-sheet,
Profit & Loss A/c and other statement and explanatory notes
which form part thereof issued for the use of shareholders or
members, Creditors, Employees and public at large. The
Accounting Standards are intended to apply only to items which
are material. The standards are generally expected to apply
prospectively unless otherwise stated.

Broadly the following procedure will be adopted for formulating

Accounting Standards:-
 ASB shall determine the board areas in which accounting
standards need to be formulated and the priority in regards
to the selection thereof.

In the preparation of the accounting standards ASB will be

assisted by study groups constituted to consider specific
subjects. In the formation of the study groups provision will
be made for wide participation by the members of ICAI and
others.

ASB will also hold a dialogue with the representative of the

Government, Public sector, Industry and other
organizations for ascertaining their views.

Based on the above an exposure draft of the proposed

standard will be prepared and issued for comments by
members of ICAI and the public at large.

After taking into consideration the comments received the

exposure draft will be finalized by the ASB and submitted
to the council of ICAI.
The council of ICAI will consider the final draft and if
found necessary modify the same in consultation with ASB.
The accounting standard on the relevant subject will then
be issued under the authority of the council.

Indian Accounting Standards:-

 Introduction:-

The council of the institute of chartered accountant of India

as so far issue 32 (thirty two) accounting standard. Whoever
accounting standards 8th on Accounting for research and
development has been withdraw on consequent to the
issuance of accounting standard 26th Intangible Assets thus
effectively there are 31st accounting standard at present the
accounting standard issued by the ABC establish which have
to be complied so that the financial statement are prepared in
accordance with generally accepted accounting principles.

List of Indian Accounting Standards:-

AS 1 Disclosure of Accounting Principles

AS 2 Valuation of Inventories

AS 3 Cash Flow Statements

AS 4 Contingencies and Events Occurring After the

Balance Sheet Date
AS 5 Net Profit or Loss for the Period, Prior Period
Items and Changes in Accounting Policies
AS 6 Depreciation Accounting

AS 7 Construction Contracts
(Revised)

AS 8 Accounting for Research and Development

AS 9 Revenue Recognition

AS 10 Accounting for Fixed Assets

AS 11 The Effects Of Changes In Foreign Exchange

(Revised Rates
2003)
AS 12 Accounting for Government Grants

AS 13 Accounting for Investments

AS 14 Accounting for Amalgamations

AS 15 Employee Benefits [click here for related

(Revised announcement]
2005)
AS 16 Borrowing Costs
AS 17 Segment Reporting

AS 18 Related Party Disclosures

AS 19 Leases

AS 20 Earnings Per Share

AS 21 Consolidated Financial Statements

AS 22 Accounting for taxes on income

AS 23 Accounting for Investments in Associates in

Consolidated Financial Statements
AS 24 Discontinuing Operations
AS 25 Interim Financial Reporting
AS 26 Intangible Assets
AS 27 Financial Reporting of Interests in Joint Ventures
AS 28 Impairment of Assets
AS 29 Provisions, Contingent Liabilities and Contingent
Assets
AS 30 Financial Instruments: Recognition and
Measurement
AS 31 Financial Instruments: Presentation
AS 32 Financial Instruments: Disclosures
Indian Accounting Standards:-
AS 9: Revenue Recognition:-

Introduction

This statement was issued by ICAI in the year 1985 & the
Initial years it was recommendatory for only level I enterprises
& but was made mandatory for enterprise in India from april 01,
1993.

Revenue
Revenue is the gross inflow of cash, receivables or other
consideration arising in the course of the ordinary activities of
an enterprise from the sale of the goods, from the rendering of
the services, & from the use by others of enterprises resources
yielding interest, royalties & dividend. Revenue is measured by
the charges made to customers or clients for goods supplied &
services rendered to them & by the charges & rewards arising
from the use of resources by them. In an agency relationship, the
revenue is the amount of commission & not the gross inflow of
cash, receivable or other consideration.

This statement dose not deals with the following aspects of

revenue recognition to which special consideration apply:
 I. Revenue arising from construction contracts;

II. Revenue arising from hire-purchase, lease agreements;

III. Revenue arising from government grants & other similar

subsidies;

IV. Revenue of insurance companies arising from insurance

contracts.

Examples of items not included within definition of

revenue for the purpose of this statement are:
 I. Realized gains resulting from the disposal of, & unrealized
gains resulting from the holding of, non-current assets. E.g.
appreciation in the value of fixed assets.

