Professional Documents
Culture Documents
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4. Formation of a working party
5. Consultative documents
5.1 discussion paper
5.2 statement of intent
5.3 Exposure draft
6. Initial feedback to the ASC
7. Consultation Plan
8. Technical drafting
9. Involvement of the CCAB
10. Consideration of the ASC and publication of the exposure the draft
11. Exposure period
12. towards a standard
13. Finalization and issue of standard
14. Guidance notes, appendices to standards and Technical releases
15. Reviews and revision of standards
2. Resolve conflict:
Standards are the methods of resolving conflicts of interest between
various user groups.
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4. Draw Boundaries:
Accounting standards serve exactly the purpose of drawing
boundaries within which acceptable conduct lies. In the process of
formulating standards all possible methods and policies are evaluated
and examined, and those are considered acceptable are included in
accounting standards.
5. Bring Uniformity:
Accounting standards attempt to bring about uniformity in accounting
practices by putting limits on available accounting methods and
disclosure practices. Thus accounting standards play vital role in
bringing in uniformity. Uniform standards would reduce size and
costs of reporting.
6. Comparability:
Because of the existence of uniformity in accounting reports and
statements, comparability becomes very easy. Accounting standards
tend to facilitate comparison of financial information published by
business enterprises. Standards, more or less ensure reasonable
comparability.
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In 1973, International Accounting Standard committee was
established. This committee published 41 standards. In 1977,
Bangladesh got the membership of that committee. As of December
2006, 29 IAS is in circulation, out of which 27 IAS have been adopted
by ICAB as BAS.
International Accounting Standards & Standards Adopted in
Bangladesh with status.
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IAS Particulars of IAS IAS Present Title Present Status
No. No.
the balance sheet date
11 Construction contracts 09 Construction contracts Adopted latest
version
12 Income taxes 13 Income taxes Adopted original
version
13 Replaced by IAS – I 07 Presentation of current Adopted original
assets and current version since merger
liabilities with revised IAS – I
14 Reporting Financial Nil Nil
Information by segments
15 Information reflecting Nil Nil
the effects of changing
prices.
16 Property Plant and 03 Property Plant and Adopted original
Equipment Equipment version
17 Leases Nil Nil
18 Revenue Recognition 12 Revenue Recognition Adopted latest
version
19 Employee benefits Nil Nil
20 Accounting for govt. 17 Accounting for Govt. Adopted latest
grants and disclosure of grants and disclosure version
govt. assistance of govt. assistance
21 The effects of changes in 15 Nil Nil
foreign exchange rate
22 Business combinations Nil Nil
23 Borrowing cost 14 Borrowing costs Adopted Original
version
24 Related party disclosures 16 Nil Nil
25 Accounting for Consolidated financial Adopted latest
investment statements and version
accounting for
investment subsidiaries
26 Accounting and Nil Nil
reporting by retirement
benefits plants
27 Consolidated financial Financial reporting in Not applicable in the
statements and Hyper Inflationary present context of
accounting for economics Bangladesh
investment subsidiaries
28 Accounting for Nil Nil
investment in
subsidiaries
29 Financial reporting in Nil Nil
Hyper inflationary
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IAS Particulars of IAS IAS Present Title Present Status
No. No.
economics
30 Disclosure in the Nil Nil
financial statements of
Banks and similar
financial institutions
31 Financial reporting of Nil Nil
interests in joint venture
32 Financial instruments Nil Nil
disclosure and
presentation
33 Earnings per share Nil Nil
34 Interim financial Nil Nil
reporting
35 Discontinuing operations Nil Nil
36 Impairment of Assets Nil Nil
37 Provision, contingent Nil Nil
liabilities and contingent
assets.
