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IAS 2 INVENTORIES HISTORY OF IAS 2</TH< TR> September 1974 October 1975 August 1991 December 1993 1 January

1995 18 December 2003 1 January 2005 Exposure Draft E2 Valuation and Presentation of Inventories in the Context of the Historical Cost System IAS 2, Valuation and Presentation of Inventories in the Context of the Historical Cost System Exposure Draft E38 Inventories IAS 2 (1993) Inventories (revised as part of the 'Comparability of Financial Statements' project) Effective date of IAS 2 (1993) Revised version of IAS 2 issued by the IASB Effective date of IAS 2 (Revised 2003) RELATED INTERPRETATIONS
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IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine SIC 1 Consistency ± Different Cost Formulas for Inventories SIC 1 was superseded by and incorporated into IAS 2 (Revised 2003) Issues Relating to This Standard that IFRIC Did Not Add to Its Agenda SUMMARY OF IAS 2

ve of IAS 2

ective of IAS 2 is to prescribe the accounting treatment for inventories. It provides guidance for determining the cost of inventor subsequently recognising an expense, including any write-down to net realisable value. It also provides guidance on the cost form used to assign costs to inventories.

ries include assets held for sale in the ordinary course of business (finished goods), assets in the production process for sale in th y course of business (work in process), and materials and supplies that are consumed in production (raw materials). [IAS 2.6]

r, IAS 2 excludes certain inventories from its scope: [IAS 2.2]

[IAS 2. IAS 2 does not apply to the measurement of inventories held by: [IAS 2. [IAS 2. [IAS 2.10] costs of purchase (including taxes. hile the following are within the scope of the standard. transport. and minerals and mineral products. commodity brokers and dealers who measure their inventories at fair value less costs to sell.16 and 2. [IAS 2 ntory items that are not interchangeable. and handling) net of trade discounts received costs of conversion (including fixed and variable manufacturing overheads) and other costs incurred in bringing the inventories to their present location and condition Borrowing Costs identifies some limited circumstances where borrowing costs (interest) can be included in cost of inventories th e definition of a qualifying asset. IAS 2 allows the FIFO or weighted average cost formulas. provided that the results approximate actual cost. to the extent hey are measured at net realisable value (above or below cost) in accordance with well-established practices in those industries. . [IAS 2. is no longer allowed.4] ry cost should not include: [IAS 2. When such inventories are measured air value less costs to sell.work in process arising under construction contracts (see IAS 11 Construction Contracts inancial instruments (see IAS 39 Financial Instruments: Recognition and Measurement) biological assets related to agricultural activity and agricultural produce at the point of harvest (see IAS 41 Agriculture).25] The LIFO formula.18] abnormal waste storage costs administrative overheads unrelated to production selling costs oreign exchange differences arising directly on the recent acquisition of inventories invoiced in a foreign currency nterest cost when inventories are purchased with deferred settlement terms.23] ms that are interchangeable. which had prior to the 2003 revision of IAS 2. ndard cost and retail methods may be used for the measurement of cost. agricultural produce after harvest. ental Principle of IAS 2 ries are required to be stated at the lower of cost and net realisable value (NRV). changes in that value are recognised in profit or loss in the period of change. When such inventories are measured at net realisable value.17 and IAS 23. changes in fair value less costs to sell are recognised in profit or loss in the period of the change. specific costs are attributed to the specific individual items of inventory.3 producers of agricultural and forest products.9] ement of Inventories ould include all: [IAS 2.

