Professional Documents
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ACCOUNTING STANDARD
Applicable for
After completing Academic & Professional Education, he has worked with Deloitte
Haskin & Sells as a chartered accountant and developed immense skills in the
practical application of various accounting standards. Finally he exposed himself
to the practice as chartered accountant and adapted to teaching accounts (the
subject he loves the most) as his career.
VISIT: HTTP://WWW.CACHIRANJEEVJAIN.COM
+91-7731007722
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City: Mobile No:
FEEDBACK ABOUT SIR’S CLASSES
Shalaka Tiwari - Shastri, Hyderabad Amit Jain, Kolkata
I have taken the classes for CA Final FR from Chiranjeev Jain Hi Students, I am CA Amit Kumar Jain, practicing in
sir and I believe he is an great teacher and a amazing mentor. Gurgaon. I am one of the old students of CA Chiranjeev
His methodology of teaching is unique, while in class there's Sir, and belong to his first CA final batch in kolkata. Today,
no concept untaught. He teaches whole heartedly and makes on Teacher's Day, I would love to convey my gratitude to
sure that you get your basics right. him for his wonderful coaching classes. The learnings
I have no other words to express this better. shared by him both related to course and related to
I will say, just join him and u will see the results !! practical life after CA, has been very useful in my journey.
CJ sir ROCKS !!!!! He is one of the best CA Final teacher in India and I
recommend all students to join him.
Navneet Singh, Hyderabad Obaid Khan, Hyderabad
When I started my journey to become a Chartered To begin with a quote "It takes a big heart to help shape
accountant, the only fear I had was will I be able to have that little minds.”
conceptual knowledge which is needed the most in a Thank You Sir, for being an Amazing faculty throughout
profession like ours.!! CA journey. Now that I completed my journey, I feel
Now after completing my CA I can tell you that starting from immensely honoured for being your student and learning
Accounts in CPT then with Accounts in IPCC and to end with the concepts precisely in a manner that helps in
Financial reporting in CA Final, the conceptual understanding application too.
of the subject which I gained from you helped me become Words might fall short to express the gratitude, for you
what I am now.. Thank you Sir once again to be available have been an Amazing teacher, mentor and a friend.
whenever asked for and help me achieve my dream of Just a small appreciation post from a student, moreover
becoming a CA. from a Fan of your ideas and teaching.
Isan Singh, Kolkata Arihant Kothari, Hyderabad
i have taken FR classes from CA Chiranjeev Jain Sir….He is Thanks to the man with great caps,a perfect guide who
best in this subject…. It’s because of Sir I get to know so much has really helped us at every point and gave his helpful
about accounts especially IND AS, hands without any complaints .. You be the best sir
I have also taken accounts from him in CA IPCC and I scored 😊😊😊
very good marks in IPCC even though I was average in It is to thankyou for those priceless teachings 😊I m really
accounts subject. He teach from base which makes easy for thankfull for all you good words that kept me motivated
average students to score high in exams. He gives through and focussed towards my goal . I feel lucky to get a place
conceptual knowledge do that students will able to write under your umbrella .. Whatever be the results your
worst paper in exams with ease. imprints will always be there sir .Thanks a lot sir !😊
Thanks sir for ur valuable teaching.
Ashutosh Lahoti, Hyderabad Niharika Phalod, Hyderabad
Thank you sir for providing us the best lectures with an ease. "A good teacher can inspire hope, ignite the imagination
It was an amazing time spending with you. I'm very lucky to and instill a love of learning"
learn the subject of Accountancy that too of IPCC level under I would truly like to appreciate the great effort you have
your guidance. You made this subject very easy with your put into tutoring and enlightening my way. Because of
experience and teaching quality. Actually your friendly your guidance and patience, I've come this far in my CA
nature towards the students made it more easier to journey. Thankyou for always being there in all my
understand the subject. Even your scoldings were like roses confusions and helping me deal with all the stress during
without thornes. ipcc days!
Thank you so much sir for helping us get through our targets. Accounts couldn't be more easier and all the credit goes
Will be missing those class fun but hope to see you soon in to your easy techniques.
