Accounting Standards Issued by ICAI ASB has issued 29 standards.In line with the International standards.

AS 1: Disclosure of Accounting Policies Deals with disclosure of significant accountingpoliciesAccounting policies vary from enterprises toenterprises.Three fundamental assumptions Going ConcernAccrual ConceptConsistency. AS 2: Inventories InventoriesThree aspects of Inventory Valuation Measurement of costMeasurement of net realizable value.Comparison between Cost and Net RealizableValue.Important Cost Formula AS 3: Cash Flow Statement Cash Flow statementCash and cash EquivalentTypes of Cash Flow Cash flow from operating activities Cash flow from investing activities Cash flow from financial activities AS 4: Contingencies and eventsoccurring after the Balance Sheet Date. Marked as a note under the Balance Sheet forfuture reference. Contingencies. Events occurring after the Balance Sheet Date. AS 5: Net Profit or Loss for the Period,Prior Period Items and Changes inAccounting Policies. All income and expenses should be included inthe determination of net profit or loss for theperiod unless an accounting standard requiresor permits otherwise Prior period items. The change in the accounting policy should bemade only if adoption of different policy isrequired or if the change is for the improvementof enterprise.

AS 6: Depreciation Accounting. Depreciation assets are: expected to be used more then one AY have a limited useful life Used in the production of supply and goods. Depreciation cannot be applied to: Forests and plantation Minerals, oils, natural gas etc. Expenditure on R&D AS 7: Construction Contracts The standard deals with the treatment of revenue and cost associated with constructioncontracts. A construction contract is a contract for theconstruction of an asset or of a combination of assets which together constitute a single project. Types of construction contracts: Fixed price contract Cost plus contract AS 8: Accounting for research anddevelopment: This standard deals with the treatment of costsof research and development in financialstatements. Cost incurred for research and developmentmainly includes the following: Salaries , wages , and other related cost of personals. Cost of material and services consumed. Overhead costs Payment to outside bodies for R&D AS 9: Revenue recognition This standard deals with the bases for therecognition of revenue in the statement of profitand loss of an enterprise.It is only concerned with the recognition of revenue arising in the course of ordinary activities of the enterprise which are The sale of goods The rendering of services

The use by others of enterprise resources yieldinginterest , royalties and dividends.

AS 10: Accounting for Fixed Assets ASSET is a resource : Controlled by the enterprise as a result of pastevents,from which future economic benefits are expectedto flow to the enterprise. Fixed Asset Tangible Fixed AssetsIntangiblesCapital Work In Progress AS 11: Effects of changes in ForeignExchange Rate An entity has to present its financial statementsin terms of currency of the country, although itmight have transactions in terms of foreigncurrency.Monetary Items : measured at year endexchange rate.Non-Monetary Items: measured at exchangerate on the date of transaction. AS 12: Accounting for Government Grants This standard is applicable to govt. grants.GOVT. : Govt. and Govt. agencies, and similarlocal, national or international bodies. GOVT. GRANTS : Assistance by govt. in cash orkind to an enterprise for past and future,compliance with certain conditions. Exceptions : Govt. assistance which cannot be reasonably valued.Transactions which cannot be distinguished fromnormal trading transactions. AS 13: Accounting for investments It deals with accounting for investments in thefinancial statement of enterprise and relateddisclosure. it does not deals with operating orfinancial leases, investment of retirement benefitplans, life insurance etc.Definition: InvestmentsCurrent investmentsLong term investmentsFair valueMarket valueInvestment property.

AS 14: Accounting for Amalgamations

This statement deals with accounting for amalgamations and the treatment of any resultant goodwill or reserves, but not with cases of acquisitions. Definitions: Amalgamation Transferor company Transferee company Types of amalgamation: Nature of merger Nature of purchase Accounting approach: Pooling interest method Purchase method

AS15: Accounting for Retirement benefits inthe Financial Statements of EmployersIntroduction: This standard prescribe accounting & disclosure forall employee benefits, except employee share-basedpayments.Retirement benefits usually consists of:PFPensionGratuity etc. Definition: Retirement benefits schemesDefined contribution schemesD e f i n e d b e n e f i t s c h e m e s Pay-as-you-go AS 16: Borrowing Costs Borrowing costs are interest and other costsincurred by an enterprise in connection with theborrowing of funds.Borrowing cost may include different factors. AS17: Segment Reporting This standard is made for all those enterpriseswhich produce more than one product or whichoperates in different geographical locationsFactors that should be considered. Objectives AS 18: Related Party Disclosure

