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ACCOUNTING STANDARDS IN INDIA, , WITH INTERNATIONAL FINANCIAL, REPORTING STANDARDS (IFRS), , , , , , MEANING OF ACCOUNTING STANDARDS, , Accounting stanards are designed to harmonise diverse accounting policies and practices., It is a selected set of accounting policies or broad guidelines regarding the principles, concepts, and conventions issued by Institute of Chartered Accountants of India. Accounting Standards, are issued for the preparation of uniform and consistent financial statements and also for other, disclosures affecting the different users of accounting informations. Its nature is, recommendatory or mandatory., , “Accounting Standards are written policy documents, which are issued by an expert, accounting body or Government or other regulatory body, covering the aspects of recognition,, measurement, accounting treatment, presentation of disclosure of accounting transactions in, financial statement.”, , CHARACTERISTICS OF ACCOUNTING STANDARDS, , According to practical accounting nature of accounting standards are as follows :, , (1) Accounting standards are recommendatory or mandatory in nature., , (2) Accounting standards are made taking into account the laws of the country, hasiaces, customs, business environments, business laws, economic policies and Constitution of, the country., , (3) It makes accounting informations and financial statements more comparable, flexible, and meaningful., , (4) It serves the accountants as a guide in the accounting treatment. They provide basis, on which accounts are prepared. For example, Accounting Standard-2 provides the, methods of valuation of inventions., , (5) It determines the accounting policies and practices., , (6) It prescribes a suitable accounting treatment among the alternatives., , (7) It provides the bases of accounting process and the financial areas of accounting., , (8) It acts as a harmonizer and removes the conflict on accounting issues., , (9) It is descriptive in nature and serves as a dictator of accounting principles., , (10) It is an accounting rule and procedures relating to measurement, valuation and, disclosure issued by the Council of the Institute of Chartered Accountants of India., , (11) According to the Preface of the Statements of Accounting Standards, “The accounting, standards by their very nature cannot and do not override the local regulations which, govern the preparation and presentation of financial statements in our country.

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LATEST STATUS OF ACCOUNTING STANDARDS ISSUED BY THE ICAI, ‘The Institute of Chartered Accountants of India has so far issued the following standards, , effective from the date noted against them :, , , , , , Number of the, Accounting, Standard (AS), , AS-1, AS-2 (Revised), AS-3, AS-4 (Revised), , AS-5, , AS-6, , AS-7 (Revised), AS-S, , AS-9, , AS-10, , AS-11, , AS-12, AS-13 (Revised), AS-14 (Revised), AS-15, AS-16, AS-17, AS-18, , AS-19, AS-20, , AS-21 (Revised), AS-22, , AS-23, AS-24, AS-25, , AS-26, AS-27, , AS-28, , AS-29 (Revised), , —_—————_—___——, Note 1 ; AS-21, AS-23 and AS, , an entity i, , Note 2 : Applicability of, Standards) Rules not by ap), , Note 3: If an entity is required or elect to prep, , standard., , Title of the Accounting Standards, , Disclosure of Accounting Policies, Valuation of Inventories, , Cash Flow Statement, , Contingencies and Events Occurring, after the Balance Sheet Date, , Net Profit or Loss for the period,, Prior Period Items and changes in, Accounting Policies, , Depreciation Accounting withdrawn, and included in AS 10, , Construction Contracts, , Withdrawn and included in AS-26, Revenue Recognition, , Property, Plant and Equipment, , The Effects of Changes in Foreign, Exchange Rates (Companies (Accounting, Standards Amendment Rules, 2018)], Accounting for Government grants, Accounting for Investments, Accounting for Amalgamations, Employee Benefits, , Borrowing Costs, , Segment Reporting, , Related Party Disclosures, , Leases, , Earnings Per Share, , Consolidated Financial Statements, Accounting for Taxes on Income, , Accounting for Investment in Associates, in Consolidated Financial Statements, Discontinuing Operations, , Interim Financial Reporting, , Intangible Assets, Financial Reporting of Interest in, Joint Ventures, , Impairment of Assets, , Provisions, Contingent Liabilities, and Contingent Assets ', , , , Date from, , which mandatory applicable, , (accounting periods, , _commencing on or after) __, , 1-4-1993 All, , 1-4-2016 All, , 1-4-2001 Level-I/Non-SMC, , 1-4-2016 All, , 1-4-1996 All, , 1-4-2002 All, , 1-4-1993 All, , 1-4-2016 All, , 1-4-2004 All, , 1-4-1994 All, , 1-4-2016 All, , 1-4-2016 All, , 1-4-2016 All, , 1-4-2000 All, , 1-4-2001 Level-/Non-SMC, , 1-4-2001 Level-I & Tall, companies, , 1-4-2001 AU, , 1-4-2001 Level-I, all companies, , 1-4-2016 See Note-1, , 1-4-2002 -For Listed, , Companies, , 1-4-2002 -Companies, , other than, , listed 1-4-2006 -All, , 1-4-2002 See Note-1, , 1-4-2004 Level-I & IWall, companies, , 1-4-2002 Level-I/Nou-SMC, Note 3, , 1-4-2003 All, , 1-4-2002 See Note 1, , 1-4-2004 -Level-I, , 1-4-2006 -Level-II, , 1-4-2008 -Level-IlL, , 1-4-2016 All, , , , -27 (relating to consolidated financial statements) are required to be complied with by, prepares and presents consolidated financial statements., , if the entity, d d, Accounting Standards to companies will be governed by the Companies (Accounting, , plicability as announced by the ICAI as above., are and present an interim financial report, it should comply with this

