AProject Report on

A Project Report on Comparative Study of AccountingStandard Issued by ICAI with

International AccountingStandard
Indian Accounting Standard
:
AS-9, 10, 12, 18
.
International Accounting Standard
:
IAS- 18, 16, 20, 24
.
Submitted To
UNIVERSITY OF PUNE
A Report Submitted in Partial Fulfillment of the Requirement of M.Com part II
UNDER THE GUIDANCE OF
Prof. XXX
SUBMITTED BY
Mr. XXXRoll No. XXX Mo No. XXXTHROUGHXXX COLLEGE OF COMMERCE,
PUNE(2010-2011)
4
Introduction:Accounting Standards establish rules relating to recognition
, measurement and disclosures thereby ensuring that all enterprises that followthem are
comparable and that their financial statements are true, fair and transparent. Highquality accounting standards are a necessary and importantelement of a sound capital market
system. In public capital markets such ast h o s e i n t h e U n i t e d S t a t e s . H i g h q u a l i t y a c c o u n t i n g s t a n d a r d s r e d u c e uncertainty and
increase overall efficiency and investors confidence byrequiring that financial
report provide decision useful information that isrelevant, reliable, comparable
and transparent once confined by national borders transactions in todays capital market
often are driven by a
demandf o r a n d s u p p l y o f c a p i t a l t h a t t r a n s c e n d s n a t i o n a l b o u n d a r i e s . W it h t
h e increase in cross-border capital rising and investment transactions comes
ani n c r e a s i n g d e m a n d f o r a s e t o f h i g h - q u a l i t y i n t e r n a t i o n a l
a c c o u n t i n g standards that could be used as a basis for financial reporting
worldwide.Accounting Standards are written policy documents issues by the expert
accounting body or by government or other regulatory body
coveringt h e a s p e c t s o f r e c o g n i t i o n , m e a s u r e m e n t , p r e s e n t a t i o n a n d d i s c l o s u r
e o f accounting transactions in financial statement.
What are Accounting Standards
:-

Accounting Standards are the statements of code of practice of theregulatory

accounting bodies that are to be observed in the preparation of financial statements.
In layman terms accounting standards are the
writtend o c u m e n t s i s s u e d b y t h e e x p e r t s i n s t i t u t e s o r o t h e r r e g u l a t o
ry bodiescovering various aspects of measurement treatment, prese
n t a t i o n a n d disclosure of accounting transactions.
Who issues Accounting Standards in India
:The institute of chartered Accountants of India (ICAI)
reorganizingt h e n e e d t o h a r m o n i e s t h e d i v e r s e a c c o u n t i n g p o l i c i e s a n d p r a c t
i c e s a t present in use in India constituted accounting standard board (ASB) on April21, 1977.
The main role of ASB is to formulate accounting standards from time to time.
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About ICAI:The Institute of Chartered Accountants of India (ICAI) is a
statutory b o d y e s t a b l i s h e d u n d e r t h e C h a r t e r e d A c c o u n t a n t s a c t
1 9 4 9 . ( A c t No.XXXXVIII of 1949) for the regulation of the profession of
CharteredAccountants in India. During its 61 years of existence, ICAI has
achievedrecognition as a premier accounting body not only in the country but
alsog l o b a l l y , f o r i t s c o n t r i b u t i o n i n t h e f i e l d s o f e d u c a t i o n , p r o f e s s
ionald e v e l o p m e n t m a i n t e n a n c e o f h i g h a c c o u n t i n g , a u d i t i n g a
n d e t h i c a l standards. ICAI now is the second largest accounting body in
t h e w h o l e world.
Procedure of formulating Accounting Standards in India
:The institute of Chartered Accountant of India (ICAI) recognizing theneed to harmonize the
diverse accounting policies and practices, constitutedan accounting standards boards (ASB) on
April 21, 1977. The main factiono f AS B s o t h a t s u c h s t a n d a r d s m a y b e m a n d a t e d
b y t h e c o u n c i l o f I C A I . While formulating the standards in India, ASB will take
into considerationthe applicable laws custom usages and business environment. ICAI is one
of the members of International Accounting Standards Committee (IASC)
andh a s a g r e e d t o s u p p o r t t h e o b j e c t i v e s o f I A S C . A S B w i
l l g i v e d u e consideration to IAS and try to integrate them to the extent possible in lightof
the considerations and practices pre-vailing in
India.T h e a c c o u n t i n g s t a n d a r d s i s s u e d w i l l a p p l y t o G e n e r a l P u r p o s e Financi
al Statement this would include balance-sheet, Profit & Loss A/c and other statement
and explanatory notes which form part thereof issued for t h e u s e o f s h a r e h o l d e r s o r
m e m b e r s , C r e d i t o r s , E m p l o y e e s a n d p u b l i c a t large. The Accounting Standards
are intended to apply only to items whichare material. The standards are generally
expected to apply prospectivelyunless otherwise stated.
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Comments on Balance Sheet of Infosys Technology Systems:

1) INCOME STATEMENT
Each framework requires prominent presentation of an income statement asa primary statement.
FormatIFRS:
There is no prescribed format for the income statement. The entityshould select a method of
presenting its expenses by either function or nature; this can either be, as is encouraged, on the
face of the incomestatement, or in the notes. Additional disclosure of expenses by nature
isrequired if functional presentation is used. IFRS requires, as a minimum, presentation of the
following items on the face of the income statement:1 . r e v e n u e ; 2 . f i n a n c e c o s t s ;
3.
share of post-tax results of associates and joint ventures accounted for using the
equity4 . m e t h o d ; 5 . t a x e x p e n s e ; 6.post-tax gain or loss attributable to the
results and to remeasurementof discontinued operations;
7.
Profit or loss for the period
.
The portion of profit or loss attributable to the minority interest and to the parent entity is
separately disclosed on the face of the income statement asallocations of profit or loss for the
period. An entity that discloses anoperating result should include all items of an operating nature,
includingthose that occur irregularly or infrequently or are unusual in amount.
Indian GAAP: Presentation in one of two formats. Either:
1.a single-step format where all expenses are classified by function and are deducted
from total income to give income before tax;
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2.a multiple-step format where cost of sales is deducted from sales to show gross
profit, and other income and expense are then presented togive income before tax. SEC
regulations require registrants tocategorise expenses by their function. Amounts attributable to
theminority interest are presented as a component of net income or loss.
IFRS:
The total of income and expense recognised in the period comprisesnet income. The following
income and expense items are recognised directlyin equity:1.fair value gains/(losses) on
land and buildings, intangible assets,available-for-sale investments and certain financial
instruments;2.foreign exchange translation differences;3.the cumulative effect of
changes in accounting policy;4.changes in fair values of certain financial
instruments if designated ascash flow hedges, net of tax, and cash flow hedges reclassified
toincome and/or the relevant hedged asset/liability; and5.actuarial gains and losses on
defined benefit plans recognised directlyin equity (if the entity elects the option available
under IAS 19,Employee Benefits, relating to actuarial gains and losses).
Indian GAAP:
Similar to IFRS, except that revaluations of land and buildings and intangible assets are
prohibited under US GAAP. Actuarialgains and losses (when amortised out of accumulated other
comprehensiveincome) are recognised through the income statement
.2) Statement of changes in share (stock) holders equityIFRS:

Presented as a primary statement unless a SoRIE is presented as a primary statement.

Supplemental equity information is presented in the noteswhen a SoRIE is presented (see
discussion under Presentation above). Inaddition to the items required to be in a SoRIE,
it should show capitaltransactions with owners, the movement in accumulated profit and
areconciliation of all other components of equity. Certain items are permittedto be disclosed in
the notes rather than in the primary statement.
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Indian GAAP:
Similar to IFRS, except that US GAAP does not have aSoRIE, and SEC rules permit the
statement to be presented either as a primary statement or in the notes.
Bibliography

Indian Accounting Standards and GAAP-Dolphy DSouza.

Financial Reporting Volume 1.-The institute of Chartered Accountantsof India.

WWW.ICAI.Org