Accounting Standards | LIST OF THE ACCOUNTING STANDARDS AS ISSUED BY ICAI

INTRODUCTION TO ACCOUNTING STANDARDS

Financial statements are prepared to summarize the end result of all the business activities by an enterprise during an accounting period in monetary terms. These business activities vary from one enterprise to the other. It is very difficult to compare the financial statements of different reporting enterprises because of different methods and principles adopted by these business enterprises in preparing their financial statements. Accounting standards are evolved to make these methods and principles uniform and financial statements comparable to the possible extent. Following are the different group of persons interested in the financial statements:

1. Bankers 

2. Shareholders 

3. Investors 

4. Creditors 

5. Customers 

6. Employees 

7. Competitors 

8. Income tax/Sales tax/Excise authorities

 

 MEANING ‘Accounting Standards are written, policy documents issued by expert accounting body or by Government or other regulatory authorities covering the aspects of recognition, measurement, treatment, presentation and disclosure of accounting transaction in the financial statement.’ The main purpose of formulating accounting standard is to standardize the diverse accounting policies with a view to eliminate to the extent possible the incomparability of information provided in financial statements and add reliability to such financial statements. Accounting standards ensure the consistency and the comparability of the financial statements reported by the different enterprises creating a general sense of confidence that users have in the fairness and reliability of the statements they rely.

Accounting Standards will not, however, apply to enterprises only carrying on the activities which are not of commercial, industrial or business nature, e.g., an activity of collecting donations and giving them to flood affected people. Exclusion of an enterprise from the applicability of the Accounting Standards would be permissible only if no part of the activity of such enterprise is commercial, industrial or business in nature. Even if a very small proportion of the activities of an enterprise are considered to be commercial, industrial or business in nature, the Accounting Standards would apply to all its activities including those which are not commercial, industrial or business in nature.

ADVANTAGES: 1. It provides the accountancy profession with useful working rules. 2. It assists in improving quality of work performed by accountant. 3. It strengthens the accountant’s resistance against the pressure from directors to use accounting policy which may be suspect in that situation in which they perform their work. 4. It ensures the various users of financial statements to get complete crystal information on more consistent basis from period to period. 5. It helps the users to compare the financial statements of two or more organizations engaged in same type of business operation.

DISADVANTAGES: 1. Users are likely to think that said statements prepared using accounting standard are foolproof. 2. They have been derived from social pressures which may reduce freedom. 3. The working rules may be rigid or bureaucratic to some users of financial statement. 4. The more standards there are, the more costly the financial statements are to produce.

The Institute of Chartered Accountants of India (ICAI), recognizing the need to harmonize the diverse accounting policies and practices in use in India, constituted the Accounting Standards Board (ASB) on 21st April, 1977.

 COMPOSITION OF THE ACCOUNTING STANDARDS BOARD (ASB)
The composition of the ASB is fairly broad-based and ensures participation of all interest-groups in the standard-setting process. Apart from the elected members of the Council of the ICAI nominated on the ASB, the following are represented on the ASB:
1. Nominee of the Central Government representing the Department of Company Affairs on the Council of the ICAI. 

2. Nominee of the Central Government representing the Office of the Comptroller and Auditor General of India on the Council of the ICAI.

3. Nominee of the Central Government representing the Central Board of Direct Taxes on the Council of the ICAI. 

4. Representative of the Institute of Cost and Works Accountants of India. 

5. Representative of the Institute of Company Secretaries of India. 

6. Representatives of Industry Associations (1 from Associated Chambers of Commerce and Industry (ASSOCHAM), 1 from Confederation of Indian Industry (CII) and 1 from Federation of Indian Chambers of Commerce and Industry (FICCI) 

7. Representative of Reserve Bank of India 

8. Representative of Securities and Exchange Board of India 

9. Representative of Controller General of Accounts 

10. Representative of Central Board of Excise and Customs 

11. Representatives of Academic Institutions (1 from Universities and 1 from Indian Institutes of Management) 

12. Representative of Financial Institutions 

13. Eminent professionals co-opted by the ICAI (they may be in practice or in industry, government, education, etc.) 

14. Chairman of the Research Committee and the Chairman of the Expert Advisory Committee of the ICAI, if they are not otherwise members of the Accounting Standards Board 

15. Representative(s) of any other body, as considered appropriate by the ICAI

The council of the Institute of the Chartered Accountants of India has so far issued 32 Accounting Standards, However AS- 8 on Accounting for Research and Development (stands withdrawn after introduction of AS-26), thus effectively there are 31 Accounting standard

Accounting Standard No.	Title of Accounting Standard
AS-1	Disclosure of Accounting Policies
AS-2	Valuation of Inventories
AS-3	Cash Flow Statements
AS-4	Contingencies and Events (Occurring after the Balance Sheet Date)
AS-5	Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies
AS-6	Depreciation Accounting
AS-7	Construction Contracts
AS-8	Construction Contracts
AS-9	Revenue Recognition
AS-10	Accounting for Fixed Assets
AS-11	The Effect of Changes in Foreign Exchange Rates
AS-12	Accounting for Government Grants
AS-13	Accounting for Government Grants
AS-14	Accounting for Amalgamations
AS-15	Employee Benefits
AS-16	Borrowing Cost
AS-17	Segment Reporting
AS-18	Related Party Disclosures
AS-19	Leases
AS-20	Earnings per Share
AS-21	Consolidated Financial Statements
AS-22	Accounting for Taxes on Income
AS-23	Accounting for Investment in Associates in Consolidated Financial Statements
AS-24	Discontinuing Operations
AS-25	Interim Financial Reporting
AS-26	Intangible Assets
AS-27	Financial Reporting of Interests in Joint Venture
AS-28	Impairment of Assets
AS-29	Provisions, Contingent Liabilities and Contingent Assets
AS-30	Financial Instruments: Recognition and Measurement
AS-31	Financial Instruments: Presentation
AS-32	Financial Instruments: Disclosures