II. Unrealized holding gain resulting from the change in value

of current assets, & the natural increases in herds &
agricultural & forest products;

III. Realized or unrealized gains resulting from changes in

foreign exchange rates & adjustments arising on the
translation of foreign currency financial statements;

IV. Realized gain resulting from the discharged of an

obligation at less than its carrying amount;

V. Unrealized gains resulting from the restatement of the

carrying amount of an obligation;

AS 10: Accounting for Fixed Assets:-

 Introduction

The standard deals with the disclosure of the status of the fixed
assets in terms of value. The standard dose not takes
consideration the specialized aspects of accounting for fixed
assets reflected with the effects of price escalations but applies
to financial statements on historical cost basis. It is important to
note that after introduction of AS 16; 19 & 26, provision relating
to respective AS are held withdrawn & the rest in mandatory
from the accounting year 01/04/2000. an entity should disclose
(i) the gross & net book values of fixed assets at beginning and
end of an accounting period showing additions, disposals,
acquisitions & other movement, (ii) expenditure incurred on
account of fixed assets in the course of construction or
acquisition, (iii) revalued amounts substituted for historical cost
of fixed assets with the method applied in computing revalued
amount.

This statement dose not deal with the accounting for the
following item to which special considerations apply:

I. Forests, plantations & similar regenerative natural

resources.
 II. Wasting assets including mineral rights, expenditure of the
exploration for an extraction of minerals, oil, natural gas &
similar non-regenerative resources.
III. Expenditure on real estate development and
IV. Live stock.

Identification of fixed assets:

Fixed assets are assets held with the intention of being used for
the purpose for the producing or providing goods or services &
is not held for sale in the normal course of business. Stand-by
equipment & servicing equipment are normally capitalized.
Machinery spares are change to the profit & loss statement as
and when consumed. However, if such spare can be used only in
connection with an item of fixed assets, it may be appropriate to
allocate the total cost on a systematic basic over a period not
exceeding the useful life of principal item.

AS 12: Accounting For Government Grants

 Introduction

The standard comes in to effect in respect of accounting periods

commencing on or after 01/04/1992 & will be recommendatory
in nature for an initial period of 2 years. Accounting standard 12
deals with accounting for governments grants for specifies that
the government grants should not be recognized until there
reasonable assurance that the enterprise will company comply
with the conditions attached to them, and the grant will be
received. The standard also describes the treatment of non-
monetary government grants; presentation of grants related to
specific fixed assets, related to revenue, related to promoters,
contributions; treatment for refund of governments grants etc.
the enterprises are required to disclose (i) the accounting policy
adopted for government grants including the methods of
presentation in the financial statements; (ii) the nature & extent
of government grants recognized in the financial statement
including non-monetary grants of assets given either at a
concessional rate or free of cost.

This statement does not deal with:

 I. The special problem arising in accounting for government
grants in financial statements reflection the effects of
changing prices or in supplementary information of a
similar nature.
II. Government assistance other than in the form of
government grants
III. Government participation in the ownership of the
enterprises.

The receipt of the government grant by an enterprise is

significant for preparation of the financial statement for 2
reasons. Firstly, if a government grant has been received an
appropriate method of accounting therefore is necessary.
Secondly, it is desirable to give an indication of the extent to
which the enterprises has benefited from such grants during
the reporting period. This facilitates comparison on an
enterprises financial statement with those prior periods &
with those of other enterprise.

Accounting treatment of government grants

 To broad approaches may be followed for the accounting
treatment
Of government grants: the capital approach under which
grand is treated as part of share holder funds, and income
approach under which a grand is taken to incomes over one
or more period.

Those in support of capital approach argue as follows:

I. Many governments grants are in the nature of

promoters contribution that is they are given by way of
contribution towards its total capital outlay ordinarily
expected in the case of such a grants.
II. They are not earned but represent an incentive provided
by government without related costs.

Arguments in support of the income approaches are as

follows:
 I. As a income tax & other taxes are charges against income,
it is logical to deal also with government grants, which are
an extension of fiscal polices, in the profit & loss statement.
II. In case grants are credited to share holders fund, no
correlation is done between the accounting treatment of the
grants & the accounting treatment of the expenditure to
which grant relates.

AS 18: Related Party Disclosures

 Introduction

This standard comes into effect in respect of accounting period

commencing on a after 01/04/2001 & is mandatory in nature.
The standard prescribes the requirement for disclosure of related
party relationship & transaction between the reporting enterprise
& its related party. The requirements of the standard apply to the
statement of each reporting enterprises as also to consolidate
financial statement presented by a holding company. Since the
standers is more subjective, particularly with respect to
identification of related parties [through provision related to
related party concept are given under section 297/299/301 of the
companies act 1956 and section 40A (2)(b) of the income tax act
1961], obtaining corroborative evidence becomes very difficult
for the auditors. Thus successful implementation of AS 18 is
depend upon how transparent the management is an how
vigilant the auditors are.