38 Intangible assets Nil Nil
39 Financial Instruments Nil Nil
40 Investment property Nil Nil
41 agriculture Nil Nil
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IAS Under Consideration for Adoption in Bangladesh
IAS no. Particulars
14 Segment reporting
15 Information reflecting the effects of changing prices
17 Accounting for leases
19 Employee benefit
21 The effects changes foreign exchange rate
22 Business combination
24 Related party disclosures
26 Accounting and reporting by retirement benefit plans
31 Financial reporting of interests in joint ventures
32 Financial instrument disclosure and presentation
35 Discounting operation
36 Impairment of assets
Scope:
This standard shall be applied to all general purpose financial
statements prepared to all general purpose financial statements
prepared and presented in accordance with Bangladesh Financial
Reporting Standards (BFRSs) and
Bangladesh Accounting Standards (BASs)
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b. Liabilities
c. Equity
d. Income and expenses including gains and losses
e. Other changes in equity; and
f. Cash flow.
Overall considerations:
Fair Presentation and Compliance with BFRSs Financial statement
shall present fairly the financial position, financial performance and
cash flow of an entity. Fair presentation requires the faithful
representation of the effects of transactions.
Going Concern
When preparing financial statements. Management shall make an
assessment of an entity’s ability to continue as a going concern
Financial statements shall be prepared on a going concern basis
unless managements either intends to liquidate the entity or to cease
trading, or has no realistic alternative but to do so.
Accrual Basis of Accounting
An entity shall prepare its financial statements, except for cash flow
information, using the accrual basis of accounting.
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Identification of the Financial Statements:
The financial statement shall be identified clearly and distinguished
from other information in the same published documents.
Reporting Period:
Financial statements shall be presented at least annually. When an
entity’s balance sheet date chance and the annual financial
statements are presented for a period longer or shorter that one year,
and entity shall disclose, in addition to the period covered by the
financial statements:-
a. The reason for using longer or shorter period and
b. The facts that comparative amounts for the income statement,
statement of changes in equity, cash flow statement and related notes
are not entirely comparable Balance sheet (Current /Non-current
distinction)
Current Assets:
An asset shall be classified as current when it satisfies any of the any
of the following criteria.
a. It is held primarily for the purpose of being traded.
b. It is expected to be realized within twelve months after the
balance sheet date.
c. It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the balance sheet date.
All other assets shall be classified as non-current.
Current Liabilities:
A liability shall be classified as current when it satisfies any of the
following criteria:
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a. It is expected to settle in the entity’s normal operating cycle.
b. It is held primarily for the purpose of beign traded
c. It is due to be settled within twelve months after the balance
sheet date.
d. The entity does not have and unconditional for at least twelve
months after the balance sheet date.
All other liabilities shall be classified as non-current liabilities.
Income Statement
Profit or Loss for the Period
All items of income and expenses recognized in a period shall be
included in profit or loss unless a standard or interpretation require
otherwise.
As a minimum, the face of the income statement shall include line
items that present the following amounts for the period.
a. Revenue
b. Finance cost
c. Share of the profit or loss of associated and joint venture
accounted for using the equity method.
d. Tax expenses
e. Profit or loss
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accounting policies and corrections of errors recognized in
accordance with BAS 8.
Scope:
This standard applies to all inventories, except:
a. Work progress arising under construction contracts including
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directly related service contracts
b. Financial instruments; and
c. Biological assets related to agricultural activity and
agricultural produce at the point of harvest.
Definition:
The following terms are used in this standard with the meaning
specified:
Measurement of Inventories:
Inventories shall measure at the lower of cost and net realizable value;
Disclosure:
The financial statement shall disclose:
a. The accounting policies adopt in measuring inventories
including the cost formula used;
b. The total currying amount of inventories and the carrying
amount in classification appropriate to the entity.
c. The carrying amount of inventories carried at fair value less
cost to sell;
d. The amount of inventories recognized as an expenses during
the period.
e. The carrying amount of inventories pledged as security for
liabilities.
Compliance with International Accounting Standard (IAS):
Compliance with this BAS ensures compliance in all material respects
with International Accounting Standard (IAS)-2.
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Bangladesh Accounting Standrad-7
Cash Flow Statement
Objective:
Information about the cash flows of an entity is useful in providing
users of financial statements with a basis to assess the ability of the
entity to generate cash and cash equivalents and the needs to the
entity to utilize those cash flows.
