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‡ | 
(  %(#  
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to the standard framework of guidelines
for financial accounting used in any given
jurisdiction; generally known as
Accounting Standards.
 
   

Conceptual Constrains Statement

Framework Assumptions Principles In Presentation
Of accounting accounting & analysis
 Financial statement
‡Balance sheet
Darious users need
‡Income statements
Financial information
‡Statement of retained earnings
‡Statement of cash flow
‡Note disclosure

The accounting
Profession attempted to Generally accepted
Develop a set of standards Accounting
That are generally Principles
Accepted and universally
practiced
r   
‡ ioment in time ‡ Period of time
1. Assets 1. Revenue
2. Liabilities 2. Expenses
3. Equity 3. Gains
4. Losses
 Objectives of financial reporting

Qualitative Elements
Characteristic Of
Of accounting Financial
Information Statements

Operating guidelines

Assumptions Principles
   



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‡ Current liabilities
‡Current assets ‡ Long term liabilities
‡Long term investments ‡ Stock holders equity
‡Property plant & equipment
     
he multiple step income statement
generally includes the following

‡Sales revenue
‡Cost of goods
‡Operating
‡Other revenues & gains
‡Other expenses & losses
Two additional items are
‡ Income tax expense
‡Earnings per share
Earnings per share =
Net Income/ No of common share
outstanding
    
‡ hree major characteristic are generally
used

1. Liquidity
2. Profitability
3. Solvency
  
 
‡ Liquidity

current asset/current liabilities = current

ratio

current asset ² current liabilities= working

capital
  

‡ Profitability ratio : ieasures the income or

operating success of a company for a
given period of time

    

‡ Net income/Net sales = Profit margin
percentage
‡ Net income/otal asset = Return on
assets
( his indicate the overall measure of
profitability)
‡ Net income/common equity = Return on
common stock
holders equity
  

‡ Solvency : ieasures the ability of an

enterprise to survive over a long period of
time

Debt to total asset ratio = otal debt/otal

assets
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Standards, Interpretations and the
Framework (1989) adopted by the
International Accounting Standards Board
(IASB).
   
‡ apital iarkets

‡ Regulatory requirements

‡ Internal controls

‡ Performance evaluation
  

‡ Principles based high quality global

standards

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he body which oversees the International Accounting Standards Board.
‡ m  

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he body which sets International Financial Reporting Standards (IFRS)
and approve interpretations
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that have not yet been addressed by standards.
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insight into costs and benefits of projects.
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A statement of financial
position
A statement of comprehensive
income
Statements of change in
equity

ash flow statement

Notes
   
‡ Approximately 100 China Similar to IFRS
(effective for
countries have listed entities
2007)
adopted or are in the
Brazil 20!0
process of adoption Russia Currently
‡ Status of adoption by applicable for
banks.
some countries which South Korea 20!!
compete with India

SA 20!!!
for capital allocation:

K 200

Nepal 20!! (as per action

plan released)
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 Convergence Project in India

‡ In October 2007, ICAI issued concept paper

giving the approach and roadmap for
convergence
‡ Darious study groups have been formed
‡ The convergence exercise will be taken up
in phases - listed and bigger companies
initially, smaller public companies thereafter,
and eventually all private companies
 # 
‡ Preface to International Financial Reporting
Standards
‡ Framework for the Preparation and
Presentation of Financial Statements
 $  %
‡ IFRS 1 First-time Adoption of International
Financial Reporting Standards
‡ IFRS 2 Share-based Payment
‡ IFRS 3(2008) Business ombinations
 $  %
‡ IFRS 4 Insurance ontracts
‡ IFRS 5 Non-current Assets Held for Sale
and Discontinued Operations
‡ IFRS 6 Exploration for and Evaluation of
iineral Resources
‡ IFRS 7 Financial Instruments: Disclosures
 $  %
‡ IFRS 8 Operating Segments
‡ IFRS 9 Financial Instruments - Assets
 $  %
‡ IAS 1(2007) Presentation of Financial
Statements
‡ IAS 2 Inventories
‡ IAS 7 Statement of ash Flows
‡ IAS 8 Accounting Policies, hanges in
Accounting Estimates and Errors
 $  %
‡ IAS 10 Events after the Reporting Period
‡ IAS 11 onstruction ontracts
‡ IAS 12 Income axes
‡ IAS 16 Property, Plant and Equipment
$  %
‡ IAS 17 Leases
‡ IAS 18 Revenue
‡ IAS 19 Employee Benefits
‡ IAS 20 Accounting for Government
Grants and Disclosure of Government
Assistance
 $  %
‡ IAS 21 he Effects of hanges in Foreign
Exchange Rates
‡ IAS 23 Borrowing osts
‡ IAS 24 Related Party Disclosures
‡ IAS 26 Accounting and Reporting by
Retirement Benefit Plans
 $  %
‡ IAS 27(2008) onsolidated and Separate
Financial Statements
‡ IAS 28 Investments in Associates
‡ IAS 29 Financial Reporting in
Hyperinflationary Economies
‡ IAS 31 Interests in Joint Ventures
 $  %
‡ IAS 32 Financial Instruments:
Presentation
‡ IAS 33 Earnings per Share
‡ IAS 34 Interim Financial Reporting
‡ IAS 36 Impairment of Assets
‡ IAS 37 Provisions, ontingent Liabilities
and ontingent Assets
 $  %
‡ IAS 38 Intangible Assets
‡ IAS 39 Financial Instruments: Recognition
and ieasurement
‡ IAS 40 Investment Property
‡ IAS 41 Agriculture
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