Objective
The objective of this statement is to established requirement for
disclosure of:
I. Related party relationship &
II. Transaction between reporting enterprise & it related
parties.

Scope

This statement should be applied in reporting related party

relationship & transaction between reporting enterprises & its
related parties. The requirement of this statement applied to the
financial statement of each reporting enterprises as also to
consolidate financial statement presented by a holding company.

This statement deals only with related party relationship

describe (a) to (e) below:

a. Enterprises that directly, or indirectly through one or

more intermediaries, control, or are controlled by, or
are under common control with the reporting
enterprise (this include holding company, subsidiaries
& fellow subsidiaries).
b. Associated & joint venture reporting enterprise & the
investing party or venture in respect of which the
reporting enterprise is an associate or a joint venture.
c. Individual owning, directly or indirectly, an interest in
the voting power of the reporting enterprises that give
them control or significant influence over the
enterprises, and relatives of any such individual.
d. Key management personnel & relative of such
personnel &
e. Enterprise over which any person describes in c or d is
able to exercise significant influence. This includes
enterprises owned by director or major shareholders of
the reporting shareholder of the reporting enterprises
& enterprises that have a member of key management,
with reporting enterprise.
 International Accounting Standards:-

Introduction:-
Accounting is a language of business communicates the
financial result of an enterprise to the various interested parties
by means of financial statements exhibiting true and fair view of
its state of affairs as also of working result. Like any of other
language, accounting has its own set of rules, which have been
developed by accounting bodies. These rules cannot be
absolutely rigid. These rules, accordingly, do provide a
reasonable flexibility in line with the economic environment,
social needs, legal requirements and technological development.
These how ever, do not emply that accounting principles and
parties can be applied arbitrarily.
Accounting principles have to operate with in the bonds of
rationality. This could, perhaps, be considered as a genesis for
setting the accounting standards.

Accounting Standards are written policy document issued

expert accounting body or by government or other regulatory
body covering the aspects recognition, measurement,
presentation and disclosure of accounting transaction in
financial statement. The ostensible purpose of the standard
setting bodies is to promote the dissemination of timely and
useful financial information to investors and certain other parties
having an interest in the companys economic performance. The
accounting standard reduces the accounting alternative in the
preparation of financial statement within the bond of rationality,
thereby ensuring comparability of financial statement of
different enterprises.

The accounting standards deals with the issue of

i. Recognition of events and transactions in the financial
statements,
ii. Measurement these transaction and events,
iii. Presentation of these transactions and events in the
financial statement in a manner that is meaningful and
understandable to the reader, and
iv. The disclosure requirements which should be there enable
the public at large and the potentational investors in
particular, to get an insight in to what these financial
statement are trying to reflect and there by the facilitating
them to take prudent and informed business decisions.
 International Accounting Standard Board:
With a view of achieving this objective, the London based
group mainly the international committee (IASC), responsible
for developing international accounting standard was established
in June 1973. it is presently known as international accounting
standard board, the IASC comprises the professional accounting
bodies of over 75 countries(including the ICAI). Primarily, the
IASC was established, in the public interest to formulate and
publish, international standard to be followed in the presentation
of audited financial statement. The member of IASC have
undertaken responsibility to support the standards promulgated
by IASC and to promulgate those standard in there respective
countries.
Between 1973 & 2001, the IASC released international
accounting standard. Between 1997 & 1999, the IASC
restructured there organization, which resulted in formation of
IASB. These changes came in to effect on 1 st April 2001
subsequently, IASB issued statement about current and future
standards: IASB publishes standards in a series of
pronouncements, called international financial, reporting
standards (IFRS). However, IASB has not rejected the standards
issued by the ISAC those pronouncements continue to be
designated as an international Accounting standard (IAS). The
IASB approved IASB resolution on IASC standards and there in
April 2001, in which its conform the status of all IASC
standards and SIC interpretations in effect as on 1st April 2001.
 IAS-18: Revenue

IAS 18 on Revenue is applicable for periods beginning on or

after 1st Jan 1995

IAS 18 prescribes accounting treatment for revenue arising

from:
The sale of goods:
The rendering of services; &
The use by others of entity assets yielding interest
royalties & dividend

It excludes the treatment of revenue arising from transaction

covered by other standards or amount collected on behalf of
third parties (e.g. Vat).
 Summary

Revenue is measured at the fare value of the consideration

received or receivable. The consideration usually in cash. If the
inflow of cash is significant deferred, & there is below-market
rate of interest or no interest, the fare value of consideration is
determined by discounting expected future receipts. If dissimilar
goods or services are exchanged (as in barter transaction)
revenue is fare value of the goods or services or received or, if
this is not reliably measurable, the fare value of goods or
services given up.