and so on).6] Any write-down to NRV should be recognised as an expense in the period in which the write-down occurs. considered the matter relating to applicability of Accounting Standards to Small and Medium S prises (SMEs). as an alternative to disclosing cost of goods sold expense. [IAS 2. viz. work in progress. For groups o ies that have different characteristics. and so on) rather than by function (cost of goods sold. labour. A should be recognised in the income statement in the period in which the reversal occurs. When inventories are sold and revenue is recognised. supplies. at its 236th meeting.. labour costs. [IAS 2. materials. This scheme comes into effect in respect of nting periods commencing on or after 1-4-2004.36] accounting policy for inventories carrying amount. IAS 2 allows an entity to disclose operating costs recogn during the period by nature of the cost (raw materials and consumables. generally classified as merchandise.34] Recognition Revenue. which allow presentation of expenses by function or nature.34] ure d disclosures: [IAS 2. 2003. [IAS 2. Any write-down to NRV and any inventory lo recognised as an expense when they occur. addresses revenue recognition for the sale of goods. less the estimated cost of completion and the estimated costs neces the sale. Level II and Level III. Level II and Level erprises are considered as SMEs. enterprises are classified into three categories. and finished goods. IAS 2 acknowledges that some enterprises classify income statem expenses by nature (materials. other operating costs) and the amount of th change in inventories for the period). held on September 16-18. Level I. the carrying of those inventories is recognised as an expense (often called cost-of-goods-sold).25] own to Net Realisable Value the estimated selling price in the ordinary course of business. different cost formulas may be justified. r the purpose of applicability of Accounting Standards. . The classificatio depend on what is appropriate for the entity carrying amount of any inventories carried at fair value less costs to sell amount of any write-down of inventories recognised as an expense in the period amount of any reversal of a writedown to NRV and the circumstances that led to such reversal carrying amount of inventories pledged as security for liabilities cost of inventories recognised as expense (cost of goods sold).39] This is consistent with IAS 1 Presentation of Financial Statements. selling expense. [IAS 2. The criteria for different levels are given in Annexure I.me cost formula should be used for all inventories with similar characteristics as to their nature and use to the entity. The Council decided the following scheme for applicability of accounting standards to SMEs. [IAS 2. ability of Accounting Standards (with reference to Small and Medium Sized Enterprises ouncil. Accordingly.

Accounting for the Effects of Changes in Foreign Exchange Rates AS 12. All other commercial. Net Profit or Loss for the Period. Borrowing Costs AS 22. Intangible Assets i. Prior Period Items and Changes in Accounting Policies AS 6. ii. The exemptions/relaxations are decided to be provided by modifying the applicability portion of the evant accounting standards.vel I enterprises are required to comply fully with all the accounting standards. revised Standard (2002) comes into effect in respect of all contracts entered into during accounting periods commencing on or after 1-4-2003 a atory is nature from that date. v. the pre-revised AS 7 (issued 1983) is not applicable in respect of such contracts. Revenue Recognition AS 10. vi. v. The revised Standard (2003) would supersede AS 11 (1994). plicability of Accounting Standards and exemptions/relaxations for SMEs far. Valuation of Inventories AS 4. v. Accounting for Investments AS 14. except that in respect of accounting for transactions in foreign currencie ed into by the reporting enterprise itself or through its branches before the date the revised AS 11 (2003) comes into effect. the Institute has issued 29 accounting standards. x. measurement and disclosure requirements. AS 26 is mandatory in respect of expenditure incurred on intangible items during accounting periods commencing er 1-4-2004. ii. Relaxations a ovided with regard to disclosure requirements. 50 crores. becoming mandatory for the concerned enterprises. AS 11 (1994) will . Level II and Level III enterprises are fully exempted from certain accounting standards which pri down disclosure requirements. Accounting for Government Grants AS 13. ii. Disclosure of Accounting Policies AS 2. Intangible Assets. Modifications in the relevant existing accounting standards are given in Annexure II. revised AS 11 (2003) would come into effect in respect of accounting periods commencing on or after 1-4-2004 and would be mandatory in na hat date. Accounting for Amalgamations AS 15. ii. x. II and III) AS 1. Accounting for Construction Contracts 2 AS 8. and enterprises that are in the process of iss equity or debt securities that will be listed on a recognised stock exchange in India as evidenced by the board of directors' resolution in this regard. xi. ii. Accounting for Research and Development AS 9. Contingencies and Events Occurring After the Balance Sheet Date AS 5. In respect of certain other accounting standards. AS 26 is mandatory in respect of nditure incurred on intangible items during accounting periods commencing on or after 1-4-2003 for the following: Enterprises whose equity or debt securities are listed on a recognised stock exchange in India. is withdrawn from the date AS 26. Depreciation Accounting 1 AS 7 (revised 2002). Accordingly. ii. which lay down recognition. The applicability of the accounting standards and exemptions/relaxations for SMEs are as follows: counting Standards applicable to all enterprises in their entirety (Levels I. vi. Construction Contracts AS 7 (issued 1983). axations from certain disclosure requirements are given. Accounting for Retirement Benefits in the Financial Statements of Employers AS 16. ii. whose turnover for the accounting period exceeds Rs. v. Accounting for Taxes on Income AS 26. Accordingly. has been decided that no relaxation should be given to Level II and Level III enterprises in respect of recognition and measurement principles. The Effects of Changes in Foreign Exchange Rates AS 11 (revised 1994). Accounting for Fixed Assets 3 AS 11 (revised 2003). pect of all other enterprises. industrial and business reporting enterprises.

