ACCOUNTING By

STANDARDS Sakshi Jain

INTRODUCTION
An accounting standard is a common set of principles, standards and procedures that define
the basis of financial reporting.

In total, there are 27 accounting standards.

It is fully applicable on level 1 companies having turnover> Rs. 50crore or borrowing> Rs.10
crore. Level 2 and level 3 entities are fully exempted from certain accounting standards.

Level 2 have turnover <50cr and >40cr, and borrowings <10cr and >1cr.
LIST OF ACCOUNTING STANDARDS
AS 1, Disclosure of Accounting Policies AS 17, Segment Reporting
AS 2, Valuation of Inventories AS 18, Related Party Disclosures
AS 3, Cash Flow Statements AS 19, Leases
AS 4, Contingencies and Events Occurring After the Balance Sheet Date AS 20, Earnings Per Share (EPS)
AS 5, Net Profit or Loss for the Period, Prior Period Items and Changes in AS 21, Consolidated Financial Statements
Accounting Policies
AS 22, Accounting for Taxes on Income
AS 7, Construction Contracts
AS 23, Accounting for Investments in Associates in Consolidated Financial
AS 9, Revenue Recognition Statements
AS 10, Property, Plant and Equipment AS 24, Discontinuing Operations
AS 11, The Effects of Changes in Foreign Exchange Rates AS 25, Interim Financial Reporting
AS 12, Accounting for Government Grants AS 26, Intangible Assets
AS 13, Accounting for Investments AS 27, Financial Reporting of Interests in Joint Ventures
AS 14, Accounting for Amalgamations AS 28, Impairment of Assets
AS 15, Employee Benefits AS 29, Provisions, Contingent Liabilities and Contingent Assets
AS 16, Borrowing Costs
AS-1 DISCLOSURE OF ACCOUNTING POLICIES
These are the accounting principles that are applied in preparation and presentation
of financial statements.

Fundamental Accounting Assumptions:

Going Concern
Consistency
Accrual
AS-2 VALUATION OF INVENTORIES
Inventories means the stock of goods that is used in business operations.
It can be raw materials, WIP and finished goods.
Inventories excludes financial securities, livestock, agricultural products, WIP in trading
business.
Measurement- cost or market value which ever is lower.
Valuation- WAM or FIFO
AS-9 REVENUE RECOGNITION
Serial no. Revenue arising from Revenue is recognized when

1 Sale of goods Risk and rewards are transferred

2 Rendering of services As per the agreement- completed contract or partially completed

contract

3 Interest As per the agreement

4 Royalty Accrual basis

AS-13 ACCOUNTING FOR INVESTMENTS
Investments are held by an enterprise for earning returns on investment.

There are two types of investments- Current and Long term.

Current investments are valued at cost or market value which ever is lower.

Long term investments are valued at cost.

AS-18 RELATED PARTY DISCLOSURES
Related party includes:
Key management personnel and their relatives
Enterprises under the common control
Associate and joint venture of the entity
Persons having significant influence over the entity
Individuals having voting power.