 Introduction

This statement deals with the treatment in financial statement of contingencies and events occuring after the balance sheet date.

A contingency is a condition / situation. The ultimate outcome of which gain or loss will be known / determined only on the occurances or non-occurance of one or more uncertain future events.

SCOPE  Liabilities of life assurance and general insurance enterprises arising from policies issued. .  Obligations under retirement benefit plans.

DISCLOSURE  The nature of the event.  An estimates of the financial effect or a statement that such an estimate cannot be made. .  The estimation of the amount of contingent loss to be provided for in the financial statements.

(AS-5) : NET PROFIT OR LOSS FOR THE PERIOD. . PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLIES  Objective The objective of this statement is to prescribe the classification and disclosure of certain items in the statements of profit and loss so that all enterprises prepare and present such a statement on a uniform basis.

extra-ordinary items and prior period items in the statements of profit and loss. in accounting for changes in accounting estimates and in disclosure of changes in accounting policies. .SCOPE This statement should be applied by an enterprise in presenting profit or loss from ordinary activities.

THE TERMS USED IN THIS STATEMENT  Ordinary Activities  Extra-ordinary Items  Prior Period  Accounting Policies .

DISCLOSURE The nature and amount of prior period items should be separately disclosed in the statement of profit and loss in a manner that their impact on the current profit or loss can be purchased. .

 Foreign currency transactions should be expressed in the enterprises reporting currency. .  The financial statements of foreign branches should be translated into the enterprises reporting currency in order to include them in the financial statements of the enterprise.(AS-11) : Accounting For The Effects Of Changes In Foreign Exchange Rates  Objective  An enterprise may have transactions in foreign currencies or it may have foreign branches.

 In translating the financial statements of foreign branches for inclusions in the financial statement of the enterprise. .SCOPE  In accounting for transactions in foreign currencies.

TERMS USED IN FINANCIAL STATEMENTS  Reporting Currency  Foreign Currency  Average Rate  Exchange Rate  Closing Rate .

 Non-monetary items other than fixed assets. eg: Foreign currency notes.REPORTING EFFECTS OF CHANGES IN EXCHANGE RATES  At each balance sheet data-monetary items denominated in a foreign currency. . which are carried in terms of historical cost denominated in a foreign currency should be reported using the exchange rate at the date of the transactions.

 The amount of exchange differences adjusted in the carrying amount of fixed assets during the accounting period. .DISCLOSURES  The amount of exchange differences adjusted in the net profit / loss for the period.

cash incentives. etc. Govt grants are sometimes called by other names such as subsidies. duty drawbacks.(AS-12) : ACCOUNTING FOR GOVERNMENT GRANTS  Introduction This statement deals with accounting for govt grants. .

 Govt grants are assistance by govt in cash or kind to an enterprise for past or future compliance with certain conditions. national or international.DEFINITIONS  Govt refers to govt. . govt agencies and similar bodies whether local.

.ACCOUNTING TREATMENT OF GOVT GRANTS  The capital approach under which a grant is treated as part of shareholder’s funds.  The income approach under which a grant is taken to income over one or more periods.

 It is usual to account for such assets at their acquisition cost. .NON-MONETARY GOVT GRANTS  Govt grants may take the form non-monetary assets. such as land / other resources given at concessional rates.

DISCLOSURE The accounting policy adapted for govt grants. . including the method of presentation in financial statements.

.(AS-13) : ACCOUNTING FOR INVESTMENTS  Introduction This statement deals with accounting for investments in the financial statements of enterprises and related disclosure requirements.

. for capital appreciation. or for other benefits to the investing enterprise. interest and rentals.DEFINITION Investments are assets held by an enterprise for earning income by way of dividends.

CLASSIFICATION OF INVESTMENTS  Current Investment  Long-Term Investment .

.(AS-14) : ACCOUNTING FOR AMALGAMATIONS  Introduction This statement deals with accounting for amalgamations and the treatment of any resultant goodwill / reserves.

DEFINITIONS Amalgamation means an amalgamation pursuant to the provisions of the companies act 1956 or any other statute which may be applicable to companies. .

 An amalgamation in the nature of purchase.TYPES OF AMALGAMATIONS  An amalgamation in the nature of merger. .

.  The purchase method.METHODS OF ACCOUNTING FOR AMALGAMATIONS  The pooling of interest method.

 The method of accounting used to reflect the amalgamation. .  Effective date of amalgamation for accounting purpose.  Particulars of the scheme sanctioned under a statute.DISCLOSURE  Name and general nature of business of amalgamation companies.

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