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CONTENTS OF ACCOUNTING STANDARDS, In practice, accounting standard has following contents :, , (1) A statement of the concepts and fundamental accounting principles defining to the, accounting standard,, (2), , Definition of the terms used in the Accounting Standard., (3) The manner of applying accounting principles for formulating the accounting standard., (4) The presentation of disclosure requirements in complying with accounting standard., (5) Class of enterprises to which the accounting standard will apply., (6) Date from which the accounting standard will be effective., (7) Nature of accounting standard—recommendatory or mandatory., , OBJECTIVES OF ACCOUNTING STANDARDS, The objectives for accounting standards can be listed as follows :, , (1) To bring uniformity in accounting policies, methods, principles and disclosure of, accounting process in case of necessity., , (2) To improve the relevancy, simplicity, credibility and reliability of financial statement., , (3) To help in explaining the accounting terminology., , (4) To remove the rigidity of accounting policies., , (5) To present a logical view on controversial accounting practices., , (6) To give scientific approach to disclosure and presentation of financial statement., (7) To prevent the users from reaching and misleading conclusions., , (8) To prevent manipulation of data by the management and others., , (9) To determine the managerial accountability, corporate accountability and financial, accountability., , (10) To make financial accounting standardised internationally., , INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS), CONCEPT OF IFRS, , International Financial Reporting Standards (IFRS) is a set of accounting standards, , developed by an independent not-for-profit organisation called the international accounting, standards board (IASB)., , The goal of IFRS is to provide a global framework for how public companies prepare and, disclose their financial statements. IFRS provides general guidance for the preparation of, financial statements, rather than setting rules for industry specific reporting., , FEATURES OF IFRS, , 1. Relevance : So that it makes a difference to the decisions about a company made by users, of the statements., , 2. Comparability : You can compare financial statements from one period to the next or for, two companies in the same industry so that you can make informed decisions about the, companies., , 3. Understandability : You present and classify information clearly and concisely to make, it understandable to users., , 4. Verifiability : Different people could reach the same decision based on the information,, but not necessarily reach complete agreement., , 5. Timeliness : You make information available to users in good time. Historical information:, quickly becomes out of date.

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—o TS., , , , . benks, insurance exmpanies and stock exchanges, , , , Advantages of IFRS, , 1 It allows for greater comparability., , 2. It is beneficial to new and small inv e, , 3. It creates more flexibility., Disadvantages of IFRS, , L It requires high costs., , 2. It is prone to manipulation., , 3. It is not globally accepted., , IMPORTANCE AND PROCEDURE, , The term IFRS comprises IFRS issued by IASB; IAS issued by International Accounting, Stendards Committee (IASC); Interpretations issued by the Standard Interpretations, Committee (SIC) and the IFES Interpretations Committee of the IASB. 7, , lnternational Financial Reporting Standards IF RSs) are considered 2 “principles baseY, set of standards. In fact, they establish broad rules rather than dictating specific treatments., Every major nation is moving teward adopting them to some extent. Large number ofauthorities, requires public companies to use IFRS for stock-exchange listing purposes, and in 2ddition,, , ay use them for their statutorily required, , reports. So over the next few years, thousands of, , , , , , , , companies will adopt the international, standards. This requirement will affect about 7,000 enterprises, including their subsidiaries., equity investors and joint venture partuers. The increased use of IFES is not limited to, public-company listing requirements or statutory reporting. Many lenders and regulatory and, Zovernment bodies are looking to IFRS to fulfil local financial reporting 0 jligations related to, fimancing or licensing., , , , , , , , , , List of IFRS, 25 on ZO46-2019, Tithe Originally issued, , TPES1. | First-time Adoption of International Financial 203, , IFES 2 2004, , IPRS 2 ZOLA, , IFES 4 