of AS 19 are not applicable to Level II and Level III enterpris AS 20. Segment Reporting AS 18. The ognition and measurement principles contained in AS 25 are also applicable only to certain Level I enterprises since only these enterprises are required by ncerned regulators to present interim financial results. (b) and (e). Interim Financial Reporting. ii. no enterprise in India is required to mply with the disclosure and presentation requirements of AS 25 unless it voluntarily presents interim financial report within the meaning of AS 25. present.nue to be applicable. would not be required to disclose diluted earnings per share and information required by paragraph 48 of AS 20. 25(a). requiring disclosure of earni per share. Financial Reporting of Interests in Joint Ventures (to the extent of requirements relating to consolidated financial statements) i. e. Related Party Disclosures AS 24. counting Standards in respect of which relaxations from certain disclosure requirements have been given to Level II and Level III enterprises: i. So far as companies are concerned. (d) and (e).Paragraph 67 is not applicable to Level II enterprises . Impairment of Assets . enterprises are not required to present interim financial report within the meaning of AS 25. ii. . Consolidated Financial Statements AS 23. i. (e) and (f). counting Standards not applicable to Level II and Level III enterprises since the relevant Regulators require compliance with them only by certain Level I 4 erprises: AS 21. v. Leases Paragraphs 22(c). Accounting for Investments in Associates in Consolidated Financial Statements AS 27. AS 29. emptions/Relaxations for SMEs counting Standards not applicable to Level II and Level III enterprises in their entirety: AS 3. Contingent Liabilities and Contingent Assets . the position is that the companies which do not fall in Level I. Earnings Per Share As regards AS 20. and 46(b). since al companies are required to apply AS 20 by virtue of the provisions of Part IV of Schedule VI to the Companies Act. ii.g. 1956.For Level II Enterprises applicable from 1-4-2006 -For Level III Enterprises applicable from 1-4-2008 25. ii. Therefore. (f) and (g).. does not require any enterprise to present interim financial report. It is applicable only if an enterprise is required or elects epare and present an interim financial report. 37(a). Discontinuing Operations. quarterly financial results required by the SEBI. Provisions. Cash Flow Statements AS 17. counting Standard applicability of which is deferred for Level II and Level III enterprises: 28. ii. diluted earnings per share and information required by paragraph 48 of AS 20 are not required to be disclosed by Level II and Lev enterprises if this standard is applicable to these enterprises because they disclose earnings per share. However.For Level I Enterprises applicable from 1-4-2004 . AS 19. in India. the recognition and measurement requirements contained in this Standard are applicable to interim ancial results. ii.Paragraphs 66 and 67 are not applicable to Level II and Level III enterprises The above relaxations are incorporated in AS 29 itself.

All commercial. which has be vered in Level I or Level II and subsequently. Turnover does not include 'other income'. here an enterprise has been covered in Level I and subsequently. Enterprises carrying on insurance business. All commercial. 10 crore at any time during t accounting period. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. until the enterprise ceases to be covered in Level I for two consecutive years. the correspo evious period figures need not be disclosed. at present. ceases to be so covered. However. Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors' resolution in this regard. . industrial and business reporting enterprises. Banks including co-operative banks. Financial institutions. but no longer qualifies for the relevant emption/relaxation in the current accounting period. All commercial. including public deposits.view of the above. industrial and business reporting enterprises having borrowings. AS 25 is not mandatorily applicable to Level II and Level III enterprises in any case. in excess of Rs. industrial and business reporting enterprises. including public deposits. l III Enterprises prises which are not covered under Level I and Level II are considered as Level III enterprises. whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. Turnover does not include 'other income'. 1 crore but not in excess of 10 crore at any time during the accounting period. industrial and business reporting enterprises having borrowings. l II Enterprises prises which are not Level I enterprises but fall in any one or more of the following categories are classified as Level II enterprises: All commercial. whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. 50 crore. in excess of Rs. 40 lakhs but does not exceed Rs. enterprise which does not disclose certain information pursuant to the above exemptions/relaxations. the relevant standards/requirements become applicable from the current period. Similar is the case in respect of an enterprise. the enterprise will not qualify for exemption/relaxation available vel II enterprises. 50 crore. at any time during the accounting period. should disclose the fact. gets covered under Level III. here an enterprise has previously qualified for any exemption/relaxation (being under Level II or Level III). are classified as Level I enterprises: Enterprises whose equity or debt securities are listed whether in India or outside India. xure I ria for classification of enterprises l I Enterprises prises which fall in any one or more of the following categories.

