PRACTICAL ON SKILL

DEVELOPMENT COURSES
SEMESTER VI BCOM
Explain the structure and functions of Indian Accounting Standards
Board

Set out the procedure for issue of an Accounting Standard by the

Accounting Standards Board.

List out the financial statements in accordance with Ind AS 1 and

show the formats of the same with imaginary figures.

Explain the main provisions of Ind AS 2, Ind AS 16 and Ind AS 18

State and explain the provisions pertaining to Segment Reporting

and Related Party Disclosure under Ind AS.

Demonstrate the calculation of Minority Interest with imaginary

figures.
 Explain the structure and functions of Indian Accounting Standards Board

Accounting Standards
1977 ICAI
Board

ASB Independent body

Academicians

ASSOCHAM

Rights to publish standards FKCCI

Other Professional Bodies

Representations ICAI
 Issue standards
FUNCTIONS

OF Update standards

ACCOUNTING
Investors protection
STANDARDS

BOARD
Transparency of accounting data

Educate public on standards

Set out the procedure for issue of an Accounting Standard
by the Accounting Standards Board.

Developing Developmen
and t and
Setting up Planning the Issue of
publishing publishing
agenda project standard
research exposure
papers draft
List out the financial statements in accordance with Ind AS
1 and show the formats of the same with imaginary figures.

Statement of profit and loss

Other comprehensive income

Statement of financial position

Notes of accounts

Cash flow statement

 CORPORATE
LAW 2013

SCHEDULE
3 FORMATS

WITH IND WITHOUT

AS IND AS
 CONDENSED FORMAT OF PROFIT AND LOSS UNDER VERTICAL FORMAT

  Amount Amount
   
PARTICULARS    

A) INCOMES    

 
OPERATING INCOME    

NON OPERATING INCOME

   

   

 
TOTAL    

A) EXPENSES
   

   
COST OF GOODS SOLD    
EMPLOYEE BENEFIT EXPENSES    
DEPRECIATION AND AMORTIZATION    
FINANCE COST
 
   

OTHER EXPENSES
   

   

 
TOTAL    

PROFIT BEFORE TAX ( A-B)

   

   
PROVISION FOR TAX    
PROFIT AFTER TAX    
 FINANCIAL STATEMENTS AS PER CORPORATE LAW 2013
Figures as at the end of Figures as at the end of the
Particulars Note No. current reporting period previous reporting period
1 2 3 4

(1) ASSETS
Non-current assets
(a) Property, Plant and
Equipment
(b) Capital work-in-progress
(c) Investment Property
(d) Goodwill

(e) Other Intangible assets

(f) Intangible assets under
development
(g) Biological Assets other than
bearer plants
(h) Financial Assets
(i) Investments
(ii) Trade receivables
(iii) Loans
(iv) Others (to be specified)
(i) Deferred tax assets (net)
(j) Other non-current assets
(2) Current assets
(a) Inventories
(b) Financial Assets
(i) Investments
EQUITY AND LIABILITIES

Equity
(a) Equity Share capital
(b) Other Equity
LIABILITIES
Non-current liabilities
(a) Financial Liabilities
(i) Borrowings
(ii) Trade payables
(iii) Other financial liabilities (other
than those specified in item (b), to be
specified)
(b) Provisions
(c) Deferred tax liabilities (Net)
(d) Other non-current liabilities
Current liabilities
(a) Financial Liabilities
(i) Borrowings
(ii) Trade payables
(iii) Other financial liabilities (other
than those specified in item (c)
(b) Other current liabilities
(c) Provisions
(d) Current Tax Liabilities (Net)

Total Equity and Liabilities

 Explain the main provisions of
Ind AS 2, Ind AS 16 and Ind AS
18
IAS, IND AS 16: PROPERTY, PLANT AND EQUIPMENT
• Production or supply of goods Scope ( Does not
and services
Meaning • Used for administrative purposes include)
• Used for more than one period
Asset is held for sale
Biological assets
Extractive assets
• Accounting treatment for PPE Non renewable assets
Objective • Determine carrying amounts
s • Depreciation and impairment
losses

Satisfy Expected Measurable

definition economic life cost Recognition
 IAS, IND AS 2: INVENTORIES
• Produced for sale Scope ( Does not
• Normal course of Business
Meaning
include)

• Agricultural product
Biological assets
Extractive assets
• Accounting treatment Commodity broker
• Determine carrying Cost WIP under Construction
Objective • Determination of cost and expense
• Write down
s

