BALANCE SHEET AND PPT REPORT CORPORATE.pptx

BALANCE SHEET AND PPT REPORT

1. CORPORATE ACCOUNTING ASSIGNMENT BALANCE SHEET and PROFIT & LOSS ACCOUNT applicable under AS and Indian AS

2. Presented by :- GROUP 10 [B.Com Hons ; section-2] 10147 Piyush Pal 10148 Mayank Kumar 10149 Mohan Lal 10150 Yashika Attri 10151 Dhruv Tomar 10152 Catherine Toppo 10153 Bhavik Saini

3. TABLE OF CONTENTS :- 1.) understanding AS & Ind AS 2.) understanding Balance Sheet 3.)Balance Sheet applicable under AS vs IND AS 4.)understanding Profit & Loss Account 5.)Profit & Loss Account applicable under AS vs IND AS

4. ACCOUNTING STANDARDS vs INDIAN ACCOUNTING STANDARDS What are Accounting Standards? Accounting standards are like rules everyone agrees to follow when recording and reporting financial information. They help ensure that financial statements are clear, fair, and comparable. What are Indian Accounting Standards ( Ind AS)? Ind AS are just like accounting standards, but they're specifically for companies in India. They're based on global standards but adapted to fit Indian laws and business practices.

5. Who Follows Them? •Accounting s tandards are used all over the world, with some differences depending on where you are. • Ind AS are only for companies in India. They're mandatory for certain types of companies, making sure everyone plays by the same rules. Who Makes Them? • Different groups make accounting standards, like international boards and national bodies. • Ind AS are created and enforced by the Indian government to make sure financial reporting in India is accurate and reliable.

6. How They Compare ? • Accounting standards can vary, but they’re all about keeping financial reporting honest and consistent. • Ind AS are like a customized version of accounting standards, tailored to fit the Indian business scene while still matching global expectations. Why They Matter ? • Following accounting standards is crucial for companies to gain trust from investors and regulators. • Adhering to Ind AS is especially important for Indian companies, helping them show they're playing fair and transparently in the business world.

7. Challenges and Simplifications • Both sets of standards can be tricky to follow, but Ind AS might feel more familiar to Indian businesses since they're tailored for them. •While they might seem complex, following these standards is essential for maintaining trust and credibility in the financial world. Conclusion • Accounting Standards and Ind AS both aim for the same goal: to make financial reporting clear, fair, and trustworthy. •By following these standards, companies can build confidence and integrity in their financial statements.

8. BALANCE SHEET A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time, usually at the end of a reporting period, such as a quarter or a year. It presents a summary of a company's assets, liabilities, and shareholders' equity. The balance sheet provides valuable insights into a company’s financial health, liquidity, and solvency. It helps investors, creditors, and management assess the company’s ability to meet its obligations, manage its resources, and generate returns for shareholders

9. The balance sheet follows the accounting equation: This equation must always balance, ensuring that what the company owns is equal to what it owes plus what's left for shareholders. Components of a Balance Sheet ASSETS SHAREHOLDER’S EQUITY LIABILITIES Assets = Liabilities + Shareholders' Equity.

10. Understanding Assets • Assets are divided into two main categories: current assets and non-current assets. • Current assets are expected to be converted into cash or used up within one year, such as cash, accounts receivable, and inventory. • Non-current assets are long-term assets expected to provide benefits beyond one year, such as property, plant, equipment, and investments Understanding Liabilities • Liabilities are categorized as current liabilities and non-current liabilities. • Current liabilities are obligations due within one year, including accounts payable, short-term loans, and accrued expenses. •N on-current liabilities are long-term obligations due beyond one year, such as long-term loans and bonds payable.

11. Understanding Shareholders' Equity •s hareholders ' equity is composed of share capital and retained earnings. •S hare capital represents the amount invested by shareholders in exchange for ownership shares in the company. • Retained earnings are profits generated by the company that have not been distributed to shareholders as dividends.

12. BALANCE SHEET applicable under AS vs Ind AS BASIS AS IND AS Measurement Basis AS generally follows historical cost accounting, recording assets and liabilities at their original cost. Ind AS emphasizes fair value measurement, requiring more assets and liabilities to be valued at fair market value, especially financial instruments, investment properties, and biological assets.

