Importance of Accounting Standard

Importance of accounting standards:Accounting standards are written document which are issued by expert accounting body or by government the aspect of measurement, treatment & presentation.

It is used in disclosure of accounting transaction.Accounting standards are issued by by various county body in different country. In India accounting standard issued by institute of chartered accountant of India. its short name is ICAI.
 ICAI situated in new Delhi (India). ICAI president..CA subodh Agrawal.....................
Accounting standard is an important tool which helps true & fair financial statement of different organisation.financial statement is a statement which is prepared by the management.financial statement include profit & loss account & balance sheet.

Importance of Accounting standard :


  •  Implementation of accounting standard is the responsibility of management of the enterprise.
  • For better presentation of financial statement .
  • It reduce confusing variation of accounting treatment.
  • It helps comparison of financial statement of different companies.

Scope of accounting standard


  • It cannot override the local regulation which govern th presentation of f/s.
  • it applies which item is material.
  • It is formulated by accounting standard board(ASB).
  • The AsB  may consider any issue related to accounting standard.


Number accounting standard:

ICAI has issued 32 accounting standard .As- 08 "Research & development" has been withdrawn.
Presently there are 31 accounting standards are effective.
out of these three accounting standad namely  30.31,32 will become mandatory W.E.F ist April 2011.
Above three accounting standards are yet not notified by Central government.

Brief of 32 accounting standards:-

1     Disclosure of accounting policy


2    Valuation of inventory


3    Cash flow statement

4    contigencies & events occuring after b/s date

5    Net profit & loss for the period' prior period items

6    Depreciation accounting

7    Construction contract

8   withdrawn included in As 26

9   Revenue recognition

10  Accounting for Fixed Assets

11  The effect of changes in Foreign exchanges

12  Accountin for Govrnment grant

13  Investment

14  Accounting for Amalagmation

15  Employee benefit.

16  borrowing Cost

17  Segment reporting

18  Related party disclosure

19  Accounting for  lease

20  Earning per share

21  Consolidated financial statement

22  Accounting for taxes income

23  Accounting for investment in Associates in consolidated financial statement

24  Discontinuing operation

25  Interim financial statement

26  Intangible Assets

27  Financial reporting of interest in joint venture

28  impairment of assets 

29  Provision, contingent, liabilities and contingent assets

30  Financial Instrument- Recognition & measurement

31  Financial Instrument- Presentation

32  Financial Instrument-Disclosure



 more details can be found through ICAI website under resourse section. 

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...