CA final classes. Thankyou for being my mentor. I'm truly blessed to be
😇Proud to be CHIRANJEEVIAN 😇 your student! Wish you a very happy teachers day Sir. 😊
Nikita Simran, Hyderabad Shalaka Tiwari - Shastri, Hyderabad
I'm so grateful to be your student. Thank you for instilling in I have taken the classes for CA Final FR from Chiranjeev
me the passion for learning. You've put in selfless efforts in Jain sir and I believe he is an great teacher and a amazing
shaping our career! We're truly blessed to have a mentor like mentor.
you 😊 Lastly I would like to say-Now I see the world in a His methodology of teaching is unique, while in class
different light there's no concept untaught. He teaches whole heartedly
I can discriminate between wrong and right, I perceive things and makes sure that you get your basics right.
in a different style, I have learnt to go the extra mile, I have a I have no other words to express this better.
deeper understanding of things Dear teacher you have truly I will say,just join him and u will see the results !!
given me wings CJ sir ROCKS !!!!
Thank you for everything sir
Chinna Poojari , Bangalore Venkata Sumanth, Vijaywada
Sir,. It's very glad to have these words to you..u r d person Teachers usually make us study... Chiranjeev Jain sir
who stands with me not only as my guru but as a family made us enjoy the subject...We stepped out of the class
member during my tough times.. The way you teach us with tonnes of confidence and belief .....
makes ourself to Mold towards subject conceptually...Coz of Thank you very much sir....
u only I have got AIR's in IPCC and CMA.... Being ur student We never found in your class, a teacher- student
makes me proud...gives me confidence that I can achieve all relationship...We always felt that we are being taught by
thru success.....finally thank you is not enough for ur a best friend and well-wisher...
services...Just will show thanks in the form of results in our We will be grateful forever sir....
exams.... With tonnes of love...
Not only the subject your personality as a Chartered One word about Chiranjeevi Jain sir ....
Accountant tis the Perfect Example for all Budding CA's. You taught us from your Heart...not from book...
One word about my guru ."CA Chiranjeevi sir is the
BAADSHAH OF IND AS " in india.
Afsar Shaik, Hyderabad Chaitanya, Hyderabad
Sir...trust me...before starting of this batch....I wondered Your way of teaching is something different that we will
how ur gonna complete this in 70 days...wr as other faculies be in a thought that you are teaching slow but we’ll get to
r taking for 3 or 4 mnths....but finally I got my answer....u know your fast once we missed your class and seeing the
gave us the main thing what we want actually i.e, conceptual notes the next day. Really loved the class very much sir.
clarity....thank u soo much sir Thankuuuuu so much sir.
Ashish Soni, Hyderabad The real life stories you teaches in class are inspired. Sir,
Sir you can inspire hope, ignite the imagination, and instill a we will go through many teachers in life sir. But only few
love of learning..motivating...Thank You Sir ## CJ Sir the we can remember lifelong. You’re one among them and
Best# one you got the position with 70 days time while with
Ankitha Baldwa, Hyderabad everyone I spent not less than 2 years. Once again Thank
Thank you so much sir u be the best lecturer of my life you sir.
Apka padane ka style baat karne ka style Apki shyaris Kya Sir, I may not score 90+ in exam, But I’m sure I’ll give my
200% for getting 90+. Because we have only two options.
baat sir, missing all my memorable moments of ur class 😊
Either 90+ or 90+.
Sakshi Sharma, Hyderabad Soujanya V M, Bangalore
I have been taught by so many teachers but amongst them I have attended his classes and he is very
all you made the greatest impact by not only teaching by knowledgeable..He teaches the complex things in a very
guiding us too. The loving ways of teachers like you is simple manner...He is a good guide for a student
difference between teaching and educating thanks for ...Because of him I got exemption in IPCC
teaching us, educating us, and empowering us thanks a lot sir accounts...Students who are interested in conceptual
Khushi Srivastava, Hyderabad learning can join his classes without any second
I pursued 61 in accounting just because of Chiranjeev Jain Sir. thought...!
His notes are not less than a face to face teaching...he covers The chart prepared by him is simple and easily
each and every minute stuff...lucky to be his student. understandable...Very much useful for the students for
last minute revision...
Thank you sir for all the teaching and guidance...!!
