Individual Assignment (Financial Accounting Module)

Introduction:
The intention of this report is to study briefly the Indian Accounting Standards and their
compliance by the firms
 Maruti Suzuki (Automobile)
 Infosys (Information Technology)
 Interglobe Aviation (Aviation)

This report will also try to understand how the firms of different industrial sectors make their annual
financial statements complying with the Indian Accounting Standards.

IND AS 1 (Financial Statements)

Indigo
The annual report presented the financial Notes to the financial statement of the firm gives
statement in entirety, also presenting the Balance a complete information like certain policies
Sheet, Profit and Loss Statement, Statement of related to accounting and some explanatory
Cash Flows, Changes in Equity statement, and information, compared to the previous periods.
some notes to financial statement

Infosys
Complete view of its financial statements Notes to the financial statement of the firm gives
consisting of Balance Sheet, Profit and Loss complete information like certain policies related
statement, Statement of Cash Flows, Changes in to accounting and some explanatory information,
Equity statement and some notes to financial comparing to previous periods.
statement is provided

Maruti Suzuki
Maruti Suzuki has given the complete view of its Notes to the financial statement of the firm gives a
financial statements including Balance Sheet, PnL complete information like certain policies related
statement, Statement of Cash Flows, Changes in to accounting and some explanatory information,
Equity statement and some notes to financial compared to the previous periods.
statement

Final Observation: The firms have presented the Financial statements in line with IND-AS 1.

IND AS 115 (Revenue Recognition)


Recognition of revenue, when
there is complete transfer of
control and ownership rights of
goods and services to the
customers.
Revenue from the contracts of
customers are recognized only
when the contract is legally
enforceable, approved and
made sure that both parties will
commit to their part of the
obligations.
Measurement of revenue at a
fair value of the received
amount or which is likely to be
received
Final Observation: The firms complies with the INDAS 115 in their revenue recognition policy.
IND AS 2 (Inventory Valuation)
Inventory valuation at the
minimum of Cost or Net
Realisable value (NRV)
Indigo
Measurement at a fair value of
the received amount or which is
likely to be received
Infosys
Identification of different
performance obligations stated
in the contract and allocating
fixed transaction price for the
completion of these obligations.
Maruti Suzuki
Recognition of revenue only
when the revenue amount and
the related cost can be
measured reliably and possible
that the firm will earn a future
economic benefit.
Indigo
Inventory costs consists of total
cost of purchase and the cost of
transporting the inventories to
the final location in desired
conditions
The sale of goods and services
which is not yet serviced is
added to unearned revenue
(Current Liability)
Revenue earned from contracts
is decided by the percent-of-
completion method.
Measurement is done as costs
expended or efforts till date as a
proportion of the total costs or
efforts.
Services’ revenue recognized as
and when the services are
performed. Invoicing the extra
revenue is credited to unearned
revenue (Current Liability)
The method of weighted
average cost used to assign cost
to the inventory. The selling
price of goods less the
estimated cost of making the
sale constitutes the NRV of the
inventory
Infosys
Infosys doesn’t hold any
inventory for valuation.
Maruti Suzuki
Valuation of inventory at
minimum of Cost or Net
Realizable Value (NRV)
Final Observation: The three firms do Inventory Valuation in agreement with INDAS 2.
IND AS 16 (Property, Plant and Equipment)
Property, plant and equipment items measured at cost less the accumulated depreciation.
The cost of a PP&E item consists
of actual purchase price plus
the cost to transport the asset
to desired location and
condition.
Acquisition costs are capitalized
till the time PP&E are ready for
use.
Inventory costs consists of total
cost of purchase and cost of
transporting the inventories to
the final location in desired
conditions
Indigo
Profit or losses incurred
because of disposing off or sale
of PP&E are accounted in the
income statement.
Infosys
Any profit or losses incurred as
a result of disposing-off or sale
of PP&E are accounted in the
income statement.
The method of weighted
average cost used to assign cost
to the inventory. The selling
price of goods less the
estimated cost of making the
sale constitutes the NRV of the
inventory
Depreciation of PP&E items,
apart from rotables, spare
engine, non-aircraft
equipment ,owned aircraft and
leasehold improvements
aircraft, is done on Written
down value. Straight-line
method of depreciation used
for items of PP&E and non-
aircraft equipment.
Straight-line method of
depreciation over the estimated
useful life used for items of
PP&E and non-aircraft
equipment.

Additional costs added to the
carrying value of assets when
the economic benefits
associated with the asset are
probable to flow to the firm in
the future.
Maruti Suzuki
Any profit or losses incurred as
a result of disposing off or sale
of PP&E are accounted in the
income statement.
Straight-line method of
depreciation over the estimated
useful life used for items of
PP&E and non-aircraft
equipment.

Final Observation: The three firms perform the accounting related to PP&E are in agreement with
INDAS 16

IND AS 7 (Statement of cashflows)

Indigo
Indirect Method of preparing
cash flow statements is used ,
as directed under IND AS 7

Infosys
Indirect Method of preparing
cash flow statements is used ,
as directed under IND AS 7

Maruti Suzuki
Indirect Method of preparing
cash flow statements is used ,
as directed under IND AS 7

Final Observation: The three firms prepare the statement of cashflows in compliance INDAS 7