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GOOD

AFTERNOON

PRESENTORS
DIVYA DESHMUKH - 58 NEHA YADAV

- 46

ACCOUNTING STANDARD

ACCOUNTING STANDARD
Recording transaction
Setting a guidelines. It also has wider concept compare to

Book Keeping Global Uniformity Easy to take decision.

INTRODUCTION OF AS-5
In India there is no specific accounting standard dealing with presentation of profit and loss account. Generally all the items of income and expenses are included in determination of net profit or loss. Earlier in India every item of income and expenses except those that are directly taken into the balance sheet are routed through profit and loss account.

NET PROFIT AND LOSS


Normally all item of income and expenses which are

recognized in a period of net profit and loss for the period. It has two types that are as follows A) Extra-ordinary item B) ordinary item

EXTRA-ORDINARY ITEM
Nature of extra ordinary item
Rise of an extra ordinary item Differences Examples

Disclosure Of Extra Ordinary Item


Nature of the discontinued operation
Industry and geographical segments in

which it is reported. Effective date and manner of discontinuance To know the accounting policy used to measure gain or loss.

ORDINARY ITEM
Performance of the

enterprise for the period Nature of item To understand the financial position of an enterprises

Disclosure of ordinary item


The write-down of the inventories , poverty,

plant and equipment and their net value . Organisation restructuring Disposals of items of property and long term investment.

PRIOR PERIOD
The term prior period is being defined in this standard refers only to income or expenses which arise in the current period as a result of errors in the preparation of financial statement. .e.g. Arrears payable to workers as a result of revision of wages for the current period. They are generally infrequent in nature. The objective is to indicate the effect of such items on the current profit and loss they do not include recurring adjustments.

PRIOR PERIOD ADJUSTMENTS


1) Change from FIFO to average method
2) Short supply of components 3) Change from direct costing to absorption costing

method.

Fundamental Errors
Errors may be occurred as a result of mathematical

mistakes in applying accounting policy frauds. Correction of errors is normally include in net profit or loss. methods of correcting fundamental errors:i) bench mark treatment ii) allowed alternative

Changing in Accounting Policy


It has two application either:-

i) Retrospectively application Ii) Prospective application Methods of changing accounting policy I) Adoption of an international accounting standard (IAS). Ii) Other changes a) Bench mark b) Allowed alternative

Changing in accounting estimates


What does accounting estimates means?

EFFECTS OF ESTIMATION
A) The period of change:- its affect the current period

B) the period of the change and the future change:- it may affect the current period and the coming future period also.

ADVANTAGES
1) REDUCTION IN VARIATIONS
2) DISCLOSURE BEYOBD THAT REQUIRED BY LAW 3) FACILATES COMPARISION

CONCLUSION
So here we conclude that ICAI has different practice of

preparing from the others. However Indian enterprise are required to make adequate disclosure so as to determine after taking into account all expense and income which directly relate to the entity . ICAI has withdrawn the concept of extra_ ordinary item while US GAAP still requires separate disclosure of extraordinary item.

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