ACCOUNTING STANDARDS

To present the financial results of a business to various Stakeholders by means of Financial Statements through the Language of Business i.e. the ACCOUNTING there should be a proper regulated process else it might lead to no transparency, no consistency, no comparability, no adequacy, no reliability, no true and fair view of the financial statements and much more. In order to standardize the accounting principles and policies here comes in picture the ACCOUNTING STANDARDS which provide a framework and standard accounting policies so that the financial statements of different companies become comparable and will also have the transparency, consistency, comparability, adequacy, reliability, true and fair view of the financial statements, and much more.

CONCEPT

Accounting standards are written policy documents issued by expert accounting body or government or other regulatory body covering the aspects if recognition, treatment, measurement, presentation and disclosure of accounting transactions and events in the financial statements. The purpose of setting these bodies is to provide the useful information to investors and certain other parties having an interest in the company’s economic performance. The accounting standards deal with the following issues:

• Recognition of events and transactions that too place in the financial statements of an entity;
• Thereafter, measurement of the above said transactions and events;
• Presenting of such in a manner that it is meaningful and understandable to the reader; and
• Requirement of the disclosures to get the insight into what the fianancial statements are trying to reflect by the public at large and the stakeholder and in particular the investors.

BENEFITS AND LIMITATIONS

Accounting standards seek to describe the accounting principles, the valuation techniques, and the methods of applying the accounting principles in the preparation and presentation of financial statements so that they may give a true and fair view.

Benefits of the Accounting Standards

• There are certain area where important information are not statutorily required to be disclosed but at the same time the Accounting Standards may call for disclsure beyoond that required by law.
• Standards reduce to a reasonable extent or eliminate altogether confusing variations in the accoutning treatments used to prepare financial statements.

Limitations of the Accounting Standards

• There may be a trend towards rigidity and away from flexibility in applying the accounting standards.
• Accounting standards cannot override the statute. The standards are required to be framed within the ambit of prevailing statutes.

List of Accounting Standards

1. AS 1: Disclosure of Accounting Policies
2. AS 2: Valuation of Inventories
3. AS 3: Cash Flow statements
4. AS 4: Contingencies and Events Occuring after the Balance Sheet Date
5. AS 5: Net Profit or Loss for the Period, Prior Period items and Changes in Accounting Policies
6. AS 6: Depreciation Accounting
7. AS 7: Accounting for Construction Contracts
8. AS 9: Revenue Recognition
9. AS 10: Property, Plant and Equipments
10. AS 11: The Effects of Changes in Foreign Exchange Rates
11. AS 12: Accounting for Government Grants
12. AS 13: Accounting for Investments
13. AS 14: Accounting for Amalgamations
14. AS 15: Employee Benefits
15. AS 16: Borrowing Costs
16. AS 17: Segment Reporting
17. AS 18: Related Party Disclosures
18. AS 19: Leases
19. AS 20: Earnings Per Share
20. AS 21: Consolidated Financial Statements
21. AS 22: Accounting for Taxes on Income
22. AS 23: Accounting for Investments in Associates in Consolidated Financial Statements
23. AS 24: Discounting Operations
24. AS 25: Interim Financial Reporting
25. AS 26: Intangible Assets
26. AS 27: Financial Reporting of Interest in Joint Ventures
27. AS 28: Impairment of Assets
28. AS 29: Provisions, Contingnet Liabilities and Contingent Assets
29. AS 30: Financial Instruments: Recognition and Measurement
30. AS 31: Financial Instruments: Presentation
31. AS 32: Financial Instruments: Disclosures