vi. . Cash Flow Statements e 'applicability' paragraphs of AS 3 stand modified as under: he following is the text of the revised Accounting Standard (AS) 3. ii. this accounting standard will be recommendatory in character. Enterprises whose equity or debt securities are listed whether in India or outside India. this standard is recommended for use by companies liste ecognised stock exchange and other commercial. pursuant to the above provisions. 'Changes in Financial Position'. Financial institutions. to apply this Standard. issued in June. 'Cash Flow Statements'. which. enterprise. 50 crore. here an enterprise has been covered in any one or more of the above categories and subsequently. v. odifications in AS 3. in excess of Rs. the corresponding previous perio ures need not be disclosed. issued by the Council of the Institute of Chartered Accountants o dia. ceases to be so covered. should disclose the fact. All commercial. he initial years. comes into effec pect of accounting periods commencing on or after 1-4-1997. During this period. including public deposits. e following is the text of the Accounting Standard. industrial and business reporting enterprises having borrowings. All commercial. ii. issu ne 1981. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. industrial and business enterprises in the public and private sectors. This Standard is mandatory in nature in respect of accounting periods commencing on or after 1-4-20041 for the enterprises which fall in any one ore of the following categories. Banks including co-operative banks. at any time during the accounting period: i. ii. published in the December 2000 issue of the Institute's Journal (page 65) sta hdrawn in respect of accounting periods commencing on or after 1-4-2004. This Standard supersedes Accounting Standard (AS) 3. This Standard supersedes Accounting Standard (AS) 3. this Standard becomes applicable from the current period. e enterprises which do not fall in any of the above categories are encouraged. whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. 1981.xure II fications in the relevant existing accounting standards to address the matter relating to Small and Medium Sized enterprises Modifications are indicated as strike-throughs for deletions and as underlines for additions. until the enterprise ceases to be covered in any of the above categories for two consecutive years. v. Enterprises carrying on insurance business. Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors' resolution in this regard. 'Cash Flow Statements' (revised 1997). Accordingly. Cash Flow Statements Made Mandatory'. counting Standard (AS) 3. but are not required. Turnover does not include 'other income'. does not present a cash flow statement. the announcement issued by the Co ed as 'Accounting Standard (AS) 3. 10 crore at any time durin accounting period." e above modifications come into effect in respect of accounting periods commencing on or after 1-4-2004. here an enterprise has previously qualified for exemption from application of this Standard (being not covered by any of the above categories) but no longer alifies for exemption in the current accounting period. industrial and business reporting enterprises. However. the enterprise will not qualify emption from application of this Standard. issued by the Council of the Institute of Chartered Accountants of India. 'Changes in Financial Position'. ii.

this Standard becomes applicable from the current period. Related Party Disclosures e 'applicability' paragraph of AS 18 stands modified as under: he following is the text of Accounting Standard (AS) 18. andard comes into effect in respect of accounting periods commencing on or after 1-4-2001 and is mandatory in nature. odifications in AS 18. whose turnover for the accounting period exceeds Rs. All commercial. and is mandatory in nature. 'Related Party Disclosures'. All commercial. in respect of the owing: Enterprises whose equity or debt securities are listed on a recognised stock exchange in India. This andard comes into effect in respect of accounting periods commencing on or after 1. industrial and business reporting enterprises. here an enterprise has been covered in any one or more of the above categories and subsequently. vi. issued by the Council of the Institute of Chartered Accountants of India. whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. here an enterprise has previously qualified for exemption from application of this Standard (being not covered by any of the above categories) but no longer alifies for exemption in the current accounting period. Segment Reporting e 'applicability' paragraph of AS 17 stands modified as under: he following is the text of Accounting Standard (AS) 17. However. and enterprises that are in the process of issuing equity or d curities that will be listed on a recognised stock exchange in India as evidenced by the board of directors' resolution in this regard. enterprise. comes into effect in respec . Enterprises carrying on insurance business. issued by the Council of the Institute of Chartered Accountants of India.odifications in AS 17. Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors' resolution in this regard. from that date. at any time during the accounting period: i.. pursuant to the above provisions. Banks including co-operative banks. 10 crore at any time durin accounting period. Enterprises whose equity or debt securities are listed whether in India or outside India. industrial and business reporting enterprises having borrowings. until the enterprise ceases to be covered in any of the above categories for two consecutive years. the enterprise will not qualify emption from application of this Standard. does not disclose segment information. 'Segment Reporting'. which. including public deposits. ii. e following is the text of the Accounting Standard. counting Standard (AS) 18." e above modifications come into effect in respect of accounting periods commencing on or after 1-4-2004. issued by the Council of the Institute of Chartered Accountants of India. 50 crore. ceases to be so covered. in excess of Rs. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. industrial and business reporting enterprises.2001. All other commercial. ii. 'Related Party Disclosures'. the corresponding previous perio ures need not be disclosed. 50 crores s Standard is mandatory in nature in respect of accounting periods commencing on or after 1-4-20041 for the enterprises which fall in any one or more of t owing categories. ii. e enterprises which do not fall in any of the above categories are not required to apply this Standard. Financial institutions. ii. Turnover does not include 'other income'. v. should disclose the fact. v.4.

