Description
explains fundamental assumption in financial statement and selection of accounting policies and disclosure of accounting policie
ACCOUNTING STANDERD 1
(“Disclosure of accounting policies”)
ACCOUNTING POLICIES:
• Refers to the specific accounting principle and method of applying those principle adopted by the enterprises in the preparation and presentation of financial statement.
• Those policy adapted by enterprises may vary from enterprises to enterprises ,like: Valuation of Inventories Treatment of goodwill Method of Depreciation
Fundamental assumption in Financial statement
• Assumption for preparation and presentation of financial statement: – Going Concern – Consistency – Accrual (Disclosure is necessary if any of them are not followed)
Selection of Accounting Policies
• Prudence: Provide for all probable losses but don’t recognize unrealized profits • Substance over form: The accounting treatment and presentation in the financial statement of transaction and event should be governed by their substance and not merely by legal form • Materiality: Financial statement should disclose all material Items i.e. the knowledge of which might influence the decision of the user of financial statement.
Disclosure of Accounting Policies
• The disclosure should form part of the financial statement and normally at one place • Material effect due to change in accounting policy should be disclosed
• Disclosure of accounting policies or of changes their in ,can not remedy a wrong or inappropriate treatment
• If any accounting assumption is dosent followed the fact should be disclosed
Thank You…
doc_284195857.pptx
explains fundamental assumption in financial statement and selection of accounting policies and disclosure of accounting policie
ACCOUNTING STANDERD 1
(“Disclosure of accounting policies”)
ACCOUNTING POLICIES:
• Refers to the specific accounting principle and method of applying those principle adopted by the enterprises in the preparation and presentation of financial statement.
• Those policy adapted by enterprises may vary from enterprises to enterprises ,like: Valuation of Inventories Treatment of goodwill Method of Depreciation
Fundamental assumption in Financial statement
• Assumption for preparation and presentation of financial statement: – Going Concern – Consistency – Accrual (Disclosure is necessary if any of them are not followed)
Selection of Accounting Policies
• Prudence: Provide for all probable losses but don’t recognize unrealized profits • Substance over form: The accounting treatment and presentation in the financial statement of transaction and event should be governed by their substance and not merely by legal form • Materiality: Financial statement should disclose all material Items i.e. the knowledge of which might influence the decision of the user of financial statement.
Disclosure of Accounting Policies
• The disclosure should form part of the financial statement and normally at one place • Material effect due to change in accounting policy should be disclosed
• Disclosure of accounting policies or of changes their in ,can not remedy a wrong or inappropriate treatment
• If any accounting assumption is dosent followed the fact should be disclosed
Thank You…
doc_284195857.pptx