Scope:
An entity shall prepare a cash flow statement in accordance with the
requirements of this standard and shall present it us an integral part
of its financial statements for each period for which financial
statements are presented.
Definition:
The following terms are used in this standard with the meaning
specified:
Cash: Comprises cash on hand and demand deposit.
Cash equivalents: are on short term, highly liquid investments that
are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Cash flows are inflows and outflows of cash and cash equivalents
Operating activities are the principal revenue producing activities of
the entity and other activities that are not investing or financing
activities.
Investing activities are the acquisition and disposal of long -term
assets and other investments not included in cash equivalents.
Taxes on Income:
Cash flow arising from taxes on income shall be separately disclosed
and shall be classified as cash flows from operating activities unless
they can be specifically identified with financing and investing
activities.
Other Disclosure:
An entity shall disclose, together with a commentary by management,
the amount of significant cash and cash equivalent balances held by
the entity that are not available for use by the group.
Objective:
The objectives of this standard is to prescribe the criteria for selecting
and changing accounting policies, together with the accounting
treatments and disclosure of changes in accounting policies, changes
in accounting estimates and correction of errors.
Scope:
This standard shall be applied in selecting and applying accounting
policies, and accounting changes for changes in accounting policies,
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changes in accounting estimates and correction of prior period errors.
Definition:
The following terms are used in this standard with the mearins
specified.
Accounting policies are the specific principles, bases, conventions
rules and practices applied by an entity in preparing and presenting
financial statements.
Disclosure:
An entity shall disclose the mature and amount of a change in an
accounting estimated that has an effect in the current period or is
expected to have an effect in future periods, except for the disclosure
of the effect on future periods when it is impracticable to estimate that
effect.
If the amount of the effect I future periods is not disclosed because
estimating it is impracticable, an entity shall disclose that fact.
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Compliance with International Accounting Standard (IAS):
Compliance with this BAS ensures compliance in all material respects
with International Accounting Standard (IAS)-8.
Scope:
This standard shall be applied in the accounting for, and disclosure of
events after the balance sheet date.
Definition:
The following terms are used in this standard with the meaning
specified:
Events after balance sheet date are those events favorable and
unfavorable that occurs between the balance sheet date and the date
when the financial statements are authorized for issue. Two types of
events can be identified:
a. Those tat provide evidence of conditions that existed at the
balance sheet date; and
b. Those that is indicative of conditions that arose after the
balance sheet date.
Compliance with International Accounting Standard (IAS):
Compliance with this BAS ensures compliance in all materials respect
with International Accounting Standard (IAS)-10.
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Bangladesh Accounting Standard-11
Construction Contracts
Objective:
The objective of this standard is to prescribe the accounting treatment
of revenue and cost associated with construction contracts.
Scope:
This standard shall be applied in accounting for construction
contracts in the financial statements of contractors.
Definition:
The following terms are used in this standard with the meaning
specified.
Disclosure:
An entity shall disclose
a. The amount of contract revenue recognized as revenue in
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period;
b. The methods used to determine the contract revenue recognized
in the period; and
c. The methods used to determine the stage of completion of
contracts in progress.
Scope:
This standard shall be applied in accounting for income taxes.
Definition:
The following terms are used in this standard with the meaning
specified.
Accounting profit is or loss for a period before deduction tax expense.
Taxable profit is the profit for a period determined in accordance with
the rules established by the taxation authorities, upon which income
taxes are payable.
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Deferred tax liabilities are the amounts of income taxes payable in
future periods in respect of taxable temporary differences.
Objective:
The objective of this standard is to establish principles for reporting
financial information by segment- information about the different
types of products and services an entity produces and the different
geographical areas in which it operates to help users of financial
statements:
a. Better understand the entity’s past performance;
b. Better assess the entity’s risks and returns; and
c. Make more informed judgments about the entity as a whole.
Scope:
This standard shall be applied in complete sets of published financial
statements that comply with Bangladesh Financial Reporting
Standards.
