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Accounting Standards

Group Members:
Ajinkya Adhikari (A01)
Surhud Deshpande (A16)
Geet Donde (A19)
Nitin Jadhav (A24)
Sharad Nadgoundi (A36)
Parag Sawant (A50)
Sumit Sutar (A56)

Evolution of Accounting Standards
Types of Accounting Standards

Accounting standards are formulated by Accounting Standards

Board of ICAI
In India ,issued by ICAI on 21st April,1977
As on date the Ministry of Corporate Affairs notified 39 Indian

Accounting Standards(Ind AS)

Apply to companies on voluntary basis for the year 2015-16

and mandatory from the year 2016-17.

To remove variations in treatment of several accounting

To bring standardization in accounting process
Add reliability to the Financial statements

Evaluation of Accounting Standards:



1.AS 1 to AS 15

1979 to 1995

2.AS 16 to AS 29

2000 to 2007

3.AS 30 to AS 32

Later part of 2007

AS 21:Consolidated Financial Statements

Issued by the Council of the Institute of Chartered

Accountants of India
Came into effect in respect of accounting periods

commencing on or after 1-4-2001

An enterprise that presents consolidated financial

statements should prepare and present these statements in

accordance with this Standard.2

Objectives: AS 21
To lay down principles and procedures for

preparation and presentation of consolidated financial

Presented by a parent (also known as holding enterprise)
to provide financial information about the economic
activities of its group
To present financial information about a parent and its
subsidiary(ies) as a single economic entity
To show the economic resources controlled by the group

AS 22:Accounting for Taxes and Income

Become applicable to all listed companies w.e.f April 1,2001
Become applicable to all non-listed companies w.e.f

April 1,2001
It is a measurement standard meaning thereby involves
accounting along with disclosure.
Then onwards, there are two taxes accounted in statements:
Current Income Tax
Deferred Income Tax

Objectives: AS 22
To prescribe accounting treatment for taxes

on income
Accounting for specific period.
Focus on the need to adhere to fundamental


AS 23: Accounting for investments in

Associates in CFS
Came into effect from April 1,2002
Consolidated Financial Statement prepared by the

investor account for investments in associates in

accordance with this standard
With regard to 'Separate Financial Statements prepared
by the investor this standard does not apply.

Objectives: AS 23
The effects of investments in associates on the financial

position and operating results of a group.

General Disclosure
Investment in associates are to be listed and described as

to the proportion of ownership interest

Investments in associates should be classified as longterm investments and disclosed separately in the
consolidated balance sheet
The investor's share of the profits or losses of such
investments, should be disclosed separately in the
consolidated statement of profit and loss.

AS 24: Discontinuing operations

Came into effect on April 01,2001.
Mandatory in nature for the enterprises which fall in any one

or more of the following categories:

Enterprises whose equity or debt securities are listed whether
in India or outside India
ii. Banks including co-operative banks and FIs
iii. Enterprises carrying on insurance business
iv. Enterprises having borrowings, including public deposits, in
excess of Rs. 10 crore
. The enterprises which do not fall in any of the above categories
are not required to apply this Standard.

Objectives: AS 24
To establish principles for reporting information about

discontinuing operations
To enhance the ability of users of financial statements to
make projections of an enterprise's:
Cash flows
Earning-Generating Capacity
Financial position by segregating information about
discontinuing operations

Standard applies in:

Identifying related party relationships and transactions
Identifying outstanding balances, including commitments,

between an entity and its related parties

Identifying the circumstances in which disclosure of the

items in (a) and (b) is required

Determining the disclosures to be made about those items

AS 25:Interim Financial Reporting (IFR)

Issued by ICAI w.e.f April 01, 2002
If an enterprise is required or elects to prepare and present

an interim financial report, it should comply with this

It is not mandatory that which enterprises should be

required to present interim financial reports, how

frequently etc.

An interim financial report should include, at a minimum,

the following components:

i. condensed balance sheet
ii. condensed statement of profit and loss
iii. condensed cash flow statement
iv. selected explanatory notes.

Objectives: AS 25
To prescribe the minimum content of an interim financial

To prescribe the principles for recognition and

measurement in a complete or condensed financial

statements for an interim period.

AS 26- Intangible Assets

Issued by ICAI w.e.f April 01, 2003
No physical existence
Can not be seen or even touched
An intangible asset is an identifiable non-monetary asset without

physical substance.
Some intangible assets may be contained in or on a physical

substance such as a compact disc (in the case of computer software),

legal documentation etc.

Objectives: AS 25
To prescribe the accounting treatment for intangible assets

that are not dealt with specifically in another Standard

Specifies how to measure the carrying amount of

intangible assets and requires specified disclosures about

intangible assets

Standard does not apply to:

Intangible assets held by an entity for sale in the ordinary

course of business
Deferred tax assets
Assets arising from employee benefits
Goodwill acquired in a business combination
Assets arising from contracts with customers

AS 27: Financial Reporting of interest in Joint

Standard is mandatory in respect of separate financial

statements of an enterprise
Joint ventures are not subsidiaries, nor associates, and

hence, do not call for consolidation

Objectives: AS 27
To set out principles and procedures for accounting for

interests in joint ventures

Reporting of joint venture assets, liabilities, income and

expenses in the financial statements of venturers and


AS 28:Impairment of Assets
Mandatory for all entities to account for impairment of

Weakening of Assets value
Occurs when carrying assets more than their recoverable

Carrying cost =Cost of assets -Accumulated Depreciation

Standard does not apply to:

Assets arising from construction contracts
Deferred tax assets
Financial assets including Investments

AS 29- Provision, contingent liabilities and



It is a Liability
Settlement should result in outflow
Liability is result of obligating event
Contingent liabilities:-

Obligation arises of past event

Existence confirmed when actually occurred of uncertain future
Contingent Asset:

Arises from past events the existence of which will be confirmed only by
occurrence or non-occurrence of one or more uncertain future events

Financial Instruments
AS 30 Recognition and Measurement
AS 31 Presentation
AS 32 Disclosures
Has not been made mandatory (expected in 2009)