Re sale in
Satisfy Measurable
same period Recognition
definition cost
 IAS, IND AS 18 : Revenue
• Gross inflow
Meaning • Ordinary course of activity Scope (includes)
• Sale of goods and service
Inflow
Nature of industry
Classification of revenue
• Accounting treatment
Objective • Revenue definition
s

Interest,
Rendering of
Sale of goods dividend and Recognition
service
royalty
 State and explain the provisions
pertaining to Segment Reporting and
Related Party Disclosure under Ind
AS.
 IAS, IND AS 24: RELATED PARTY DISCLSURE
• Related party persons Scope (include)
• Control
• Joint venture
Meaning • Significant influence •No exemption for state
• Post employment benefit plans controlled entities
• Key management personnel
•Identifies relationships
of related parties and
• Aware of financial position changes due to their balances
related parties
Objective • Prevents company from illegal or improper
activities
s

Accounting
Selection and policies
Consistency Changes
application

Control Transaction
Disclosures • Parent/subsidiary
• Separate financial statements • Controlling party
• Standalone financial statements • Senior parent
 IFRS 8, IND AS 108: OPERATING SEGMENTS
• Geographical area
• Major customers Scope (include)
Meaning • Internal management reports
• Measurement of segment information
•Debt/ Equity traded in
stock markets
•Process of filing
• Financial effects of business activity
• Economic environment
Objective • Core principles as basis for segmentation
s • Operating results

Operating Decision on
Engages Availability of
business
results resource
financial
Operating
reviewed by allocation to segments
activities information
COO segments
 Steps in implementation of operating segments

Applicability • Identify
of reporting segments

Fulfill • Quantitative
aggregate threshold
criteria
Identification • Development of
format for disclosure
of new • Development of
segment reconciliation format
Demonstrate the calculation of Minority
Interest with imaginary figures.
 Liabilities X Ltd Y Ltd
Equity share capital(Rs.100 each) 2,50,000 1,00,000
General reserve 1,20,000 -
P&L A/c 28,600 18,000
creditors 1,40,000 1,00,000
Capital reserve - 60,000
Loan from bank 50,000 -
Sundry creditors - 4,000
Bills payable (incl. Rs.1,500 to H Ltd) 23,550 4,700
 ASSETS 4,72,150 1,86,700
Building 75,000 90,000
Plant 1,20,000 54,700
Investments ( 800 shares in S Ltd.) 1,70,000 -
Stock in trade 70,000 18,000
Sundry debtors 21,000 20,000
Bank 8,450 4,000
Bills receivable ( incl.Rs.1,500 from S Ltd ) 7,700 -
  4,72,150 1,86,700

Additional information:
•Buildings of S Ltd. are found overvalued by Rs.10,000 and the plant of the same company is found
overvalued by Rs.5,000. The new values are to be incorporated.
•The balance of P&L A/c of S Ltd Rs.18,000 represents the profits earned by the company during the year
ended 31.12.2001
Compute Taxable business Income of a Proprietary concern in your
vicinity, with imaginary figures.

Compute Taxable Income and Tax Liability of any professional (Doctor

or Advocate or Chartered Accountant etc.,) with imaginary data

State the provisions for exemptions from capital gains under sections 54,
54B, 54D, 54EC and 54F.

Ascertain the ‘income from other sources’ with at least ten items of your
family / relative / friend.

Identify the various deductions eligible to be claimed by an ‘income-

earning member’ and calculate the amount of deduction under section
80.

Compute the Tax Liability of at least 3 categories of individuals in your

family / circle.
Compute Taxable business Income
of a Proprietary concern in your
vicinity, with imaginary figures.
 The following is the P/L account of Mr. Sharath for the year ending 31/12/21.
Particulars Amount Particulars Amount
To salaries 330000 By gross profit b/d 500000
To office 36000 By bad debts recovered 20000
To depreciation 28000 By dividend 6000
To GST 18000 By rent from HP 18000
To legal expense 16000 By commission 20000
To Income tax 14000 By brokerage 20000
To expense on acquisition of 24000 By sundry receipt 10000
patent right (1/2 of 48000 is
being cost of patent rights
acquired on 15/12/20)
To repairs 12000 By share of income from HUF 6000
To donations 4000    
To provision for bad debts 6000    
To general expense 24000    
To Net profit 88000    
  600000   600000

Additional information:
 Salaries paid includes Rs.12000 to workers employed at home.
 Legal expenses includes Rs. 2000 paid to lawyers with in connection with personal case.
 Out of bad debts recovered only Rs. 8000 were allowed as deduction earlier.
Compute Taxable income from business of Mr. Sharath.
 