here an enterprise has been covered in any one or more of the above categories and subsequently. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. vi. Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors' resolution in this regard. the corresponding previous perio ures need not be disclosed. this Standard becomes applicable from the current period. industrial and business reporting enterprises having borrowings. Enterprises carrying on insurance business. ii. Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors' resolution in this regard. Enterprises carrying on insurance business. including public deposits. wever.counting periods commencing on or after 1-4-2001. ii. 'Leases'. encouraged. issued by the Council of the Institute of Chartered Accountants of India. published in the April 2002 issue of the Institute's Journal (page 1242) stand hdrawn in respect of accounting periods commencing on or after 1-4-2004. the announcement issued by the Co ed as 'Applicability of Accounting Standard (AS) 18. which. an enterprise which does not fall in any of the following categories need not disclose the ormation required by paragraphs 22(c). industrial and business reporting enterprises. t uidance Note on Accounting for Leases' issued by the Institute in 1995. Financial institutions. Earlier application of this Standard is. Leases e 'applicability' paragraph of AS 19 stands modified as under: he following is the text of Accounting Standard (AS) 19. until the enterprise ceases to be covered in any of the above categories for two consecutive years. does not make related party disclosures. v. e enterprises which do not fall in any of the above categories are not required to apply this Standard. odifications in AS 19. However. ii. e following is the text of the Accounting Standard. v. ii. v. v. whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. is not applicable in respect of such assets. of this Standard: i. This Standard is mandatory in nature in respect of accounting periods commencing on or after 1-4-2004 e enterprises which fall in any one or more of the following categories. (e) and (f). ceases to be so covered. All commercial." e above modifications come into effect in respect of accounting periods commencing on or after 1-4-2004. (d) and (e). here an enterprise has previously qualified for exemption from application of this Standard (being not covered by any of the above categories) but no longer alifies for exemption in the current accounting period. 10 crore at any time durin accounting period. ii. Enterprises whose equity or debt securities are listed whether in India or outside India.2001 and is mandatory in nature from that date. Accordingly. This Standard co o effect in respect of all assets leased during accounting periods commencing on or after 1. at any time during the accounting period: i.. whose turnover for the immediately preceding accounting period on the basis of audited .4. Turnover does not include 'other income'. (f) and (g). All commercial. 37(a). respect of accounting periods commencing on or after 1-4-20041. 25(a). and 46(b). ii. Banks including co-operative banks. the enterprise will not qualify emption from application of this Standard. vi. Accordingly. Financial institutions. 50 crore. enterprise. industrial and business reporting enterprises. pursuant to the above provisions. Enterprises whose equity or debt securities are listed whether in India or outside India. Related Party Disclosures'. All commercial. (b) and (e). in excess of Rs. Banks including co-operative banks. should disclose the fact.