Definition:
Definitions of Business Segment and Geographical Segment:
A business segment is a distinguishable component of an entity that
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is engaged in providing an individual product or service of a group of
related products or services and that is subject to risks and returns
that are different from those of the business segments. Factors that
shall be considered n determining whether products and services are
related include:
a. The nature of the products or services;
b. The nature of the production processes ;
c. The type or class of customer for the products or services; etc.
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of the same entity.
Segment liabilities are those operating liabilities that result from the
operating activities of a segment and that either is directly attributable
to the segment of can be allocated to the segment on a reasonable
basis.
Definition:
The following terms are used in this standard with the meanings
specified:
Carrying amount is the amount at which an asset is recognized after
deducting any accumulated depreciation and accumulated
impairment losses.
Depreciable amount is the cost of an asset, or other amount
substituted for cost, less its residual value.
Fair value is the amount for which an asset could be exchanged
between knowledgeable, willing parties in an arm’s length transaction.
Scope:
This standard shall be applied in accounting for all leases other than:
a) Leases to explore for or use minerals, oil, natural gas and
similar non-regenerative resources; and
b) Licensing agreements for such items as motion picture film,
video recordings, plays, manuscripts, patents and copyrights.
However, this standard shall not be applied as the basis of
measurement for:
a. Property held is lessees that are accounted for as investment
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property.
b. Investment property provided by lessors under operating
leases.
c. Biological assets hald by lessees under finance leases.
d. Biological assets provided by lessors under operating leases.
Definitions:
The following terms are used in this standard with the meanings
specified:
A lease is an agreement whereby the lessor conveys to the lessee in
return for a payment or series of payments the right to use an asset
for an agreed period of time.
A financial lease is a lease that transfers substantially all the risks
and rewards incidental to ownership of an asset title may or may not
eventually be transferred
An operating lease is a lease other than a financial lease.
Subsequent Measurement:
Minimum lease payment shall be apportioned between the finance
charge and the reduction of the outstanding liability. The finance
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charge shall be allocated to each period during the lease term so as to
produce a constant periodic ate of interest on the remaining balance
of the liability. Contingent rents shall be charged as expenses in the
periods in which they are incurred.
Operating leases:
Lease payment under an operating lease shall be recognized as an
expense on a straight-line basis over the lease term unless another
systematic basis is more representative of the time pattern of the
user’s benefit.
Subsequent Measurement:
The recognition of finance income shall be based on a pattern
reflecting a constant periodic rate of return on the lessor’s net
investment in the finance lease.
Operating leases:
Lease income from operating leases shall be recognized in income on a
straight-line basis over the lease term, unless another systematic
basis is more representative of the time pattern in which use benefit
derives from the leased asset is diminished.
Scope:
This statement shall be applied in accounting for revenue arising from
the following transactions and events:
a) The sale of goods
b) The rendering of services and
c) The use by other of entity assets yielding interest, royalties and
dividends.
Definitions:
Revenue is the gross inflow of economic benefits during the period
arising in the course of the ordinary activities of an entity when those
inflows result in increases inequity other than increases relating to
contributions from equity participants
Measurement of Revenue:
Revenue shall be measured at the fair value of the consideration
received or receivable.
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Sale of Goods:
Revenue from the sale of goods shall be recognized when all the
following conditions have been satisfied:
a) The entity has transferred to the buyer the significant risks and
rewards of ownership of the goods.
b) The amount of revenue can be measured reliably
c) It is probable that the economic benefits associated with the
transaction will flow to the entity; and
d) The costs incurred or to be incurred in respect of the
transaction can be measured reliably.
Rendering of Services:
The outcome of a transaction can be estimated reliably when all the
following conditions are satisfied:
a. The amount of revenue can be measured reliably
b. It is probable that the economic benefits associated with
the transaction will flow to the entity
c. The stage of completion of the transaction at the balance
sheet data can be measured reliably and
d. The cost incurred for the transaction and the costs to
complete the transaction can be measured reliably.