Rakhi Jha, Hyderabad Shams Afaq, Hyderabad
#SIR Ji # THANK YOU, I joined Yeshas just because you were I have done my schooling from science stream,so at the
teaching us ACCOUNTS #Your the most coolest & friendly start of CPT only I was nervous, if I will be able to do
faculty #You always motivated us #You always guided us on accounts. But my whole nervousness was transformed
right path #Yet I can't believe that today was our last IPCC into interest of learning by Chiranjeev Sir. He created a
class # I personally never ever saw a great faculty like YOU # strong foundation for me with conceptual clarity. It was
We all gonna miss you so much #You always helped us SIR his easy going approach even when the concepts were
JI # You were just like our friend's #A BIG BIG THANK YOU SIR challenging, I scored 44/60 in CPT and then 76/100 in
JI # See you soon in CA-FINAL #WILL MISS YOU SIR JI IPCC. I will always be grateful to you. You are
#LOVE YOU TONS & TONS phenomenal. Keep up the good work!
Nithin Mundada, Hyderabad Naveen Pspk , Hyderabad
The way you teach.. The knowledge you share.. The care you Scored 75 in Accounts..its just because of Mr.CA
take..The love you shower..Makes you.. The world's best chiranjeevjain sir...initially I was bothered about DAT
sir....It's my pleasure to have such a nice sir with charming subject as I was from science background... But then I met
smile..and I have never seen such a sir like..... with sir classes it changed whole scenario ....&d result is
Jaya Chandra, Visakhapatnam dis....tq sir tq so much....
Sir's notes is very helpful during revision and he teaches from
basics on which we generally don't pay much attention. The
way he links each topic is good and he has much clarity in
how to teach complex topics.
Sweatha krishnan Praful Mallineni
Good morning sir, Hi sir. Just got done with your classes. Absolutely loved
I'm sweatha krishnan...I'm currently taking your video them. You have designed the classes in such a way that I
classes...Just now completed Financial instruments.. was able to go with the flow. The flowcharts were helpful
It was truly amazing sir...Totally enjoyed the sessions... for understanding most of the concepts. All the questions
A whole new perspective towards accounting... including ISM compiled at the end would definitely make
There was a lot of "ohh achaaa eh baath" it easy for all the students while revising.
I loved the classes totally...I couldn't hold up to the end of And not just this sir, you were also giving personal
the complete set of classes...Thankyou sooo much for attention here on WhatsApp/telegram, not all the
teaching us wonderfully...the whole chapter has been made faculties would be doing that. I remember the first time I
very simple for us...Thank you soooo much sir.. had a doubt, you personally called me and explained the
same for 25 minutes. Really great that you are able to give
Have a great day
your time to your students individually.
I would definitely be needing your help once I start
revising sir. Really confident about the subject. Thank you
so much for making your classes available in pendrive
mode sir.
Pooja A V N Sarathkumar
Dear Chiranjeev Sir, Hii sir
Thank you so much for being such an incredible teacher !!!! Today i completed all of my classes...
Your teaching style and techniques have made me Thank you very much for such a detailed
conceptually strong. It's now that I am able to solve doubts explanations
of my friends (not your students) in topics especially like You're the best teacher i have seen so far.....
'Financial instruments', I have become way more confident I have confidence that i will achieve my desired marks
than before with the inspiration, subject knowledge u given to us....
I have had a huge respect for you since CA-Inter, may be Once again iam thanking u very much sir..
that's why I chose to be your student again in CA-Final as
well. But this time, my respect for you increased a millionfold
Krishna regalla
The period of 70 days classes are golden days for us...
Thank you for being genuine. Thank you for being one of the When we are in depression for anything(even financial or
few great teachers out there!!!! personal) , we just c your class for 30 minutes.. it vil give
From a happy student !!! positive mind...
You are the first faculty ever am connected emotionally..
Sai kiran Patil Thank you sir..thank you..
You are best of best teacher.
Level of knowledge you give us for subject as well as for life T ANVESH
is very precious. Your way of explanation and giving concept Hi sir Good morning.
at highest level with so much easy is great. You give not only I have never got a chance to say this sir, But
subject lessons but also priceless life lessons which i always I am so proud to be your student and I am so lucky that I
try to imbibe in my life. was your student in Ipcc too. You are the person reason
for my strong basics in accounting.