 Computation of taxable income of business for AY 21-22 of Mr. Sharath.
Particulars Amount Amount
Net profit as per P/L account   88000
Add: inadmissible expense which are debited to P/L account    
Salaries to workers at home 12000  
legal expense 2000  
Income tax 14000  
Patent purchased 24000  
Donation 4000  
Provision for bad debts 6000 62000
    150000
Less: Admissible expenses of non business income    
Bad debts (20000-8000) 12000  
Dividend 6000  
Share of income from HUF 6000  
Rent from HP 18000  
Depreciation on patent(2400025%1/2) 3000
(45000)
Taxable income from business  
105000
Compute Taxable Income and Tax
Liability of any professional (Doctor or
Advocate or Chartered Accountant
etc.,) with imaginary data
 Dr. Rekha provides her receipts and payments account for the year ended
Particulars 31/3/21.
Amount Particulars Amount
To balance b/d 130000 By salary 66000
To visiting 140000 By clinic rent 96000
To consultation fees 476000 By motor car expenses 70000
To special medical camp remuneration 50000 By driver salary 60000
To rent from HP 120000 By medical books 30000
To gift 60000 By motor car purchased 500000
To sun pharma ltd dividends 11600 By household expenses 92000
To interest on debentures 18800 By telephone expenses 29000
    By travelling expenses 20000
    By surgical equipment 33000
    By balance c/d 104000
  1006400   1006400

Additional information:
Remuneration received from special medical camp was donated to orphanage.
30% of motor car usage, 20% of travelling expenses and 25% of telephone expenses related to
personal use. 50% of gifts are from patients.
Medical books include annual publication worth Rs.10000,remaining are general medical books.
Computation of taxable income from profession of Dr. Rekha

Particulars Amount Amount

Professional receipts  
visiting 140000  
Consultation fees 476000  
Special medical camp remuneration 50000  
Gift (60000×50%) 30000
696000
   
Less: professional payments  
Salary 66000
Clinic rent 96000
Motor car expenses (70000) 49000  
Driver salary (60000×70%) 42000  
Medical books (30000×40%) depreciation 12000  
Motor car purchased depreciation (500000×15%×70%) 52500  
Telephone expenses (29000×75%) 21750  
Travelling expenses (20000×80%) 16000  
 
Depreciation on surgical equipment (33000×40%) 13200
(368450)
Taxable income from profession  
327550
State the provisions for exemptions
from capital gains under sections
54, 54B, 54D, 54EC and 54F.
 CAPITAL GAINS EXEMPTED FROM TAX

Conditions application for claiming exempt of

tax for capital gains.
Owned by an individual or a HUF

Used for residential purposes

Property is taxable under the head income from

house property.

Long term capital asset.

Acquires another residential property within 1

year before or within 2 years from date of
transfer.

Constructs another residential property within 3

years from the date of such transfer.
 QUANTUM OF EXEMPTION
The amount of exemption will be equal to

The amount of long term

O Cost of new property
capital gain
R

Whichever is lower
 CAPITAL GAINS FROM TRANSFER FROM URBAN AGRICULTURAL LAND(SEC.54B)

Conditions
Such land being used
either by the assesse
The assesse has
or his parents for
purchased another
Such land is owned by agricultural purpose
piece of land within
an individual. in the 2 years
2 years from the
immediately
date of such transfer.
preceding the date
of its transfer.
 Capital gains arising out of compulsory
acquisition of land and building (sec.54D)

The assesse is engaged in industrial undertaking.

The land and building should be a aprt of industrial

undertaking.

The land building should have been compulsorily

acquired under by law.
The assesse within a period of 3 years from the date
of such acquisition purchases another land or
constructs a building for the purpose of re-
establishment of industrial undertaking.
 Capital gains arising from transfer of the long term
capital asset invested in long term specified
funds(sec.54EC)
Conditions for tax exemption:
The investments in long term specified
assets should be made within 6 months
from the date of transfer of original assets.

Long term specified assets means ANY bond

redeemable after 3 years and issued after
01.06.2007 National Authority of India(NAI) or the
Rural Electrification Corporation limited (RECL).
 Long term capital gain arising out of transfer of any long term
capital assets other than residential house, on investment of the
consideration in residential house is exempt from tax (sec.54F)

• The Assesse is either an individual or a HUF.

• The Assesse has transferred a long term capital asset which is not
a residential house.

• The assesse does not own more than 1 residential house on the
date of transfer of long term capital assets.

• The assesse purchases a residential house property within 1 year

before the date of transfer or within 2 years after the date of
transfer or constructs a residential house property within 3 years
from the date of transfer of such capital assets.