Disclosure:
The amount of each significant category of revenue recognized during
the period including revenue arising from:
I. The sale of goods.
II. The rendering of services
III. Interest
IV. Royalties
V. Dividends
Compliance with International Accounting Standards (IAS)
Compliance with this BAS ensures compliance in all material respects
with International Accounting Standard (IAS)-18.
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Bangladesh Accounting Standard-19
Employee Benefits
Objective:
Objectives of this standard are to prescribe the accounting and
disclosure for employee benefits. The standard requires an entity to
recognize:
a. A liability when an employee has provided service in
exchange for employee benefits to be paid in the future
and
b. An expense when the entity consumers the economic
benefit arising from service provided by an employee in
exchange for employee benefits.
Scope:
c. This standard shall be applied by an employer in
accounting for all employee benefits except those to which
BFRS2 share-based payment applies.
d. Employee benefits include:
e. Short-term employee benefits.
f. Post-employment benefits.
g. Other long-term employee benefits and
h. Termination benefits.
i. Employee benefits include benefits provided to either
employees or their dependants.
Definitions:
Employee benefits are all forms of consideration given by an entity in
exchange for service rendered by employees.
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Balance Sheet:
The amount recognized as a defined benefit liability shall be the net
total of the following amounts:
a) The present value of the defined benefit obligation at the
balance sheet date.
b) Plus any actuarial gain
c) Minus any past service cost not yet recognized.
d) Minus the fair value at the balance sheet date of plan assets (If
any) out of which the obligations are to be settled directs.
Income statement:
An entity shall recognize the net total of the following amounts as
expense or income except to the extent that another standard requires
or permits their inclusion in the cost of an asset:
a) Current service cost
b) Interest cost
c) The expected return on any plan assets
d) The effect of any curtailments or settlements
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government assistance.
Definition:
The following terms are used in this standard with the meaning
specified:
Government refers to government, government agencies and similar
bodies whether local, national or international.
Government assistance is action by government designed to provide
an economic benefit specific to an entity or range of entities qualifying
under certain criteria.
Government grants are assistance by government in the form of
transfers of resources to an entity in return for past or future
compliance with certain conditions relating to the operating activities
of the entity.
Government Grants:
Government Grants, including non-monetary grants at fair value,
shall not be recognizing until there is reasonable assurance that:
a. The entity will comply with the conditions attaching to
them and
b. The grants will be deceived.
Disclosure:
The following matters shall be disclosed:
a. The accounting policy adopted for government grants
including the method of presentation adopted in the
financial statement;
b. The nature and extent of government grants recognized in
the financial statements and an indication of the forms of
government assistance from which the entity has directly
benefited: and
c. Unfulfilled conditions and the contingencies attaching to
government assistance that has been recognized.
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Compliance with International Accounting Standard (IAS)
Compliance with this BAS ensures compliance in all material respects
with International Accounting Standard (IAS) -20.
Objective:
1. An entity may carry on foreign activities in two ways. It
may have transactions in foreign currencies or it may
have foreign operations.
2. The principal issues are which exchange rate to use and
how to report the effects of changes in exchange rates in
the financial statements.
Scope:
This standard shall be applied:
a. In accounting for transactions and balances in foreign
currencies.
b. In translating the results and financial position of foreign
operations that are included in the financial statements of
the entity by consolidation proportionate consolidation or
the equity method.
c. In translating an entity’s results and financial position
into a presentation currency.
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Objectives:
The objective of this standard is to prescribe the accounting for
borrowing costs. This standard generally requires the immediate
expensing of borrowing costs.
Scope:
1. This standard shall be applied in accounting for
borrowing costs.
2. This standard does not deal with the actual or imputed
cost of equity.
3. Including preferred capital not classified as a liability.
Definition:
Borrowing costs are interest and the costs incurred by an entity in
communication with the borrowing of funds.
Disclosure:
The financial statement shall disclose:
a. The accounting policy adopted for borrowing costs
b. The amount of borrowing costs capitalize during the
period and
c. The capitalization rate to determine the amount of
borrowing costs eligible for capitalization.