Malegam aneesh Everything about you is so fascinating sir. Your
Thank you sir.....for your contribution....for fr subject...and commitment, Your time management,Your conceptual
for movitivating daily by your thoughts...when fr classes are clarity, your 'Unique' method of teaching, your attire,
finished I started my revision with consolidation....trust me your shayaris, Your motivation stories every thing is so
sir without any obstacle am able to solve the problems.... unique.
because of your classes...and trust me sir I can still remember The best part is you asking Questions.. making us to
the words like oh accha ye bath hai, danger etc.....I can still think.. before actually explaining the concept..
remember your voice just like in class while solving the Finally, sir a big big Thank you for making yourself Student
problems....this one thing is enough sir.....even though our friendly, and available at all times.
classes are finished but still we connected sir...and sir Love you sir.
recently two days back you are teaching fr in my dreams also
sir....this is really sir you believe or not......by the above S SUMALATHA
words I illustrated how can a BEST teacher (not teacher)
I had never seen a lecturer who motivates students on
impact the students sir.....thank once again
every day of his class and asks every day to revise....few
sir..... lecturer s will say to revise but you did the same thing
everyday ....it's really pleasure to take classes from you
sir ... thankyou so much for your support sir
Success comes only to those who believe in themselves and
are prepared to win.
Every effort has been made to avoid errors or omissions in this publication. In spite
of this, errors may creep in. Any mistake, error or discrepancy noted may be brought
to our notice which shall be taken care of in the next edition. It is notified that none
of the parties (including the authors) will be responsible for any damage or loss of
action to any one, of any kind, in any manner, therefrom. It is suggested that to avoid
any doubt the reader should cross-check all the IND AS, facts, and contents of the
publication with ICAI publication or notifications.
If you find any error including typo error, please do forward at
hello@cachiranjeevjain.com
Thanks in advance for helping us!
1.1
CONTENTS
AS-4 Contingencies and Events Occurring after Balance Sheet Date G II G II YES
AS-5 Net Profit or Loss for the period, Prior Period Items and changes G II G II YES
in Accounting Policies
AS-7 Construction Contacts G II GI YES
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1.2
APPLICABILITY OF AS
AS SMC’s & Level II entities Level III Entities
19 Certain disclosures relating to reconciliation and Same as SMC’s & Level II entities. Further
break up of minimum lease payments, minimum disclosures of accounting policy of initial
sublease payments and general descriptions are direct costs is not applicable.
not applicable
20 Diluted earnings per share (both including and Same as SMC’s & Level II entities. Further
excluding extraordinary items) is not required to information required by paragraph 48(ii) is
be disclosed. not required to be disclosed.
28 SMCs have an option to measure ‘value in use’ on Same as SMC’s & Level II entities.
the basis of reasonable estimate thereof instead
of using present value technique. Consequently, if
they exercise that option, the relevant provision of
AS 28, such as discount rate etc and the disclosure
requirements of paragraph 121(g) will not be
applicable.
29 Paragraphs 66 and 67 relating to certain Same as SMC’s & Level II entities.
disclosures not applicable
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1.3
AS – 1
DISCLOSURE OF ACCOUNTING POLICIES
Accounting Policies
Principles are methods adopted in applying such principles
Disclosure needs arise because the methods of applying the principles can vary
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1.4
AS – 2 (REVISED)
VALUATION OF INVENTORIES
Inventory valuation
(Lower of )
COMPONENTS OF COST
ASCERTAINING NRV
Cost Of Purchase
Estimated Selling Price
Cost of Conversion
Other Attributable Cost
LESS
Estimated Cost of Completion &
EXCLUSIONS
Estimated other Cost necessary to
Storage, abnormal wastage
effect the sale
Selling & Distribution Cost
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1.5
Valuation can be made individual basis or In select areas, valuation can be Group (or
item by item basis. Global) method
Disclose:
Inventory valuation Policy
Charges of policy, if any
Impact of such changes
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1.6
AS – 3 (REVISED)
CASH FLOW STATEMENTS
Direct
Gross Basis
Method
Special Attention:
Foreign Currency Transaction, Extra-ordinary items, Tax on income, Non-tax transaction,
Transaction in the nature of hedging operations
Disclosure include:
Management commentary on special areas
Reconciliation of opening and closing cash items
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1.7
AS – 4
CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET
DATE
After the Balance Sheet Date but Before approval of accounts by the Governing Body
Two Possibilities
Adjusting events – requiring adjustment of assets or liabilities
Non adjusting events
Disclosure
Nature of event
An estimate of financial effect, or a statement that such an estimate cannot be made
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1.8
AS – 5 (REVISED)
NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND
CHANGES IN ACCOUNTING POLICIES
Net Profit or Loss for Prior Period items Change in Accounting Policies
the period
Disclosure separately
Ordinary and Disclosure separately
exceptional Items – Disclosure separately
Nature and amount of
size, nature and Material effect of change
such items so that
incidence are relevant Current period
impact on CY result
to understand the Later period
can be perceived
performance Also state if impact of
Can be either above
Extraordinary Items – change is not
the line or below the
so that impact on ascertainable
line
current year result can
be perceived
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1.9
AS – 7 (REVISED)
CONSTRUCTION CONTRACTS
Specially negotiated
Construction of assets or combination of assets
If combination of assets
Inter-related, interdependent in terms of design, technology, function or
ultimate purpose.
