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    Original Title

    AS-1

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    3 views20 pages

    As 1

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    dilipupadhyay1979

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    © All Rights Reserved
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    Introduction

    • Accounting standards are authoritative


    standards for financial reporting and are
    the primary source of generally accepted
    accounting principles (GAAP).
    Accounting standards specify how
    transactions and other events are to be
    recognized, measured, presented and
    disclosed in financial statements.
    Objectives
    The basic objective of Accounting Standards
    is to remove variations in the treatment of
    several accounting aspects and to bring
    about standardization in presentation.
    They intent to harmonize the diverse
    accounting policies followed in the
    preparation and presentation of financial
    statements by different reporting
    enterprises so as to facilitate intra-firm and
    inter-firm comparison
    Introduction of AS-1
    • This Standard deals with the disclosure of
    significant accounting policies followed in
    preparing and presenting financial
    statements.
    • The disclosure of some of the accounting
    policies followed in the preparation and
    presentation of the financial statements is
    required by law in some cases.
    Certain fundamental accounting assumptions
    underlie the preparation
    and presentation of financial statements
    • Going Concern
    • Consistency
    • Accrual
    As per AS-1 accounting polices are specific
    accounting principles adopted by the
    enterprise in preparation and presentation
    of financial statements.
    What are the significant accounting
    polices
    • Method of depreciation
    • Valuation of tangible and intangible assets.
    • Valuation of inventories
    • Employees stock option
    • Contingent liability
    • Tax liability
    • provisioning
    • Treatment of retirement benefits
    Investments : current investments are
    valued at lower of than fair value, and long
    term investments at cost.
    Retirement benefits: monthly contributions
    to provident funds, gratuity, pension should
    be charged against revenue. All
    contributions in respect of employee
    retirement benefit should be statutorily
    deposited to government.
    Foreign currency transactions: should be
    recorded at exchange rate prevailing at that
    date. Gains/ losses of fluctuations should
    be recognized in profit & loss account.
    Lease rentals: equipment taken on lease ,
    rentals payable are segregated into cost of
    assets and interest component by applying
    IRR method.
    Main Principles
    • All significant accounting policies adopted
    in the preparation and presentation of
    financial statements should be disclosed.
    • The disclosure of the significant
    accounting policies as such should form
    part of the financial statements.
    • Any change in the accounting policies which has
    a material effect in the current period or which is
    reasonably expected to have a material effect in
    later periods should be disclosed.

    • It would be helpful to the reader of financial


    statements if they are all disclosed as such in
    one place instead of being scattered over
    several statements, schedules and notes.
    To summarize
    • All significant accounting policies adopted
    in the preparation and presentation of
    financial statements should be disclosed.
    • The disclosure of the significant
    accounting policies as such should form
    part of the financial statements and the
    significant accounting policies should
    normally be disclosed in one place.
    • Any change in the accounting policies which has
    a material effect in the current period or which is
    reasonably expected to have a material effect in
    later periods should be disclosed.
    • If the fundamental accounting assumptions, viz.
    Going Concern, Consistency and Accrual are
    followed in financial statements, specific
    disclosure is not required. If a fundamental
    accounting assumption is not followed, the fact
    should be disclosed.

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