Indian Accounting standard_Basic Understanding

Brief of Indian Accounting standard

1. Chapter-3 Indian Accounting Standard

2. Topics Meaning and definition Objectives of accounting standard Development of accounting standard Accounting standard board Formation of accounting standard board Objectives and functions Process of setting Accounting standard Applicability of accounting standard Scope of Accounting standard List of Accounting standard

3. Meaning and Definition “Accounting standards are written statements of accounting rules and guidelines to prepare financial statements.” It is codified forms of GAAP It includes detail rules to be adopted for the treatment various items in accounting process so as to attain uniformity and consistency in internal and external reporting process. Main goal is to attain global uniformity and comparability while recording and commutating accounting information

4. Objectives of accounting standard To provide information Harmonize different accounting processes To Enhance the content

5. Development of accounting standard Malpractices and failure of business entity creates demand for standardized accounting practice Formation international body “Accounting international study group (AISG-1967) Formation of International Accounting Standard committee (IASC-1973) with main objectives: To formulate publish standards to observed in presentation of audited financial statements Improvement and harmonization of regulations, accounting standard and procedure relating to presentation of financial statement Financial Accounting Standard Board established in USA in 1973 IASC issued 47 exposure drafts and came out with 41 international accounting standard (IAS) relating to various accounting process.

6. Accounting standard Board- India ASB set up in India on April 21, 1977 for harmonizing the diverse accounting practices in India ASB Set up by Council of ICAI ICAI is member of IASC Formation of ASB Formation of ASB is fairly broad-based and ensure participation of all interested group in the standard- setting process. Apart from members from council of ICAI nominated on the ASB, The following are represented on the ASB PGN-32 [points ( i ) to (xv)]

7. Objectives and Functions of ASB To conceive of the suggestions area in which Accounting standard need to developed To formulate accounting standard To examine relevance between International Accounting Standard and IFRS with Indian Accounting standard To review the Accounting Standard and revise the same as per change in condition Provide interpretation and guidance on accounting standard To carry out such other functions related to accounting standard

8. Scope of Accounting Standard Issue of Accounting standard in conformity with provision or law, customs, usage, and business environment of the country AS cannot override the local regulation, for preparation and presentation of financial statement AS are intended to apply to only items which are material The institute will use best Endeavour to persuade the government, Appropriate authority to adopt AS to achieve uniformity Concentrate on basic matter include paragraph in bold italic and plain type Accounting standard will undergo revision and get sophistication while applying.

9. Procedure of issuing accounting standard Determination of area and list as per priority Get assistance by study group before formulating exposure draft Preparation of exposure draft by considering following points: Objective and scope of standard Definition of term used in standard Manner of application of accounting principles Presentation and disclosure requirement of accounting principles Class or enterprise to which standard will apply Date of applicability of standard Publication of exposure draft to get views and comments ASB finalize the standard after considering suggestions received and submit the same to the council of ICAI Consideration and issue of standard by council of ICAI Revision of the standard by following above mentioned process

10. Applicability of Accounting Standard Level-1 Enterprise (Conditions 1 to 8) Level-2 Enterprise ( Conditions 1 and 2) Level-3 Enterprise

11. List of Accounting standard PGN-35

12. Summery Meaning and definition Objectives of accounting standard Development of accounting standard Accounting standard board Formation of accounting standard board Objectives and functions Process of setting Accounting standard Applicability of accounting standard Scope of Accounting standard List of Accounting standard