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mIntroduction

Accounting is a language that communicates the


performance and financial position of any
organization.
The institute of chartered accountant of
India(ICAI)issued the accounting standard in India.
The accounting standard suggest the role of recognition
Measurement, Treatement presentation and
disclosure of accounting transaction in the financial
statement of an organization.
The council of Institute of Chartered Accountant of
India(ICAI) constitute the Accounting Standard
Board (ASB) in April 1977,which performs the
function of preparation of the accounting standard
in India. The ASB comprises representative from
Industries, The Central Board of Direct taxes, the
Company Law board, the Comptroller and auditor
General .
m Introduction

m Fundamental of accounting Assumption.

m Nature of accounting policies.

m |  
   |     
  
m Scope.

m Objective.

m Measurement of inventories-

ë Cost inventories .
ë Cost purchase.
ë Cost convention.
ë Other cost.
m Definition.
m Benefit.
m Presentation of cash flow-

 Operating activities.

 Investing activities.

 Financial activities.
m The term ³contingencies´ used in this Statement is restricted to
conditions or situations at the balance sheet date, the financial
effect of which is to be determined by future events which may or
may not occur.

m The accounting treatment of a contingent loss is determined by the


expected outcome of the contingency

m Events which occur between the balance sheet date and the date
on which the financial statements are approved, may indicate the
need for adjustments to assets and liabilities as at the balance sheet
date or may require disclosure..
m
  
m The following terms are used in this Statement with the
meanings-
m Ordinary activities
m Extraordinary items
m Prior period items
u |ccounting policies

m This Statement deals with, among other matters, the disclosure of


certain items of net profit or loss for the period. These disclosures
are made in addition to any other disclosures required by other
Accounting Standards
ë O   
 
       
    loss of
value of a depreciable asset arising from use, effluxion of time through
technology and market changes.

m O           

 


 
  other
amount substituted for historical cost in the financial statements, less the
estimated residual value.

m The method of depreciation is applied consistently to provide comparability


of the results of the operations of the enterprise from period to period.
m Accounting Standard (AS) 8, |  

  O    
  
  |   |


 becoming
mandatory for respective enterprises.
m    
 

   
   
  

  arising in the course of the ordinary activities of an
enterprise from the sale of goods, from the rendering of services,
and from the use by others of enterprise resources yielding interest,
royalties and dividends.

m This Statement deals with the bases for recognition of revenue in


the statement of profit and loss of an enterprise.
m Fixed assets often comprise a significant portion of the total assets
of an enterprise, and therefore are important in the presentation of
financial position.

m The cost of a fixed asset should comprise its purchase price and any
attributable cost of bringing the asset to its working condition for its
intended use.

m Fixed asset should be eliminated from the financial statements on


disposal or when no further benefit is expected from its use and
disposal.
m An enterprise may carry on activities involving foreign exchange in
two ways.

m This Statement does not deal with the presentation in a cash flow
statement of cash flows arising from transactions in a foreign
currency .

m |      



       
              
                 
            

m Introduction;-

m Two broad approaches may be followed for the accounting treatment of


government grants: -

m It is generally considered appropriate that accounting for government grant


should be based on the nature of the relevant grant. Grants which have the
characteristics similar to those of promoters¶ contribution should be treated
as part of shareholders¶ funds.
m Enterprises hold investments for diverse reasons. For some
enterprises, investment activity is a significant element of
operations, and assessment of the performance of the enterprise
may largely, or solely, depend on the reported results of this activity.

m For current investments, any reduction to fair value and any


reversals of such reductions are included in the profit and loss
statement.

m Long-term investments are usually of individual importance to the


investing enterprise. The carrying amount of long-term investments
is therefore determined on an individual investment basis
m This statement deals with accounting for amalgamations and the
treatment of any resultant goodwill or reserves. This statement is
directed principally to companies although some of its requirements
also apply to financial statements of other enterprises.

m In the case of an µamalgamation in the nature of purchase¶, the


balance of the Profit and Loss Account appearing in the financial
statements of the transferor company, whether debit or credit, loses
its identity.
m The objective of this Statement is to prescribe the
accounting treatment for borrowing costs.

m This Statement does not deal with the actual or


imputed cost of owners¶ equity, including preference
share capital not classified as a liability.