2004, , IFRS5 ‘ r Aszete held for sale and disentinned 2004, , IPRS6 d Evaluation of Mineral Resources 2084 LiZK6, IFRS7 1 venta Disclosures BS 11.2007, IFES 3 Operating Segmentz 25 11.2909, IFRS = Financia] Instrumente 2008, } 11.2018, , updated 2914, , IFRS 10 d Financial Statementa 2011 112013, IRs it B 2011 112913, IFRS 12 | in other Entities 2011 112912, IFES 12 | 3 ext ir 1.12013, IFES 14 | Regulatory Deferral Accounts 2014 112016, IPRS 15 | Revenue from Contracts with Customers 2014 j 1126018, IFRS 16 | Leases 2016 112019, IFRS 17 Insurance contracts i 217 112021, , , , INDIAN ACCOUNTING STANDAEDS (Ind AS), , Indian Accounting Standards (Ind-AS) are the International Financial Reporti, Standards (IFRS) converged standards issued by the Central Government of India ae, supervision and control of Accounting Standards Board (ASB) of ICAI and in consultation with, National Advisory Committee on Accounting Standards (NACAS)., , National Advisory Committce on Accounting Standards (NACAS) recommend these, standzrds to the Ministry of Corporate Affairs (MICA). MCA has to spell out the accounting, standards applicable for companies in India. 3

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The Ind AS are named and numbered in the same way as the corresponding International, Financial Reporting Standards (IFRS). 4, The Indian Accounting Standards (Ind AS), as notified under section 133 of the Companies, Act, 2013, have been formulated keeping the Indian economic and legal environment in view, and with a view to converge with IFRS Standards. 4, As per the Notification, Indian Accounting Standards (Ind AS) converged with, International Financial Reporting Standards (IFRS) have been implemented on voluntar}, , basis from Ist April, 2015 and mandatory from Ist April, 2016. |, CONVERGENCE TO IFRS IN INDIA., , Increasingly, Indian accountants and businessmen feel the need for convergence with IFRS, Capital markets provide an important explanation for this change. Some Indian companies art, already listed on overseas stock exchanges and many more will list in the future. Internationalli, acceptable accounting standards are becoming the language of communication for Indiar, companies. a, , Also, the recent stream of overseas acquisitions by Indian companies makes a compellin:, case for adoption of high quality standards to convince foreign enterprises about the financia, standing as also the disclosure and governance standards of Indian acquirers. Convergence with, IFRS would require several changes in Indian laws and decision processes. i, , In India, the Institute of Chartered Accountants of India (ICAI) is on the way toward:, convergence of its Standards with Global Standards. Divergences have been minimized to thé, maximum possible extent in the areas wherein full convergence is difficult. Recognizing the, growing need of full convergence of Indian Accounting Standards with IFRSs, ICAI constituted, a Task Force to examine various issues involved. Full convergence involves adoption of IFRS:, in the same form as that issued by the IASB. While formulating the Accounting Standards, ICA!, recognizes the legal and other conditions prevailing in India and makes deviations from the, corresponding IFRSs. i, , The Accounting Standard Board in consultation with the Ministry of Corporate Affairs, (MCA) for convergence of Indian Accounting Standards with International Financial Reporting, Standards (IFRS), has decided that there will be two separate sets of Accounting Standards viz, (i) Indian Accounting Standards converged with the IFRS standards which are being converged, by eliminating the differences of the Indian Accounting Standards vis-a-vis IFRS (known as Ind, AS) and (ii) Existing Notified Accounting Standards. a, , As per Section 133 of the Companies Act, 2013, the Central Government may prescribe Ee, standards ofaccounting or any addendum thereto, as recommended by the Institute of Charte:, Accountants of India, constituted under section 3 of the Chartered Accountants Act, 1949, is, , constitution with and after examination of the recommendations made by the National Financia, Reporting Authority (NFRA). 4, BENEFITS OF CONVERGENCE WITH IFRSs :, There are many beneficiaries of convergence with IFRSs such as the economy, investo, industry etc. 3, The Economy i, , When the markets expand globally the need for convergence increases since thé, convergence benefits the economy by increasing growth of its international business., facilitates maintenance of orderly and efficient capital markets and also helps to increase, , capital formation and thereby economic growth. It encourages international investing, thereby leads to more foreign capital flows to the country. is, Investors, , A strong case for conv, , , , , , , , . C i ergence can be made from the viewpoint-of the investors, who wi:, , to invest outside their own country. Investors want the information that is more reley, reliable, timely and comparable across the jurisdictions. Financial statements prepared usi, a common set of accounting standards help investors better understand investm