Scope:
This standard shall be applied in:
a) Identifying related party relationships and transactions
b) Identifying outstanding balances between an entity and its
related parties.
c) Identifying the circumstances in which disclosure of the items
in a). and b) is required and
d) Determining the disclosures to be made about those items.
Definitions:
An investment is an asset held by an enterprise for the accretion of
wealth through distribution (Such as interest, royalties dividends and
rentals), for capital appreciation or for other benefits to the investing
enterprise such as those obtained through trading relationships.
Income statement:
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The following should be included in income:
a) Investment income arising from:
i. Interest, royalties, dividends and rentals or long-term and
current investments.
ii. Profit and losses and disposal of current investments
iii. Unrealized gains and losses on current investments
carried at market value,
iv. Reductions to market value and reversals of such
reductions required to state current investments at the
lower of cost and market value
a) Reduction of the carrying amount for other than a temporary
decline in value of long term investment and reversals of men
reductions.
Scope:
This standard shall be applied in the financial statements of
retirement benefit plans where such financial statements are
prepared.
Definitions:
The following terms are used in this standard with the meaning
specified.
Retirement benefit plans: Are arrangements whereby an entity
provides benefits for employees on or after termination of service
(either in the form of an annual income or as a lump sum) when such
benefits, or the contributions towards them, can be determined or
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estimated in advance of retirement from the provisions of a document
or from the entity’s practices.
Scope:
This standard shall be applied in the preparation and presentation of
consolidated financial statements for a group of entities under the
control of a parent.
Definitions:
The following terms are used in this standard with the meanings
specified:
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Consolidated financial statements are the financial statements of a
group presented as those of a single economic entity.
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or are classified as held for trading. With changes in fair valve
recognized in profit or loss in the period of the change.
Definitions:
The following terms are used in this standard with the meanings
specified:
An associate is an entity, including an unincorporated entity such as
a partnership. Over which the investor has significant influence and
that is neither a subsidiary nor an interest in a joint venture.
Significant influence is the power to is the power to participate in the
financial and operating policy decisions of the investee but is not
control or joint control over those policies.
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income and expenses in conformity with the bank companies act and
amendments made these to.
A bank shall present a balance sheet that groups assets and liabilities
by nature and lists them in an order that reflects their relative
liquidity.
A bank shall disclose the fair values of each class of its financial
assets and liabilities.
Definitions:
An investor in a joint venture is a party to a joint venture and does not
have joint control over that joint venture.
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Joint control is the contractually agreed sharing of control over an
economic activity, and exists only when the strategic financial and
operating decisions relating to the activity require the unanimous
consent of the parties sharing control (The ventures).
A joint venture is a contractual arrangement whereby two or more
parties undertake an economic activity that is shyecl to joint control.
A venture is a party to a joint venture and has joint control over that
joint venture.
Scope:
This standard shall be applied by entities whose ordinary shares or
potential ordinary shares are publicly traded and by entities that are
in the process of issuing ordinary shares or potential ordinary shares
in public matters.
An entity that discloses earnings per share shall calculate and
disclose earnings per share in accordance with this standard.
Definitions:
The following terms are used in this standard with the meanings
specified:
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Options, warrants and their equivalents are financial instruments that
give the holder the right to purchase ordinary shares.
An ordinary share is an equity instrument that is subordinate to all
other classes of equity instruments.
Definitions:
The following terms are used in this standard with the meanings
specified:
Interim period is a financial reporting period shorter than a full
financial year.
Interior financial report means a financial report containing either a
complete set of financial statements or a set of condensed financial
statements for an interim period.
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(a) A possible obligation that arises from past events and whose
existence will be confirmed only by the occurence or non-
occurrence of one or more uncertain future events not wholly
within the control of the entity; or
(b) A present obligation that arises from past events but is not
recognized because:
i) It is not probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation; or
ii) The amount of the obligation cannot be measured with
sufficient reliability.