Revenue should measure at the fair value of the

consideration received:
Trade discount & value rebates are deducted to determine
fair value. How ever, payment discounts non-deductible.
The amount of revenue can be measured reliably;
The costs of transaction can be measured reliably;
Significant risks & rewards of ownership are transferred to
the buyer;
The seller has no continuing managerial involvement or
control over the goods;
It is probable that economic benefits will flow to the seller;
and
 Interest revenue should be recognized on time proportion
basis using the effective interest. Royalties should be
recognized on an accruals basis in accordance with the
substance of the relevant agreement. Dividend revenue
should be recognized when the share holder right to
received the dividend is established.
 IAS-16: Property, Plant and Equipment:-

IAS 16 on property, plant & equipment was issued in December

2003 & is applicable to annual accounting period beginning on
or after 1st Jan 2005.

IAS 16 prescribed the accounting treatment for property, plant &

equipment unless another standard requires or permit a different
account treatment. For e.g. IFRS, 5 on non current assets held
for sale & discontinued operations applies to property, plant &
equipment classified as held for sale.

Summary
Property plant & equipment is initially recognized at historical
cost. Subsequent to initial recognition, property, plant &
equipment are carried either at:

Cost less accumulated deprecation & any accumulated

impairment loss, or
Revalued amount less subsequent accumulated deprecation
and any accumulated impairment loss. The revalued
amount is the fare value is at the date of revaluation.
The choice of measurement is applied consistently to an entire
class of property, plant & equipment. Any revaluation increase
in such assets credited directly to the revaluation surplus in
equity, unless it reverses a revaluation decrease previously
recognized in profit in loss. Any revaluation decrease is
recognized in profit or loss. However the subsequent revaluation
decrease is debited directly to the revaluation surplus in equity
to the extent of the credit balance in revaluation surplus is
respect of that asset.

The gain or loss on derecognizing of an item of property, plant

& equipment is the difference between the net disposal
proceeds, if any, and the carrying amount of the item. It is
included in profit or loss.
IAS: 20- Accounting for government grants and disclosure of
government assistance:-

IAS 20 on accounting for government grants & disclosure of

government assistance was issued in April 1983 & was
reformatted in the year 1994. it came in to effect for annual
periods beginning or after 1 January 1984.
The objective of IAS 20 is to be prescribing the accounting
for, and disclosure of, grants & other form of government
assistance. How ever, IAS 20 dose not covered government
assistance that is provided in the form of benefit helpful in
determine taxable income.

Summary:
A government grant is recognized only when enterprise will
comply with any condition attached to the grants received. The
grant is recognized as a income, over the period, to match them
with the related cost for, which they are intended compensate,
on a systematic basis, & should not be credited directly to
equity.
 Non monitory grants are usually accounted for at fair value.
Although recording both the assets & grants at a nominal
amount is also permitted.
A grant receivable as a compensation for cost already incurred
or for immediate financial support, with no future related cost,
should be recognized as a income in the period in which it is
receivable.

A grant relating to assets may be presented as deferred

income or by deducting the grant from the assets carrying
amount. A grant relating to income may be reported separately
as other income or deducted from the related expenses.

If a grant become repayable it should be deferred income or

by deducting the grant from assets carrying amount. Where the
original grants related to income, the repayment should be
applied dealt with as an expenses where the original grants
related to an assets, the repayment should be treated as
increasing the carrying amount of the assets or reducing the
deferred income balance. The cumulative deprecation which
would have been charged had the grant not been received should
be charged as an expense. The government grants do not include
government assistance whose value can not be reasonably
measured, such as technical or marketing advice.
 IAS 24 Related Party Disclosure:

IAS 24 on Related Party Disclosure was issued in dec 2003 &

is applicable for annual periods beginning on or after 1 st jan
2005.

IAS 24 specifies the disclosure necessary to draw attention to

the possibilities that the financial position & financial
performance of an entity may have been affected by the
existence of the related party and by transaction and outstanding
balance with such related parties.

