Professional Documents
Culture Documents
Session Title:
Introduction to Accounting Standards, its
objective, basis of accounting, Accounting
Standards issued by ICAI and IPSAS
Standards (Accrual basis and Cash Basis)
with their objective, Revisiting Accounting
Framework, International efforts and reforms
made in India. TFC and formation of GASAB,
Operational Framework issued by GASAB,
Progress of GASAB so far, list of IGASs and
IGFRSs with their objectives.
SESSION OVERVIEW:
Session Structure:
1. Introduction to Accounting Standards.
2.
Introduction:
Financial Statements
Accountin
g
Standards
(ASs) No.
Accounting
Standards on
AS 1
Disclosure of
Accounting
Policies
AS2
Valuation of
Inventories
AS3
Cash Flow
Statements
AS4
Contingencies
and Events
Accounting Accounting
Standards Standards on
(ASs) No.
AS5
Net Profit or
Loss for the
period, Prior
Period items
and changes in
Accounting
Policies.
AS6
Depreciation
Accounting
AS7
Construction
Contracts
Accountin Accounting
g
Standards
Standards on
(ASs) No.
AS8
Accounting
for Research
and
Development
AS9
Revenue
Recognition
AS10
Accounting
for Fixed
Assets
AS11
The effects of
Changes in
Foreign
Exchange
Rates
(Revised
2003)
accounting
for
research
and
Accountin Accounting
g
Standards
Standards on
(ASs) No.
AS12
Accounting
for
Governmen
t grants
AS13
Accounting
for
investment
s
AS14
Accounting
for
Amalgamatio
n
AS15
Employees
Benefit
(Revised
2005)
AS16
Borrowing
costs
Accountin Accounting
g
Standards
Standards on
(ASs) No.
AS17
Segment
Reporting
AS!8
Related
Party
Disclosures
AS19
Leases
AS20
Earning Per
share
AS21
Accountin Accounting
g
Standards
Standards on
(ASs) No.
AS22
AS23
Accounting
for
Investment
s in
Associates
in
Consolidate
d financial
statements
AS24
Discontinui
ng
operations
AS25
Interim
Financial
Reporting
for
the
the
Accountin Accounting
g
Standards
Standards on
(ASs) No.
AS26
Intangible
Assets
AS27
Financial
Reporting
of Interests
in Joint
Ventures
AS28
Impairment
of Assets
AS29
Provisions,
Contingent
Liabilities
and
Contingent
Assets
Accountin Accounting
g
Standards on
Standards
(ASs) No.
AS30
Financial
Instruments :
Recognition and
Measurement and
Limited Revisions to
AS 2, AS 11 (revised
2003), AS 21, As 23,
AS 26, AS 27, AS 28,
and AS 29
AS31
Financial
Instruments:
Presentation
AS32
Financial
Instruments:
Disclosures, and
Limited Revision to
Accounting
Standards(AS) 19 ,
leases
IPSAS 1
Presentation
of Financial
Statements
IPSAS2
Cash
Flow
It sets out requirements for the
Statements
presentation of the cash flow statement and
related disclosures.
IPSAS3
Net Surplus
or Deficit for
the
period,
Fundamental
Errors
and
changes
in
Accountin Accounting
g
Standards
Standards on
IPSAS No.
IPSAS4
The effect of
changes in
Foreign
Exchange
Rates
IPSAS 5
Borrowing
Costs
IPSAS 6
Consolidated
Financial
Statements
and
Accounting
for
Controlled
entities
Accountin Accounting
g
Standards
Standards on
IPSAS No.
IPSAS 7
Accounting
This Standard provides the basis for
for
accounting for ownership interests in
Investments associates.
in Associates
IPSAS 8
Financial
This Standard provides the basis for
Reporting of accounting for interests in joint ventures
Interests in
Joint
Ventures
IPSAS 9
Revenue
from
Exchange
Transactions
The objective
prescribe the
revenue arising
and events.
IPSAS 10
Financial
Reporting in
Hyperinflatio
nary
Economics
of this Standard is to
accounting treatment of
from exchange transactions
Accountin
g
Standards
IPSAS No.