m Borrowing costs are capitalised as part of the cost of a


qualifying asset when it is probable that they will result
in future economic benefits to the enterprise and the
costs can be measured reliably.
m The objective of this Statement is to establish principles for reporting
financiainformation, about the different types of products and
services an enterprise produces and the different geographical
areas in which it operates.

m The requirements of this Statement are also applicable in case of


consolidated financial statements.

m |n enterprise should comply with the requirements of this


Statement fully and not selectively.
m This Statement should be applied in reporting related party
relationships and transactions between a reporting enterprise
and its related parties.

m No disclosure is required in consolidated financial statements


in respect of intra-group transactions.

m Disclosure of transactions between members of a group is


unnecessary in consolidated financial statements because
consolidated financial statements present information about the
holding and its subsidiaries as a single reporting enterprise
m This Statement should be applied by enterprises whose equity
shares or potential equity shares are listed on a recognised
stock exchange in India.

m This Statement requires an enterprise to present basic and


diluted earnings per share, even if the amounts disclosed are
negative (a loss per share).

m Basic earnings per share should be calculated by dividing the


net profit or loss for the period attributable to equity
shareholders by weighted average number of equity shares
outstanding during the period.
m This Statement should be applied in the preparation and
presentation of consolidated financial statements for a group
of enterprises under the control of a parent .

m | parent which presents consolidated financial statements


should present these statements in addition to its separate
financial statements.

m Consolidated financial statements should be prepared using


uniform accounting policies for like transactions and other
events in similar circumstances.
m This Statement should be applied in accounting for taxes on
income. This includes the determination of the amount of the
expense or saving related to taxes on income in respect of an
accounting period and the disclosure of such an amount in the
financial statements.

m This Statement does not specify when, or how, an enterprise should


account for taxes that are payable on distribution of dividends and
other distributions made by the enterprise.

m Tax expense for the period, comprising current tax and


deferred tax, should be included in the determination of the net
profit or loss for the period.
m This Statement should be applied in accounting for
investments in associates in the preparation and presentation
of consolidated financial statements by an investor.

m This Statement does not deal with accounting for investments in


associates in the preparation and presentation of separate financial
statements by an investor.
m This Statement applies to all discontinuing operations of an
enterprise.

ë A discontinuing operation may be disposed of in its entirety or


piecemeal, but always pursuant to an overall plan to discontinue the
entire component.

m The objective of this Statement is to establish principles for reporting


information about discontinuing operations.
m The objective of this Statement is to prescribe the minimum content
of an interim financial report and to prescribe the principles for
recognition and measurement in a complete or condensed financial
statements for an interim period.

m This Statement does not mandate which enterprises should be


required to present interim financial reports, how frequently, or
how soon after the end of an interim period.
m |n intangible asset is an identifiable 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.

m The definition of an intangible asset requires that an intangible asset


be identifiable.

m This Statement should not be applied to expenditure in respect


of termination benefits also.
m The objective of this Statement is to set out principles and procedures
for accounting for interests in joint ventures and reporting of joint
venture assets, liabilities, income and expenses in the financial
statements of ventures and investors.

m | venturer should disclose a list of all joint ventures and


description of interests in significant joint ventures.

[ This Statement should be applied in accounting for interests in joint


ventures and the reporting of joint venture assets, liabilities, income
and expenses in the financial statements of venturers and
investors, regardless of the structures or forms under which the
joint venture activities take place.
m The objective of this Statement is to prescribe the procedures that an
enterprise applies to ensure that its assets are carried at no more than
their recoverable amount .

m This Statement applies to assets that are carried at cost. It also applies
to assets that are carried at revalued amounts in accordance with other
applicable Accounting Standards.

m This Statement does not permit an impairment loss to be reversed for


goodwill because of a change in estimates.
m This Statement applies to financial instruments (including guarantees) that
are not carried at fair value.

m This Statement defines provisions as liabilities which can be measured only


by using a substantial degree of estimation.

m This Statement should be applied in accounting for provisions and


contingent liabilities and in dealing with contingent assets.
m xe understood the way accounting standards are created
importance of adhering to them. xe then went through the key
accounting standards.
m One can see of the each accounting standards can be read and
applied on a case to case basis.
m This indeed the need for a right attitude primary stakeholders a
proactive regulator and other institutional mechanisms intermediary
and related systems.
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