Summary:

A party is related to an entity if it:

Has joint control over the entity:

Has significant influence over the entity;
Directly or indirectly, controls, is control by or is under
common control with, the entity;
 Is a close member of the family of any individual who
controls, has significant influence or joint control over, the
entity;
Is a member of key management personnel of the entity of
its parent;
Is a joint venture in which the entity is venture;
Is an associates of entity;
Is an entity that is controlled, jointly controlled or
significantly influenced by, or for which significant voting
power in such entity resides with, any of the key
management personnel;
Is a post-employment benefits plan for the benefit of
employees of the entity, or of any of its related parties.

Examples of the kinds of transactions that are disclosed if they

are with a related party:

Purchase or sale of goods.

Rendering or receiving of services.
Purchase or sale of properties or other assets.
Lease.
Transfer under license agreements.
Transfer of research and development.
 Transfer under finance agreements(including loans &
equity contribution in cash or in kind)
Settlement of liabilities on behalf of the entity or by the
entity on behalf of another party.
Provision of guarantee of collateral.

A related party transaction is a transfer of resources, services or

obligations between related parties, regardless whether price is
charged.
 Comparative Study:-
Indian Accounting International
Standards Accounting
Standards
Presentation There is no separate IAS-1 prescribes
standard for minimum structure
And
disclosure. For of financial
Disclosures
companies, format and statements and
disclosure contains guidance on
requirements are set disclosures.
out under schedule VI
of the companies act.
No such requirement
under Indian GAAP. IAS-1 requires
disclosure of critical
judgments made by
management in
applying accounting
policies.
AS 5 specifically
requires disclosure of
certain items as extra- IAS-1 prohibits any
ordinary items. items to be disclosed
as extra-ordinary
 Under Indian GAPP, items.
this is typically spread
over several captions
such as share capital, IAS-1 requires a
reserve & surplus, P & statement of
L debit balance, etc. changes in equity
which comprises all
transactions with
equity holders.

Revenue AS-9 allows In case of revenue

Recognition completed service from rendering of
contract method or services, IAS-18
proportionate allows only
completion method. percentage of
completion method.

AS-9 requires interest

income to be IAS-18 requires
recognized on a time effective interest
proportion basis. method to be
followed for interest
income recognition.

No guidance on barter
transactions. Deals with
accounting of barter
transactions.

AS-9 permits
recognition when the
goods are Under IAS-18,
manufactured, payments received in
identified and ready advance for goods
for delivery in such yet to be
cases. manufactured or
third party sales
cannot be recognized
as revenue until such
goods are delivered
to the buyer.

No specific guidance
in the standards. For multiple element
contracts, the
standard broadly
requires that each
element is fair valued
and recognized when
the underlying
service is performed.
Fixed Assets AS-10 recommends IAS-16 mandates
and but does not force component
Depreciation component accounting.
accounting.

Depreciation is based
Depreciation is based
on higher of useful life
on useful life.
or schedule XIV rates.
In practice most
companies use
schedule XIV rates.

Major repair and

overhaul expenditure Major repairs and
are expensed. overhaul expenditure
are capitalized as if it
is a separate
component.

AS-10 provides that Under IAS-16, if

only that expenditure subsequent costs are
which increases the incurred for
future benefits from replacement of a part
the existing assets of an item of fixed
beyond its previously asset, such costs are
assessed standard of required to be
performance is capitalized and
included in the gross simultaneously the
book value. replaced part has to
be de-capitalized.
e.g. an increase in
capacity.
In case of change in
method of
AS-6 requires
depreciation, IAS-16
retrospectively
requires effect to be
recomputation of
given prospectively.
depreciation and any
Change in method of
excess or deficit on
depreciation is
such recomputation is
treated as change in
required to be adjusted
accounting estimate
in the period in which
under IAS-16.
such change is
effected. AS-6
considers this as
Estimates of residual
change in accounting
value needs to be
policy.
updated.

Estimates of residual
value are not updated. Revaluation is an
allowed alternative
treatment however;
No need to update revaluation will have
revaluation regulatory. to be done regularly.

Depreciation on
revaluation portion
can be recouped out
Depreciation on of revaluation
revaluation portion reserve.
cannot be recouped
out of revaluation
reserve and will have
to be changed to the
P&L account.
Provision on site-
restoration and
No guidance in the dismantling is
standard. However, mandatory.
guidance note on oil
and gas issued by
ICAI requires
capitalization of site
restoration cost.
 BIBLOGRAPHY
esb.icai.org/
https://caclub.in/icai
www.icaiknowledgegateway.org
abcaus.in/icai/guidanc