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PRESENTED BY:
SAKSHI (039)ABHISHEK (O01)RAGHAV ()SHWETA(041)
NITESH ()
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GAAP
Generally accepted accounting principles set of standards and
rules that are recognized as a
general guide for financial reporting
means that these principles must have substantial
is a collection of methods used to process,prepare, and present
public accounting
information
includes standards, conventions & rules whichaccountants
follow during the preparation offinancial statement
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ACCOUNTING PRINCIPLES
ACCOUNTING PRINCIPLES ARE BEST POSSIBLESUGGESTIONS BASED UPON
PRACTICALEXPERIENCE AND REASON.
ACCOUNTING PRINCIPES ARE DEVELOPED FORCOMMON USAGE TO ENSURE
UNIFORMITY &UNDERSTANABILITY
ACOUNTING PRINCIPLES ARE NOT RIGIDACCOUNTING PRINCIPLES ARE
GENERALLY
ACCEPTABLE
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TYPES OF ACCOUNTING
PRINCIPLES
BUSINESS ENTITY CONCEPT .
GOING CONCERN CONCEPT .
ACCRUAL CONCEPT
MONEY MEASUREMENT CONCEPT ACCOUNTING PERIOD CONCEPT
REVENUE OR REALIZATION CONCEPT
COST PRINCIPLE
MATCHING PRINCIPLE FULL DISCLOSURE PRINCIPLE
RELIABILITY PRINCIPLE
DUAL ASPECT PRINCIPLE
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BUSINESS ENTITY CONCEPTThis concept hold that business is
separate from its owners.
Transactions are recorded from the viewpoint of business.
Balance sheet must reflects financial position of
business alone .
Owners being considered separate from business, theyare treated
as creditors to the extent of their capital.
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GOING CONCERN
CONCEPT
This concept holds that a business shall continuefor an
indefinite period.
There is no intention to close the business.
Enterprise will continue in operation long enough to carry
out its existing objectives.
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ACCRUAL CONCEPT
This concept holds that a transaction is recorded at thetime
when it has taken place
Not when the cash settlement has taken place.
It recognizes the assets, liabilities, income and expensesas
earned at the time the goods or services are sold to
the customer.
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MONEY MEASUREMENT
CONCEPT
This concepts hold that transactions and eventsthat can be
expressed
in monetary terms are recorded
Accounting has money as the common denominatorin recording and
reporting all transaction
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ACCOUNTING PERIOD
CONCEPT
This concept holds an importance to the users of
accountinginformation as they can make an assessment of the
enterprise at regular intervals
Life of an enterprise is divided into time intervals termedas
ACCOUNTING PERIOD
Generally in INDIA its one year from 1st April of an year
till31st march of a subsequent year
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REVENUE OR REALIZATION
CONCEPT
Recognizing revenue and receipt of amount are twoseparate
aspects.
Revenue recognition principle dictates that revenue
should be recognized in the accounting period in which itis
earned
When a Sale is involved, revenue is recognized at the pointof
sale
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COST PRINCIPLE
An asset is recorded in the books at the price paid toacquire
it.
This cost is basis for all subsequent accounting forthe
asset.
The market value of an asset may change with passage of timebut
for an accounting purpose it shown at its book value.
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MATCHING PRINCIPLE
This principle states that expenses be matched with revenues
in
the period in which efforts are made to generate revenues.
Cost incurred to earn the revenue should be set out against
revenu
in the period during which it is earned
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FULL DISCLOSURE
PRINCIPLE
This principle holds that there should be complete
&understandable reporting on the financial statements ofall
significant information relating to the economicaffairs of the
entity.
It emphasizes that the financial statement should makefull
disclosure of material financial information.
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RELIABILITY PRINCIPLE
The reliable principle holds that accounting should befree from
personal bias.
All accounting transactions should be evidenced and
supported by business documents.
To be reliable it can be depended on and must beverifiable.
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DUAL ASPECT
PRINCIPLE
This principle holds that every transaction entered by
anenterprise shall have two aspects
This state that there are two aspects of accounting,
onerepresented by the assets of the business and the other bythe
claims against them.
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INSTITUTION INFLUENCEINDIAN GAAP
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MINISTRY OF
CORPORATE AFFAIRS
INTERNATIONAL
ACCOUNTING
STANDARDS BOARD
INTERNATIONAL
FEDERATION OF
ACCOUNTANTS
SECURITIES AND
EXCHANGE BOARD OF
INDIA
INSTITUTE OF
CHARTERED
ACCOUNTANTS OF
INDIAINCOME TAX
AUTHORITIES
THE COMPTROLLER
& AUDITOR
GENERAL OF INDIA
RESERVE BANK OF
INDIA
INDIAN
GAAP
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