13. Treatment of Financial Instruments: Financial instruments under AS are classified into categories such as held for trading, held to maturity, available for sale, or loans and receivables, with recognition and measurement criteria specified accordingly. Ind AS provides comprehensive guidelines for recognizing, classifying, and measuring financial instruments, along with enhanced disclosure requirements to address risks and uncertainties associated with such instruments. Lease Accounting: AS offers limited guidance on lease accounting, primarily focusing on distinguishing between finance and operating leases based on specific criteria. Ind AS 116 significantly changes lease accounting by requiring lessees to recognize most leases on the balance sheet as right-of-use assets and lease liabilities, ensuring a more transparent representation of lease obligations.

14. Revenue Recognition: AS provides industry-specific guidance for revenue recognition. Ind AS follows a principles-based approach outlined in Ind AS 115, focusing on recognizing revenue when control over goods or services is transferred to the customer, promoting consistency and comparability across industries. Consolidation of Subsidiaries: AS provides guidance on consolidation but may lack the depth and alignment with international standards found in Ind AS. Ind AS aligns with IFRS and offers comprehensive guidelines for consolidation, emphasizing control-based consolidation rather than ownership percentage, leading to more accurate and transparent financial reporting.

15. Presentation of Assets in schedule ||| Presentation of Liabilities in schedule |||

16. PROFIT & LOSS ACCOUNT A profit and loss account, also known as an income statement, is a financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, typically quarterly or annually. It shows whether a company made a profit or incurred a loss over that period by subtracting total expenses from total revenues. It’s a financial statement that summarizes a company’s revenues, costs, and expenses during a specific period. The P/L Account is used for several reasons like financial performance insights, comparative analysis, decision making, creditworthiness, etc.

17. Revenue: This includes all the money a company earns from its primary activities, such as sales of goods or services. It's the total income before any expenses are subtracted. Gross Profit: This is the difference between revenue and the cost of goods sold. It represents the profit a company makes from its core business operations before deducting other expenses. Expenses: These are the costs associated with running the business, including salaries, rent, utilities, materials, and other operating expenses. Cost of Goods Sold (COGS): This specifically refers to the direct costs incurred in producing goods sold by a company. It includes raw materials, labor, and manufacturing overhead.

18. Operating Expenses These are the costs incurred in the day-to-day operations of the business, such as marketing, administrative expenses, research and development, and depreciation. Other Income & Exoehs Other Income and Expenses: These are non-operating items such as interest income, interest expenses, gains or losses from the sale of assets, and other miscellaneous income or expenses. Net Profit (or Net Income): This is the final figure after subtracting all expenses, including operating and non-operating expenses, from total revenue. It represents the overall profitability of the company for the period. Operating P rofit This is the profit earned from the company’s normal business operations after deducting operating expenses from gross profit.

19. PROFIT & LOSS ACCOUNT applicable under AS vs Ind AS BASIS AS IND AS Revenue Recognition: Under AS, revenue recognition may be more conservative, often following specific criteria Ind AS may allow more flexibility in revenue recognition, it emphasizes substance over form

20. Disclosure Requirements: AS, while influenced by international standards, may not be fully converged with IFRS and may have deviations or unique requirements specific to India. Ind AS often requires more extensive disclosures compared to AS to provide users with a better understanding of the company’s financial position and performance. Treatment of Certain Items: AS may have specific rules or requirements for these items that differ from the treatment under Ind AS. Transitioning from AS to Ind AS involves specific requirements and adjustments, including restating financial statements for comparative periods, which can impact the presentation of items in the profit and loss account

21. Impact on Earnings The differences in recognition, measurement, and disclosure between AS and Ind AS can result in variations in reported earnings in the profit and loss account. Ind AS may lead to higher or lower reported earnings compared to AS, depending on the specific accounting treatments applied. Expense Recognition: AS may have stricter rules for expense recognition, with specific criteria for accruals and provisions. Ind AS may allow more judgment in expense recognition, particularly for items like provisions, contingent liabilities, and restructuring costs.

22. Income Taxes AS may have specific rules for income tax recognition and measurement, often based on timing differences between accounting profit and taxable profit. Ind AS requires the recognition of deferred tax assets and liabilities based on temporary differences, potentially leading to differences in reported tax expenses in the profit and loss account. Extraordinary Items AS may allow for the classification of certain items as extraordinary, leading to separate presentation in the profit and loss account. Ind AS generally does not permit the classification of items as extraordinary, emphasizing the presentation of items based on their nature and materiality.

23. Presentation of Profit & Loss in schedule |||

24. Thank You We’re obliged to Mrs. Sneha Suri Wadhwa and everyone present here for their valuable attention!!