Description
Accounting Standards are written documents, policy documents issued by expert accounting body or Government or other regulatories body covering the aspects of recognition
Accounting Standard and Financial
Statements
INTRODCUTION
Accounting Standards are written documents, policy documents issued by expert
accounting body or Government or other regulatories body covering the aspects of
recognition, measurement, treatment, presentation and disclosure of accounting
transaction in the financial statement. Accounting Standards in India are issued by the
Institute of Chartered Accountants of India (ICAI).
OBJECTIVES OF ACCONTING STANDARDS
Objective of Accounting Standards is to standardize the diverse accounting policies and
practices with the view to eliminate to the extent possible the non comparability of
financial statements and add the reliability to the financial statements.
ADVANTAGES OF ACCOUNTING STANDARDS
? Standards reduce to a reasonable extent or eliminate altogether confusion variation in
the accounting treatments used to prepare the financial statements.
? There are certain areas where important information is not required by law to be
disclosed, standards may call for disclosure beyond that required by law.
? It facilitates comparison of financial statements of different companies situated at
different places.
DISADVANTAGES OF ACCONTING STANDARDS
? There may be a trend towards rigidity and away from flexibility in applying
Accounting Standards.
? Differences in Accounting Standards are bound to be because of differences in the
traditions and legal system from one country to another.
? Accounting Standards cannot override the law. The standards are required to be
framed within the ambit of prevailing statute even though it is not an acceptable
standard.
doc_519785747.docx
Accounting Standards are written documents, policy documents issued by expert accounting body or Government or other regulatories body covering the aspects of recognition
Accounting Standard and Financial
Statements
INTRODCUTION
Accounting Standards are written documents, policy documents issued by expert
accounting body or Government or other regulatories body covering the aspects of
recognition, measurement, treatment, presentation and disclosure of accounting
transaction in the financial statement. Accounting Standards in India are issued by the
Institute of Chartered Accountants of India (ICAI).
OBJECTIVES OF ACCONTING STANDARDS
Objective of Accounting Standards is to standardize the diverse accounting policies and
practices with the view to eliminate to the extent possible the non comparability of
financial statements and add the reliability to the financial statements.
ADVANTAGES OF ACCOUNTING STANDARDS
? Standards reduce to a reasonable extent or eliminate altogether confusion variation in
the accounting treatments used to prepare the financial statements.
? There are certain areas where important information is not required by law to be
disclosed, standards may call for disclosure beyond that required by law.
? It facilitates comparison of financial statements of different companies situated at
different places.
DISADVANTAGES OF ACCONTING STANDARDS
? There may be a trend towards rigidity and away from flexibility in applying
Accounting Standards.
? Differences in Accounting Standards are bound to be because of differences in the
traditions and legal system from one country to another.
? Accounting Standards cannot override the law. The standards are required to be
framed within the ambit of prevailing statute even though it is not an acceptable
standard.
doc_519785747.docx