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1.10
Disclosure
Method used to determine the contract revenue
Method used to determine the stage of completion of contract in progress
Contract revenue recognised as revenue in the period
Aggregate costs incurred and recognised profits/losses up to the reporting date;
Advances received up to the reporting date and
Amount of retentions up to the reporting date
Gross Amount due to/from customers
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1.11
AS – 9
REVENUE RECOGNITION
Revenue
Gross inflow of cash, receivables and other consideration
Yes No
Disclose
Accounting Policy – AS 1
Postponement of revenue recognition
Gross Turnover, Excise duty and Net turnover is to be disclosed separately
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1.12
AS – 10
ACCOUNTING FOR FIXED ASSET
The cost PPE is the cash price equivalent An enterprise should choose either the
at the recognition date. Cost Model or the Revaluation Model
If payment is deferred beyond normal
credit terms, the total payment - cash Apply that policy to an entire class of
price equivalent is recognised as interest PPE.
expense or capitalised as per AS 16
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1.13
Subsequent Recognition
Consider 4 possibilities
Decrease in Charged to statement of Profit
value? and Loss
Key Points:
If an item of PPE is revalued, the entire class of PPE to which that asset belongs should be revalued.
The revaluation surplus of an item of PPE may be transferred to the revenue reserves when the asset
is derecognised.
Additional depreciation on revalued amount may be transfers from revaluation surplus to the
revenue reserves and such transfer are not made through the statement of profit and loss
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1.14
Depreciation
AS 10 mandates component accounting.
A component of an item of PPE with a cost that is significant in relation to
total cost of the item is separately depreciated.
Hence, entities will need to divide the cost of an asset into significant parts,
if their useful life is different, and depreciate them separately.
Land and Building: Land has an unlimited useful life and therefore is not depreciated.
Land and buildings are separable assets and are accounted for separately, even when they are acquired
together.
However where land cannot be separated from the building, the land and building can be recognised as a
single asset
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1.15
On account of
changes in liabilities,
price adjustments,
changes in duties,
changes in initial estimates for dismantling, removing, restoration.
Accounting Treatment
If the related asset is measured using the If the related asset is measured using the
Cost model Revaluation model
If a decrease in the liability > carrying amount The adjusted depreciable amount of the asset is
of the asset under cost model- excess should be
depreciated over its useful life.
charge to profit and loss as an expense
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1.16
Disclosure
Disclose for each class of property, plant and equipment:
the measurement bases (i.e., cost model or revaluation model)
the depreciation methods used;
the useful lives or the depreciation rates used
the gross carrying amount and the accumulated depreciation (aggregated with accumulated
impairment losses) at the beginning and end of the period; and
a reconciliation of the carrying amount at the beginning and end of the period.
The financial statements should also disclose:
the existence and amounts of restrictions on title.
the amount of expenditure recognised in the course of its construction (Capital WIP);
the amount of contractual commitments for the acquisition of PPE;
theamount of compensation from third parties for items of PPE that were impaired, lost or given up
the amount of assets retired from active use and held for disposal.
If items of PPE are stated at revalued amounts, the following should be disclosed:
the effective date of the revaluation;
whether an independent valuer was involved;
the methods applied in estimating fair values of theitems;
the extent to which fair values of the items were determined directly byreference to
- observable prices in an active market or
- recent market transactionson arm’s length terms or
- other valuation techniques;and
the revaluation surplus and anyrestrictions on the distribution of the balance to shareholders.