A contingent asset is a possible asset that arises from past events and
whose existence will be confirmed only by the occurrence or non-
occurrence of one or more uncertain future events not wholly within
the control of the entity.
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Bangladesh Accounting Standard – 40
Investment Property
Objectives:
The objectives of this standard are to prescribe the accounting
treatment for investment property and related disclosure
requirements.
Scope:
This standard shall be applied in the recognition, measurement and
disclosure of investment properly.
Definitions:
The following terms are used in this standard with the meanings
specified:
Investment property is property (Landor building or part of a building
or both) held (by the owner or by the lessee under a finance lease ) to
earn rentals or for capital appreciation or both, rather than for:
(a) Use in the production or supply of goods or services or for
administrative purpose; or
(b) Sale in the ordinary course of business.
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Bangladesh Accounting Standard – 41
Agriculture
Objective:
The objective of this standard is to prescribe the accounting
treatment, financial statement presentation, and disclosures related to
agricultural activity.
Scope:
This standard shall be applied to account for the following when they
relate to agricultural activity:
(a) Biological assets;
(b) Agricultural produce at the point of harvest; and
(c) Government grants covered by paragraphs 34-35
Definitions:
The following terms are used in this standard with the meanings
specified:
Agricultural activity is the management by an entity of the biological
transformation of biological assets for sale, into agricultural produce,
or into additional biological assets.
Agricultural produce: is the harvest product of the entity’s biological
assets.
A biological asset is a living animal or plant.
A group of biological assets is an aggregation of similar living animals
or plants.
Harvest is the detachment of produce from a biological asset or the
cessation of a biological asset’s life processes.
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Compliance with this Bangladesh Accounting Standards (BAS)
ensures compliance in all material respects with International
Accounting Standards (IAS)-41.
IAS – 2: Inventories:
The objective of this standard is to prescribe the accounting treatment
for inventories. In Pama Oil Company Limited, Stocks of stores and
spares are valued at moving average cost where as those of stocks in
trade are valued at the lower of cost and net estimated realizable
value. So they maintain the international Accounting Standard – 2.
So in Padma Oil Company Limited maintains its stocks in compliance
with IAS – 2.
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IAS – 12: Income Taxes:
The objective of this standard is to prescribe the accounting treatment
for income taxes.
In the Padma Oil Company, current tax has been provided on the
estimated taxable profit at the ruling rate. Provision for deferred
taxation has been made under liability method considering all
temporary differences, using the tax rate enacted therewith.
So they ensure compliance in all material respects with International
Accounting Standard (IAS – 12).
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issued from time to time and for non-BPC products by company
management. Agro products are recognized as sales on dispatch of
same to the buyers.
So the company ensures compliance in all material respects with
International Accounting Standard (IAS – 18).
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determination and presentation of earnings per share so as to improve
performance comparisons between different entities in the same
reporting period and between different reporting periods for the same
entity.
The earnings per share of POCL is 35.98 in 2006 to 2007 which is
larger than that of the year 2005 – 2006.
The company ensures compliance in all material respects of
International Accounting Standard (IAS – 33).
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Conclusion:
Standard are rules, norms or yardsticks. Application, compliance and
disclosure requirements as demanded the International Accounting
Standard talks a much about issue all over the world. Compliance of
International Accounting Standard is essential for preparation and
presentation of the financial statements, reflecting therein the true
and fair financial position to protect the interest of various parties.
Compliance of IAS ensures harmonization of financial reporting
practices; this would permit the company to obtain multiple listing in
stock exchanges with less additional costs and regulatory compliance
adjustments to their financial statements. From the auditor’s report
(in annual report of Padma Oil Company Limited) and from our visit
the Padma Oil Company Limited, we see that the company adopted
the above 11 IAS & the accounts and statements in Padma Oil
Company limited are maintained within the frame work of prevalent
standards i.e. rules, guidelines. Thus we can say that compliance with
the company’s Accounting standards ensures compliance in all
material respects with International Accounting Standard.
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