Financial institutions. this Standard becomes plicable. and 46(b). enterprise. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. ii. Earnings Per Share e 'applicability' paragraph of AS 20 stands modified as under: ccounting Standard (AS) 20. 25(a). v. including public deposits. Turnover does not include 'other income'. 37(a). (e) and (f). (b) and (e). Turnover does not include 'other income'. here an enterprise has been covered in any one or more of the above categories and subsequently. vi. including public deposits. Banks including co-operative banks. The following is the text of the Accounting Standard. enterprise which has neither equity shares nor potential equity shares which are so listed but which discloses earnings per share. (d) and (e) should disclose the fact. (f . Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors' resolution in this regard. should calculate and dis rnings per share in accordance with this Standard from the aforesaid date. 10 crore at any time durin accounting period. from that date. (b) and (e). e following is the text of the Accounting Standard. financial statements exceeds Rs. industrial and business reporting enterprises. respect of an enterprise which falls in any one or more of the above categories. and 46(b). in excess of Rs. of this Standard. All commercial. 'Earnings Per Share'. issued by the Council of the Institute of Chartered Accountants of India. (d) and (e). ii. v. industrial and business reporting enterprises having borrowings. in respect of counting periods commencing on or after 1-4-20041. (b) and (e). here an enterprise has previously qualified for exemption from paragraphs 22(c). However. 10 crore at any time durin accounting period. if any such enterprise does not fall in any of the following categories. until the enterprise ceases to be cov any of the above categories for two consecutive years. 25(a). Enterprises carrying on insurance business. (f) and (g). does not disclose the information required by paragraphs 22(c). All commercial." e above modifications come into effect in respect of accounting periods commencing on or after 1-4-2004. the corresponding previous period figures in respect of above paragraphs need not be disclosed. (e) and (f). the enterprise will not qualify emption from paragraphs 22(c). odifications in AS 20. industrial and business reporting enterprises having borrowings. 37(a). at any time during the accounting period. which. in excess of Rs. (f) and (g). whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. 50 crore. All commercial. ii. it need not disclose diluted earnin r share and information required by paragraph 48 of this Standard: i. here an enterprise (which has neither equity shares nor potential equity shares which are listed on a recognised stock exchange in India but which discloses . in respect of enterprises whose equity shares or potential eq ares are listed on a recognised stock exchange in India. comes into effect in respect of counting periods commencing on or after 1-4-2001 and is mandatory in nature. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. and 46(b). ii. 25(a). 50 crore. of th andard (being not covered by any of the above categories) but no longer qualifies for exemption in the current accounting period. ii. from the current period. (e) and (f).ii. in its entirety. (d) and (e). 37(a). the Standard is applicable in its irety.However. ceases to be so covered. pursuant to the above provisions. Enterprises whose equity securities or potential equity securities are listed outside India and enterprises whose debt securities (other than potential e securities) are listed whether in India or outside India.

vi." e above modifications come into effect in respect of accounting periods commencing on or after 1-4-2004. 10 crore at any time durin accounting period. Financial institutions. until the enterprise ceases to be covered in any of the above categories for two consecutive years. the enterprise will not qualify emption from application of this Standard. e enterprises which do not fall in any of the above categories are not required to apply this Standard. 'Discontinuing Operations'. here an enterprise has been covered in any one or more of the above categories and subsequently. ii. industrial and business reporting enterprises. . All commercial. pursuant to the above provisions. v. Banks including co-operative banks. rlier application is encouraged. is recommendatory in nature at present. ceases to be so covered. Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors' resolution in this regard. whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. comes into effect in respec counting periods commencing on or after 1-4-2004. in its entirety. pursuant to the above provisions. here an enterprise (which has neither equity shares nor potential equity shares which are listed on a recognised stock exchange in India but which discloses rnings per share) has previously qualified for exemption from the disclosure of diluted earnings per share and paragraph 48 of this Standard (being not cove any of the above categories) but no longer qualifies for exemption in the current accounting period. Enterprises whose equity or debt securities are listed whether in India or outside India. it should disclose the e following is the text of the Accounting Standard. the corresponding previous perio ures need not be disclosed. Turnover does not include 'other income'. does not disclose the diluted earnings per share and information required by paragraph 48. However. from t rent period.rnings per share) has been covered in any one or more of the above categories and subsequently. ceases to be so covered. ii. ii. at any time during the accounting period: i. an enterprise (which has neither equity shares nor potential equity shares which are listed on a recognised stock exchange in India but which discloses earn r share). Holding and subsidiary enterprises of any one of the above at any time during the accounting period. including public deposits. Discontinuing Operations e 'applicability' paragraph of AS 24 stands modified as under: ccounting Standard (AS) 24. ii. Enterprises carrying on insurance business.This Stand mandatory in nature in respect of accounting periods commencing on or after 1-4-20041 for the enterprises which fall in any one or more of the following egories. does not present the information relating to the discontinuing operations. issued by the Council of the Institute of Chartered Accountants of India. enterprise. the relevant corresponding previous period figures need not be disclosed. here an enterprise has previously qualified for exemption from application of this Standard (being not covered by any of the above categories) but no longer alifies for exemption in the current accounting period. The following is the text of the Accounting Standard. should disclose the fact. until the enterprise ceases to be covered in any of the above egories for two consecutive years. industrial and business reporting enterprises having borrowings. this Standard becomes applicable from the current period. in excess of Rs. However. v. All commercial. the enterprise will not qualify f emption from the disclosure of diluted earnings per share and paragraph 48 of this Standard. 50 crore. this Standard becomes applicable. which. odifications in AS 24.

