Accounting Standards Accounting for Managers

Assist the ASB with important or significant accounting issues where there exists An accounting standard or a provision of companies legislation (including the Requirement to give a true and fair view) and where unsatisfactory or conflicting Interpretations have developed or seem likely to develop; and

k.chandrasekher12/11/2013

A Study on

Accounting Standards

Mini Project Report in A ccoun t i ng f or M a na g e r s Submitted to JNTU, Kakinada in

Partial Fulfillment for the Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted By

Koppula.Chandra sekher

(Reg. No. 13491E0037).

DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION

QIS COLLEGE OF ENGINEERING & TECHNOLOGY

An ISO 9001: 2008 Certified Institution and Accredited by NBA

(Affiliated to JNTU, Kakinada and Approved by AICTE)

Vengamukkapalem, Pondur Road

ONGOLE –523 272 .

11/12/2013

INDEX:

S. No Contents Page No’s

1. Abstract 03

2. Key wards 03

3. Methodology 03

4. Introduction 04

5. Objectives 04

6. Indian accounting Standards 04

7. List of Indian Accounting Standards 05,06

8. Examples of Disclosures 06

9. Conclusion 06

Reference

Accounting Standards

Abstract:

We examine whether application of International Accounting Standards (IAS) is associated with higher accounting quality. The application of IAS reflects combined effects of features of the financial reporting system, including standards, their interpretation, enforcement, and litigation. We find that firms applying IAS from 21 countries generally evidence less earnings management, more timely loss recognition, and more value relevance of accounting amounts than do matched sample firms applying non-U.S. domestic standards. Differences in accounting quality between the two groups of firms in the period before the IAS firms adopt IAS do not account for the postadoption differences. Firms applying IAS generally evidence an improvement in accounting quality between the pre- and post adoption periods. Although we cannot be sure our findings are attributable to the change in the financial reporting system rather than to changes in firms' incentives and the economic environment, we include research design features to mitigate effects of both.

Key words:

financial instrument, financial asset, financial liability, equity instrument

Methodology:-

The methodology and assumptions used for estimating future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss experience.

That allows for the use of hedge accounting and takes advantage of existing risk management systems so as to avoid unnecessary changes to it and to avoid unnecessary bookkeeping and tracking.

Introduction:According to “KOHILOR” Defined A/C standard as mode of conduct imposed Accountants By custom, law (or) professional body.To achieve board wide accepence, uniformity and meaning in matters of A/C. An international agency called as “international A/C Standard comity” was installed on “jun29th 1973” .which it held the headquarters at “London” in 2001 the IASC was restricted and now it is known as “International A/C Standers Board”(IASB).the standard issued by the “IASB” are called “international financial reporting standards”.The main purpose of A/C standards to ensure that financial information is treated in the financial statement according to a specific standards and method use by different enterprises for presenting information should permit it appropriate comparison to be made.

Objectives of ( IASC) : To The basic objective of Accounting Standards is to remove variations in the

treatment of several accounting aspects and to bring about standardization in presentation. They intent to harmonize the diverse accounting policies followed in the preparation and presentation of financial statements by different reporting enterprises so as to facilitate intra-firm and inter-firm comparison.

To formulate & publish the public interest A/C Standards to be observed in the presentation of financial statements and to promote the world wide accept ants.

To The objective of this Standard is to establish principles for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. Requirements for presenting information about financial instruments are in Ind AS 32, Financial Instruments: Presentation. Requirements for disclosing information about financial instruments are in India AS 107 Financial Instruments: Disclosures.

INDIAN ACCOUNTING STANDARDS:

Indian Accounting Standards, (abbreviated as India AS) are a set of accounting standards notified by the Ministry of Corporate Affairs which are converged with “International Financial Reporting Standards (IFRS)”. These accounting standards are formulated by Accounting Standards Board of Institute of Chartered Accountants of India. Now India will have two sets of accounting standards viz. existing accounting standards under Companies (Accounting Standard) Rules, 2006 and IFRS converged Indian Accounting Standards (India AS). The India AS are named and numbered in the same way as the corresponding IFRS. NACAS recommend these standards to the Ministry of Corporate Affairs. The Ministry of Corporate Affairs has to spell out the accounting standards applicable for companies in India. As on date the Ministry of Corporate Affairs notified 35 Indian Accounting Standards (India AS). But it has not notified the date of implementation of the same.

