Accounting Standard (AS) 1

(Issued 1979)
Disclosure of Accounting Policies

 Deals with the disclosure of significant accounting policies followed

in preparing and presenting financial statements.

 Purpose is to promote better understanding of

Financial statements by establishing through an accounting standard
the disclosure of significant accounting policies and the manner in
which accounting policies are disclosed in the financial statements.

 To ensure proper understanding of financial statements, it is necessary

that all significant accounting policies should be disclosed.

Accounting Standard (AS) 2

(Originally issued in 1981, Revised 1999)
Valuation of Inventories

 A Major issue in accounting is the determination of the

Value at which inventories are carried in the financial statements
which also includes the ascertainment of cost of inventories.

 Inventories should be valued at the lower of cost and net realizable

Value.

 The cost of inventories should comprise all costs of purchase, costs of

Conversion and other costs incurred in bringing the inventories to
their Present location and condition.
 Costs of Purchase
 Costs of Conversion
 Other Costs: overheads, costs of designing products.
 Interest and other borrowing costs.
Accounting Standard (AS) 3
(Originally issued in 1981, revised 1997)
Cash Flow Statements

 The Statement deals with the provision of information about the

historical changes in cash and cash equivalents of an enterprise by
means of a cash flow statement which classifies cash flows during the
period from operating, investing and financing activities.

 Provides information that enables users to evaluate the changes in net

assets of an enterprise, its financial structure and its ability to affect
the amounts and timing of cash flows in order to adapt to changing
circumstances and opportunities.

 The cash flow statement should report cash flows during the period
classified by operating, investing and financing activities.

Accounting Standard (AS) 4

(Originally issued in 1982,Revised 1995)
Contingencies and Events Occurring After the
Balance Sheet Date
 Statement deals with the treatment in financial statements of
contingencies, and events occurring after the balance sheet date.

 Estimates are required for determining the amounts to be stated in the

Financial statements for many on-going and recurring activities of an
enterprise .

 The uncertainty relating to future events can be expressed by a range

of outcomes. This range may be presented as quantified probabilities,
but in most circumstances, this suggests a level of precision that is not
Supported by the available information .
Accounting Standard (AS) 5
(Originally issued in 1982,Revised 1997)
Net Profit or Loss for the Period, Prior Period Items
and Changes in Accounting Policies

 This statement is to prescribe the classification and disclosure of

certain items in the statement of profit and loss so that all enterprises
prepare and present such a statement on a uniform basis.

 This Statement requires the classification and disclosure of

extraordinary and prior period items, and the disclosure of certain
items, within profit or loss from ordinary activities.

 This Statement should be applied by an enterprise in presenting

profit or loss from ordinary activities, extraordinary items and prior
period items in the statement of profit and loss, in accounting for
changes in accounting estimates, and in disclosure of changes in
accounting
policies.

Accounting Standard (AS) 6

(Originally issued in 1982, Revised 1994)
Depreciation Accounting

This statement deals with depreciation accounting and applies to all

depreciable assets, except the following items to which special
considerations apply:
 forests, plantations and similar regenerative natural resources;
 wasting assets including expenditure on the exploration for and
extraction of minerals, oils, natural gas and similar non-regenerative
resources;
 expenditure on research and development;
 goodwill;
 live stock.
This statement also does not apply to land unless it has a limited
useful life for the enterprise.
Accounting Standard (AS) 7
(Originally issued in December 1983, Revised 2002)
Construction Contracts

 The objective of this statement is to prescribe the accounting

treatment of revenue and costs associated with construction
contracts.

 This Statement should be applied in accounting for construction

contracts in the financial statements of contractors.

 Construction contracts are formulated in a number of ways which, for

the purposes of this Statement, are classified as fixed price contracts
and cost plus contracts. Some construction contracts may contain
characteristics of both a fixed price contract and a cost plus contract.

Accounting Standard (AS) 8

(Revised 2002)
Accounting for Research and Development
This standard has been withdrawn consequent to the issuance of AS
26 on ‘Intangible Assets’

Accounting Standard (AS) 9

(Issued 1985)
Revenue Recognition
 The Statement is concerned with the recognition of revenue arising in
the course of the ordinary activities of the enterprise from the sale of
goods.
 This Statement does not deal with the following aspects of revenue
recognition to which special considerations apply:
 Revenue arising from construction contracts;5
 Revenue arising from hire-purchase, lease agreements;
 Revenue arising from government grants and other similar
subsidies
 Revenue of insurance companies arising frominsurance
contracts.
Accounting Standard (AS) 10
(Issued 1985)
Accounting for Fixed Assets

Financial statements disclose certain information relating to

fixed assets. In many enterprises these assets are grouped into various
categories, such as land and buildings, plant and machinery, vehicles,
furniture and fittings, goodwill, patents, trademarks and designs. This
statement does not deal with the specialised aspects of accounting for
fixed assets that arise under a comprehensive system reflecting the
effects of changing prices but applies to financial statements prepared
on historical cost basis. This statement does not deal with accounting
for the following items to which special considerations apply: forests,
plantations and similar regenerative natural resources; wasting assets
including mineral rights, expenditure on the exploration for and
extraction of minerals, oil, natural gas and similar non-regenerative
resources; expenditure on real estate development ; and livestock. This
statement does not cover the allocation of the depreciable amount of
fixed assets to future periods since this subject is dealt with in
Accounting Standard 6 on “Depreciation Accounting”.
This statement does not deal with the treatment of Government grants
and subsidies, and assets under leasing rights. It makes only a brief
reference to the capitalisation of borrowing costs and assets acquired
in an amalgamation or merger.

Accounting Standard (AS) 11

(Originally issued in 1989, Revised 2003)
The Effects of Changes in Foreign Exchange Rates

 The principal issues in accounting for foreign currency transactions

and foreign operations are to decide which exchange rate to use and
how to recognise in the financial statements the financial effect of
changes in exchange rates.

 Also deals with accounting for foreign currency transactions in the

nature of forward exchange contracts.
 This Statement does not specify the currency in which an enterprise
presents its financial statements. However, an enterprise normally uses
the currency of the country in which it is domiciled. If it uses a
different currency, this Statement requires disclosure of the reason for
using that currency. This Statement also requires disclosure of the
reason for any change in the reporting currency.

Accounting Standard (AS) 12

(Issued 1991)
Accounting for Government Grants