ACCOUNTING STANDARD

ORIGIN

Institute of Chartered Accountants of

India has developed Accounting
Standards; based on the Generally
Accepted Accounting Standards
(GAAP)
OBJECTIVE

 To bring a standard to the policies.

 This will facilitate easy comparison with respect to inter-firm and
intra-firm reporting.
 APPLICABILTY OF
ACCOUNTING STANDARDS

FORM ACTIVITY PROFIT

DISCLOSURE
FINANCIAL STATEMENTS
 Income Statements

 Cash Flow Statements

 Balance Sheet

 Notes on Accounts
 Fact
Law v/s Accounting Standards

In case of contradiction between Law and Accounting Standard

LAW PREVAILS
Accounting policies means specific accounting principles and
methods of applying such principles in preparation and
presentation of financial statements
ACCOUNTING ASSUMPTIONS
 Going Concern
The going concern concept of accounting implies that the business entity will continue its operations
in the future and will not liquidate or be forced to discontinue operations due to any reason.

 Consistency
The consistency principle states that, once you adopt an accounting principle or method, continue to
follow it consistently in future accounting periods. Only change an accounting principle or method if
the new version in some way improves reported financial results

 Accrual Assumption
Under the accrual basis of accounting, expenses are matched with revenues on the income
statement when the expenses expire or title has transferred to the buyer, rather than at the
time when expenses are paid.