LIST OF INDIAN ACCOUNTING STANDARDS

'IAS 1 Disclosure of Accounting policies"

*IAS 2 Valuation of Inventories

*IAS 3 Cash Flow Statement

*IAS 4 Contingencies and Events Occurring after the Balance Sheet Date

*IAS 5 Net Profit or Loss for the period, Prior Period Items and Changes in Accounting Policies

IAS 6 Depreciation Accounting

*IAS 7 Construction Contracts (revised 2002)'''

IAS 8 Accounting for Research and Development (AS-8 is no longer in force since it was merged with AS-26)

*IAS 9 Revenue Recognition

*IAS 10 Accounting for Fixed Assets

*IAS 11 The Effects of Changes in Foreign Exchange Rates (revised 2003),

*IAS 12 Accounting for Government Grants

*IAS 13 Accounting for Investments

*IAS 14 Accounting for Amalgamations

*IAS 15 Employee Benefits (revised 2005)

*IAS 16 Borrowing Costs

*IAS 17 Segment Reporting

*IAS 18 Related Party Disclosures

*IAS 19 Leases

*IAS 20 Earnings Per Share

*IAS 21 Consolidated Financial Statements

*IAS 22 Accounting for Taxes on Income.

*IAS 23 Accounting for Investments in Associates in Consolidated Financial Statements

*IAS 24 Discontinuing Operations

*IAS 25 Interim Financial Reporting

*IAS 26 Intangible Assets

*IAS 27 Financial Reporting of Interests in Joint Ventures

'*IAS 28 Impairment of Assets

*IAS 29 Provisions, Contingent` Liabilities and Contingent Assets

*IAS 30 Financial Instruments: Recognition and Measurement and Limited Revisions to IAS 2, IAS 11 revised 2003), IAS 21, IAS 23, IAS 26, AS 27, IAS 28 and IAS 29

*IAS 31, Financial Instruments: Presentation

*IAS 32, Financial Instruments: Disclosures, and limited revision to Accounting Standard

Resource: -http://en.wikipedia.org/wiki/Indian_Accounting_Standards#References.

Examples of Disclosures:-

(a) Where a company has not disclosed all significant accounting policies and has also not disclosed the accounting policies at one place.“The company has disclosed those accounting policies the disclosure of which is required by the Companies Act, 1956. Other significant accounting policies, viz., those relating to treatment of research and development costs and treatment of exchange gains and losses have not been disclosed nor have all the policies been disclosed at one place,This is contrary to Accounting Standard (AS) 1, ‘Disclosure of Accounting Policies’ issued by the Institute of Chartered Accountants of India??? We report that ....”

(b) Where a partnership firm35 does not make adequate disclosures regarding the revaluation of its fixed assets.“During the year, the enterprise revalued its land and buildings. The revalued amounts of land and buildings are adequately disclosed in the balance sheet. However, the method adopted to compute the revalued amounts has not been disclosed, which is contrary to Accounting Standard (AS) 10, ‘Accounting for Fixed Assets’ issued by the Institute of Chartered Accountants of India.

Resource: - “THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA NEW DELHI”.

Conclusion:The financial reporting standards that must be considered when preparing a company’s accounts. More standards are expected as the complexities of business transactions grow and accounting practice adapts to keep up with these changes. Such changes already observed in business are the use of derivatives and financial ‘instruments’.

References: "Indian Accounting Standards Converged with IFRS Notified" . Press

Information Bureau. Retrieved 25 February 2011 http://en.wikipedia.org/wiki/Indian_Accounting_Standards#References.