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1.17
AS – 11 (REVISED)
THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES
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1.18
Segment 1
Carried at Carried at
Recognize as “income or
“Fair “Historical Cost”
expense” in the period
Value”
in which they arrive
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1.19
Segment 2
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1.20
Segment 3
Forward Contract
Agreement between two parties to buy or sell
Settlement at a future date
At an agreed price
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1.21
AS – 12
ACCOUNTING FOR GOVERNMENT GRANTS
Recognition criteria
Assurance of compliance of terms and conditions
Reasonable certainty of collection
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1.22
Primary Condition
Qualifying enterprise should purchase, construct or acquire
such assets
Method I No Obligation
Method II Obligation
Refund of Grant
Treated as Extraordinary Item (AS 5)
Disclose
Accounting Policy, including method of presentation
Nature and extent of recognition in financial statements, including grants given at
concessional rate or free of cost
Any contingencies after recognition is governed by AS 29.
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1.23
Refund of Grant
Depreciable Non-Depreciable
Apply first Deduct from Assets Assets
against Capital
Unamortised reserve
Government Deduct
Grant from
Capital
Charge balance Alternative II Alternative I reserve
in P&L A/c
Apply first against Apply first against
Unutilised grant Unutilised grant
Then apply Reduce the
Unamortised Capital reseve, if
Deferred any
Government For balance,
Grant . increase book
Charge balance in value of assets
P&L A/c Note: Depreciate
the revised book
value of assets
prospectively over
the remaing
useful life
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1.24
AS – 13
ACCOUNTING FOR INVESTMENTS
Investments
Asset held for earning income by way of dividend, interests and rentals for capital
appreciation
Disposal Reclassification
Adjust difference between proceeds Long term to current current to Long term
and carrying amount through P & L Take lower of cost and Take lower of cost and
Part sale – Apply average carrying “carrying amount” “Fair value”
amount
AS – 14
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1.25
AS-14
ACCOUNTING FOR AMALGAMATIONS
CONDITIONS
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1.26
Reserves Are brought into and recorded in Only statutory reserves are
the books recorded by debit to
amalgamation adjustment
Reserve account (reversed when
statutory conditions are met)
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1.27
AS – 15 (REVISED)
EMPLOYEE BENEFITS
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1.28
Segment I
Special Treatment
Earned Leave
Present obligation arises on account
Expected cost to be recognized as
of past service cost
expenses for unavailed portion of
Cost to be reliably estimated
accumulated leave
Full cost be recognized on actual basis
Casual Leave
Recognize cost as and when
employee avails (no accumulation so
no additional cost)
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1.29
Segment II
Post-Employment Benefits
Is “Actuarial or
DCP No Investment risk” shifted to Yes DBP
Employer?
No Yes
Adopt Present Value Concept
Adopt present value concept Adjust liability with the fair value of Plan asset and
Discount rate should be market yield on show not amt. is BS
govt. bonds as on BS date All attributable cost to be recognized as expenses
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1.30
Segment III
Segment IV
Termination Benefits
If benefits falls due for payment more than 12 months after BS date, benefits to be
discounted using PV concept
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1.31
AS – 16
BORROWING COSTS
Eligible Items of Borrowing Cost
BC that are directly attributable to acquisition, BC that would have been avoided if the
construction or production of Qualifying Asset expenditure on QA had not been made
(QA)
Capitalization Condition
QA will give future economic benefits
YES NO
Costs to be capitalized can be measured
reliably?
