AN OVERVIEW OF

FINANCIAL ACCOUNTING
ACCOUNTING
STANDARDS
-BY PROF. TASNEEM

A breakdown of AS &
Ind AS and its
importance
 1 GAURAV VATYANI - HRBAF275

2 NANDINI VERMA - HRBAF276

G35 3 ADITYA VIJAY - HRBAF277

SLE - FYBAF 4 ATHARV VIJAYVARGIYA - HRBAF278

FINANCIAL ACCOUNTING 5 PARSHVI VOHERA - HR BAF28

6 EKTA VORA - HRBAF279

7 HEET VORA - HRBAF281

8 282
FIRSTLY,
WRITTEN DOCUMENTS /
WHAT ARE FRAMEWORKS BEHIND FINANCIAL
ACCOUNTING
ACCOUNTING
STANDARDS ? TO STANDARDIZE THE DIFFERENT
ACCOUNTING PRACTICES
FOLLOWED BY DIFFERENT
ACCOUNTING FIRMS

COVERS ASPECTS OF
• Recognition
GAAP, IFRS, IND AS ARE THE
• Treatment ACCOUNTING STANDARDS
• Measurement
• Disclosure 2
NEED FOR
ACCOUNTING
A COMPANY'S PRIORITY

STANDARDS

UNIFORMITY COMPARABILITY AVOIDS FRAUDS INCREASED RELIABILITY

Reduces differences in Helps assessing business Protecting Investors The different users of financial
application performance statements rely on it
 What does IND AS mean ?
Adoption or Convergence to IFRS?

GROWING need for global accountng
standards has been recognized by India.
The ICAI decided not to adopt IFRS the
way they are but modifying as per indian
environment.
In simple terms, Indian accounting
standards came into existence to meet the
requirements of IFRS.
IND AS is the convergence to IFRS.
ADOPTION means that the country
implements IFRS in the same manner
with 100% same guidelines as issued by
the iasb.
CONVERGENCE means alignment of
the country's AS in the direction 0f IFRS.
Area IND-AS AS

TERM IFRS converged Indian Accounting

Standards(Ind AS). Section 133 of the
Existing Accounting Standards under
Companies Rules, 2006
Companies Act 2013

Applicability pplicable in phases to mainly large

companies
pplicable to not only the companies, but to
other entities as well.

Conceptual or revenue recognition AS contains subjectivity at quite a few

places.
Differences

New Standards Ind-AS provide guidance on various

transactions like agriculture, business
on-Existance in AS

combinations etc.
 AS OUT OF ALLL THESE TERMS,

GAAP WHICH IS THE BIGGEST

TERMINOLOGY ?

IFRS IT IS GAAP,
IT COVERS ALL
IND AS FOUR
IND-AS 1
DISCLOSURE OF ACCOUNTING KEY FINANCIAL ASSUMPTIONS
POLICIES
The purpose of IND AS 1 is to state which Accounting Polices should be
Disclosed and In which Manner. IND AS 1 states All policies adopted should be
disclosed at one place. GOING ACCRUAL
CONCERN PRINCIPAL
FUNDAMENTAL ACCOUNTING
ASSUMPTIONS
Basic Assumptions i.e Going Concern, Consistency, Accrual Basis if followed
Special Disclosure is not required. But it should be disclosed if a fundamental
accounting assumption is not followed. CONSERVATISM REVENUE
PRINCIPLE RECOGNITION
TOOLS FOR ACCOUNTING POLICIES
• PRUDENCE
• SUBSTANCE OVER FORM
• MATERIALITY.
 IND-AS 2 VALUATION : COST/ NRV whichever is LOWER

"Valuation of Inventories"
COST OF INVENTORIES INCLUDE

A B C

PURCHASE COST COST OF OTHER COSTS

RAW CONVERSION
MATERIALS FGs • Purchase price • Costs directly related to • Only if incurred in
• Import Duty unit of Production. bringing the
• Other Taxes • Allocation of fixed and inventories in their
• Costs directly variable overheads present condition.

WIP related to
Inventories
GOODS
IND AS 8
ACCOUNTNG POLICIES, CHANGES IN ESTIMTES and ERROR

RECTROSPECTIVE
APPLICATION
Accounting Policies Prior period amounts are adjusted as if
Principles, Bases, Conventions, Rules and Practices.
the new policy had always been there.
Applied Rectrospectively.

Changes in Estimates
a)The period of the change, if the change affects that period only; b) PROSPECTIVE APPLICATION
The period of the change and future periods, if the change affects both.
Applied Prospectively.
Implementing new accounting
policies for transactions after new
Correction of Errors
accounting policies has been
The entity must correct material prior period errors retrospectively in
the first set of financial statements approved for issue after their
implemented.
discovery Rectrospectively.
THANK YOU FOR
YOUR TIME!