for the enterprises. the footnote clarifying the implications of 'mandatory' status of an accounting standard. 10 crore at any ti during the accounting period. i. at any time during the accounting period: i. industrial and business reporting enterprises having borrowings. rlier application of the Accounting Standard is encouraged. Enterprises whose equity or debt securities are listed on a recognised stock exchange in India. ii. industrial and business reporting enterprises having borrowings including public deposits. e following is the text of the Accounting Standard. Accordingly. whose turnover for the immediately preceding accounting period on the basis audited financial statements exceeds Rs. 10 crore at any time during the accounting period. 50 crore. industrial and business reporting enterprises. 1-4-2004 . in excess of Rs. 40 lakhs but does not exceed Rs.e following is the text of the Accounting Standard. whose turnover for the accounting period exceeds Rs. s originally decided to make AS 28 mandatory in respect of accounting periods commencing on or after 1-4-2004 for the following: . Impairment of Assets e 'applicability' paragraphs of AS 28 stand modified as under: ccounting Standard (AS) 28. All commercial. published in the May 2002 issue of the Institute's Journal (page 1378) stands withdrawn in pect of accounting periods commencing on or after 1-4-2004. ii. comes into effect in respect of counting periods commencing on or after 1-4-2004. Turnover does not include 'other income'. 2 1-4-2006 . iv. vii. 50 crore respect of all other enterprises. te: In all the above modifications. iii. industrial and business reporting enterprises. vi. 3 1-4-2008 . Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors' resolution in this regard. iii. 1 b. All commercial. and is mandatory in nature from that date for the following: a. whose turnover for the immediately preceding accounting period on the basis audited financial statements exceeds Rs. for the enterprises. Enterprises carrying on insurance business. Enterprises whose equity or debt securities are listed whether in India or outside India. the announcement issued by the Co ed as 'Accounting Standard (AS) 24. odifications in AS 28. and enterprises that are in the process of iss equity or debt securities that will be listed on a recognised stock exchange in India as evidenced by the board of directors' resolution in this regard. Holding and subsidiary enterprises of any one of the above at any time during the accounting period. All commercial. 1 crore but not in excess of Rs. c. Financial institutions. Discontinuing Operations'. for the enterprises which do not fall in any of the categories in (a) above but fall in any one or more of the following categories: i. v. Holding and subsidiary enterprises of any one of the above at any time during the accounting period." e above modifications come into effect in respect of accounting periods commencing on or after 1-4-2004. will continue to appear whenever rd 'mandatory' is used for the first time as it presently appears in the respective standards. which do not fall in any of the categories in (a) and (b) above. including public deposits. issued by the Council of the Institute of Chartered Accountants of India. in excess of Rs. 50 crore. All other commercial. viii. Banks including co-operative banks." e above modifications come into effect in respect of accounting periods commencing on or after 1-4-2004. All commercial. 'Impairment of Assets'. Turnover does not include 'other income'. the Accounting Standard comes into effect in respect of accounting periods commencing on or after 1-4-2005 and is manda nature from that date. ii. which fall in any one or more of the following categories. industrial and business reporting enterprises.

whose turnover for the accounting period exceeds Rs. and enterprises that are in the process of issuing y or debt securities that will be listed on a recognised stock exchange in India as evidenced by the board of directors' resolution in this regard. it was originally decided to make AS 28 mandatory in respect of accounting periods commencing on or after 1-4-2 . pect of all other enterprises.terprises whose equity or debt securities are listed on a recognised stock exchange in India. other commercial. 50 crores. industrial and business reporting enterprises.