These could have been avoided but for Borrowing Is wholly or partly for expenditure
expenditure on QA incurred on QA
Capitalization rate = ‘Actual BC’ Capitalization rate = “Weighted Average of BC
Amount of BC = Actual BC (less) Income BC capitalized should not exceed actual cost
on temporary Investment incurred during the period
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1.32
AS – 17
SEGMENT REPORTING
Segment Reporting
Reporting based on multiple produces / services and operations in different geographical
areas
Basis
Location of assets
Location of customers
Segment Assets
Operating assets directly attributable Segment Liabilities
Operating assets allocated on reasonable Operating liabilities directly attributable
basis Operating liabilities allocated on
Goodwill, if directly attributable or if reasonable basis
reasonable allocated
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1.33
Identification of segments
“Dominance” Factor
Reportable Segment
Disclosure
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1.34
AS – 18
RELATED PARTY DISCLOSURES
Significant Influence
Control
More than 20% of voting power
More than 50% of voting power
Representation of the BoD
Control composition of BoD
Participation in policy making
Substantial interest in voting &
Material inter-company transaction
power to direct, by statute or
agreement Interchange of managerial personnel
Dependence on technical information
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1.35
AS – 19
LEASES
Lease
Convey right to use an asset
In return for payment or series of payments
For an agreed period of time
Includes Hire Purchase Agreements
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1.36
Disclosure
Details of leasing agreement
Accounting policy for initial direct cost
Age wise break up of Gross investment, PV of MLP
o Upto 1 year
o > 1 year ≤ 5 years
o > 5 years
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1.37
AS – 20
EARNINGS PER SHARE
EPS
Profit available to Equity shareholders (PAES) + Weighted average no. of equity
shares (WANES)
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1.38
Diluted EPS
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1.39
AS – 21
CONSOLIDATED FINANCIAL STATEMENTS
Consolidation
Parent + subsidiary = one single economic entity
Preparation Exceptions
Combine “on line by line” basis Control is intended to be temporary
Should be prepared even if activities of both Subsidiary operates under severe long
are dissimilar term restrictions
Control
< 50% of voting power
Control of composition of BoD
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1.40
Minority Interest
Consolidated Profit – Minority’s share = profit share of parent
Adjust Outstanding cumulative preference dividend of subsidiary whether provided or not
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1.41
AS – 22
ACCOUNTING FOR TAXES ON INCOME
Tax Expense
Aggregate of Current Tax and Deferred Tax
Measurement Measurement
Amount “expected” to be paid u sing Amount payable as per tax laws that have been
applicable tax rates enacted at the balance sheet date
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1.42
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1.43
AS – 23
ACCOUNTING FOR INVESTMENTS IN ASSOCIATES IN CONSOLIDATED
FINANCIAL STATEMENTS
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1.44
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1.45
AS – 24
DISCONTINUING OPERATIONS
Discontinuance accomplished
Plan is substantially complete
Plan is abandoned “Irrespective of receipt or payment”
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1.46
AS – 25
INTERIM FINANCIAL REPORTING
Interim reporting period
Shorter than full financial year
Recognition criteria
“year to date basis”
Discrete Recognition similar to annual accounts Integral
Approach Tax expenses – weighted average IT Approach
rate
Balance sheet, P & L & Cash Flow Condensed B/S, Condensed P & L,
statement Condensed CFS
Notes and explanatory statements Selected notes and explanatory
Similar to annual accounts statements
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1.47
Minimum requirement
Heading and subheadings Additional notes without Earnings per share (EPS) for
used in most recent annual which the report may be the interim period as per AS
financial misleading 20
Comparative requirement
B/S, P & L and CFS of current interim period with immediately
preceding accounting year
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1.48
AS – 26
INTANGIBLE ASSETS
SIX CONDITIONS
technical feasibility
intention to compl
ability to use or sell
existence of a marke
availability of technical, financial
resources
Reliable measure
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1.49
Method of Amortization
Based on flow of benefits
(matching concept), or
Preferred SLM – if no pattern
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1.50
AS – 27
FINANCIAL REPORTING OF INTERESTS IN JOINT VENTURES
Control Venturer
Investor
“Power of govern” operating Part of JV
Part of JV financial policies of economic
No control Has control
entity
Interest in JV
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1.51
Books of Venturer & CFS Separate financial Books of Venturer & CFS
recognize statement recognize
Asset it controls Interest – Investment Share of Asset in JCA’s
Expenses & (AS 13) Direct liabilities,
liabilities it incurs CFS expenses incurred
Share of income Jointly incurred
from JCO Report interest as per liabilities
“Proportionate Share of income from
consolidation method” JCA
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1.52
AS – 28
IMPAIRMENT OF ASSETS
Carrying Amount
Amount in B/S (less) Recoverable Amount is higher of -
Acc. Depreciation
(less)
Impairment Losses
Net Selling Price Value in use
Estimated Sales Preset value in estimated future
proceeds (less) cost of cash flows from asset + Residual
disposal price
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1.53
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1.54
AS – 29
PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
YES NO
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1.55
Measurement criteria
DO’s DON’T’S
Should be measured before tax Gains from disposal of asset are not to
Based on “best estimate”’ be considered
Risk and uncertainties to be considered Should not be discounted to PV
Future events that affect provisions Should not be recognized for future
should be reflected operating losses
To be used only for expenses for which Provision for restructuring, other than
provision was made direct cost should not be recognized
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