Parties are considered to be related if at any timeduring the reporting period one party has theability to control the other party or exercisesignificant influence over the other party inmaking financial and/or operating decisions.This Standard is mandatory in nature fordifferent organizations. AS 19: Leases The objective of this Standard is to prescribe, forlessees and lessors, the appropriate accountingpolicies and disclosures in relation to finance leasesand operating leases.This Standard should be applied in accounting forall leases other than: lease agreements to explore for or use naturalresources, such as oil, gas, timber, metals and othermineral rights;licensing agreements for items such as motion picturefilms, video recordings, plays, manuscripts, patentsand copyrights;lease agreements to use lands. AS 20: Earnings per Share The Objective is to prescribe principles fordetermination and presentation of earnings pershare which will improve comparison of performance among different enterprises for thesame period and among different accountingperiods for the same enterprise.To enhance the quality of financial reporting. AS 21: Consolidated FinancialStatements The objective of this statement is to lay downprinciples and procedures for presentation andpreparation of consolidated financialstatements, that are presented by parent(Holding enterprise) to provide financialinformation about the economic activities of thegroup. AS 22:Accounting for Taxes onIncome Came into effect from 1st April, 2001. Mandatory in nature for two types of enterprises.

Applicable for all enterprises . Prescribe accounting treatment for taxes onincome in accordance with the matching concept: Matching of taxes with the correspondingrevenue and expenses since taxable incomesignificantly varies with the accountingincome Reasons Timing Difference Permanent Differences Timing difference results in D.T.A or D.T.L. TREATMENT AND DISCLOSURE D.T.A treated on the basis of PRUDENCE i.e.availability of sufficient taxable income.Time period of 7 yrs.D.T.A & D.T.L should be distinguished from C.A & C.L.D.T.A & D.T.L should be disclosed underseparate heading.Evidence supporting future taxable incomeshould also be disclosed. AS 23-ACCOUNTING FOR INVESTMENT IN ASSOCIATED INCONSOLIDATED BALANCE SHEET To prescribe principles & procedures forrecognizing the effects of investment on financialposition & operating result.What is an Associate? Defining Sufficient Influence. DISCLOSURES Use of Equity Method for calculating investments.Disclosure of not using Equity Method.Goodwill / Capital reserve should be included in thecarrying amount of investments, but should bedisclosed.Investments to be distinguished as long terminvestments.Investors share of profit / loss to be disclosed.Names of associates, reporting dates should also bedisclosed.In case of use of different accounting policiesadopted should also be disclosed. AS 24-ACCOUNTING FOR DICONTINUING OPERATIONS Came into effect on 1.4.2004To establish principles for reportinginformation on discontinuing operations.Mandatory for all discontinuing operations.What is a Discontinuing Operation? 1.By disposing it entirety. 2.By Piecemeal 3.By abandonment.

DISCLOSURES Description of discontinuing operations.Date & period in which discontinuance isexpected to complete.Amount of assets & liabilities to be disposed off.Amount of revenue & expenses attributable todiscontinuing operations.Amount of net cash flow attributable to Operating, Investing & Financing activities. . AS 25: Interim Financial Reporting The objective of this Standard is to prescribe theminimum content of an interim financial reportand to prescribe the principles for recognitionand measurement in a complete or condensedfinancial statements for an interiperiod.Timely and reliable interim financial reportingimproves the ability of investors, creditors, andothers to understand an enterprise's capacity togenerate earnings and cash flows, its financialcondition and liquidity. AS 26: Intangible Assets The objective of this Standard is to prescribe theaccounting treatment for intangible assets that arenot dealt with specifically in another AccountingStandard.This Standard requires an enterprise to recognisean intangible asset if, and only if, certain criteria aremet.The Standard also specifies how to measure thecarrying amount of intangible assets and requirescertain disclosures about intangible assets AS 27: Financial Reporting of Interests inJoint Ventures This Standard is mandatory in respect of separatefinancial statements of an enterprise.In respect of consolidated financial statements of anenterprise, this Standard is mandatory in naturewhere the enterprise prepares and presents theconsolidated financial statements.The objective of this Standard is to set out principlesand procedures for accounting for interests in jointventures and reporting of joint venture assets,liabilities, income and expenses in the financialstatements of venturers and investors.

AS 28: Impairment of Assets The objective of this Standard is to prescribe theprocedures that an enterprise applies to ensure thatits assets are carried at no more than theirrecoverable amount. An asset is carried at more thanits recoverable amount if its carrying amountexceeds the amount to be recovered through use orsale of the asset.If this is the case, the asset is described as impairedand this Standard requires the enterprise torecognise an impairment loss. AS29: Provisions, Contingent Liabilities andContingent Assets The objective of this Standard is to ensure thatappropriate recognition criteria andmeasurement bases are applied to provisionsand contingent liabilities and that sufficientinformation is disclosed in the notes to thefinancial statements to enable users tounderstand their nature, timing and amount.The objective of this Standard is also to lay downappropriate accounting for contingent assets.