Accounting
Standards
on
IPSAS 11
Construction
Contracts
IPSAS 12
Inventories
IPSAS 13
Leases
IPSAS 14
Events after
the
Reporting
Date
Accountin
g
Standards
IPSAS No.
Accounting
Standards
on
IPSAS 15
Financial
Instruments:
Disclosure
and
Presentation
IPSAS 16
Investment
Property
IPSAS 17
Property,
The principal issues in accounting for
Plant
and property, plant and equipment are the
Investment
timing of recognition of the assets, the
determination of their carrying amounts
Accounti
ng
Standard
s IPSAS
No.
Accounti
ng
Standar
ds on
IPSAS 18
Segment
Reporting
IPSAS 19
Provisions
,
Continge
nt
Liabilities
and
Continge
nt Assets
IPSAS 20
Related
Party
Accounting
Objectives of the Standards
Standards on
PART 1 REQUIREMEN
T
1.1
Scope of the
requirement
1.2
Cash Basis
Sectio
n
Accounting
Objectives of the Standards
Standards on
1.3
Presentation
and
Disclosure
Requirement
1.4
General
Consideratio
n
It consists standards on
Reporting Period
Timeliness
Authorization Date
Information about the entity
Restrictions on cash balances and access to
borrowings
1.5
Correction of
errors
Section
Accounting
Objectives of the Standards
Standards on
1.6
Consolidated
Financial
Statements
1.7
Foreign
Currency
1.8
Effective
date of
Sections 1.1
to 1.7 of Part
1 and
Transitional
Provisions
Sectio
n
Accounting
Standards
on
1.9
Presentatio
n of Budget
Information
in Financial
Statements
1.10
Recipients
of External
Assistance
PART 2 ENCOURAG
ED
ADDITIONA
L
DISCLOSUR
ES
Sectio
n
Accounting
Standards
on
2.1.2
Future
Assets that are used to generate net cash
Economic
inflows are often described as embodying
Benefits
future economic benefits.
and Service
Potential
2.1.3
to
2.1.5
Going
Concern
2.1.6
to
2.1.7
Sectio
n
Accounting
Standards
on
2.1.8
Distinct
from
ordinary
activities
2.1.9
Not
Expected to
Recur in
the
Foreseeabl
e Future
2.1.10
Outside the
Control or
Influence of
the Entity
Sectio
n
Accounting
Standards
on
2.1.11
to
2.1.14
2.1.15
to
2.1.17
Administer
ed
Transaction
s
2.1.18
to
2.1.20
Revenue
Collection
2.1.21
Passthrough
Cash Flows
Sectio
n
Accountin
g
Standards
on
2.1.22
Transfer
Payments
2.1.23
to
2.1.30
Disclosure
of Major
Classes of
Cash Flows
Section
Accountin
g
Standards
on
2.1.33
to
2.1.35
Disclosure
of Assets,
Liabilities
2.1.36
2.1.40
Compariso
n with
Budgets
2.1.41
to
2.1.43
Consolidat
ed
Financial
Statement
s
Sectio
n
Accounti
ng
Standard
s on
2.1.44
to
2.1.48
Acquisition
s
and
Disposals
of
Controlled
Entities
and Other
Operating
Units
2.1.49
to
2.1.50
Joint
Ventures
2.1.51t
o
2.1.52
Financial
Reporting
in
Hyperinfl
ationary
Section
Accounting
Standards
on
2.1.53
to
2.1.58
The
Restateme
nt
of
Financial
Statements
2.1.59
2.1.60
to
2.1.61
Section
Accounting
Standards
on
2.1.62
to
2.1.63
Selection
and Use of
the
General
Price Index
2.1.64
to
2.1.65
Assistance
Received
From NonGovernmen
tal
Organizatio
ns (NGOs)
2.1.66
to
2.1.93
Section
Accounting
Standards
on
2.2
2.2.1 to
2.2.2
Presentati
on of the
Statement
of Cash
Receipts
and
Payments
2.2.3 to
2.2.6
Scope
of
Consolidat
ed
Statement
s
Exclusions
from
the
Economic
Entity
(8) In India:
(i) Report of Admn. Reform commission on Accounts and Audit
(1968).
(ii)Multi-tier
Classification
System
introduced
(A.K.Mukherjee
Committee)
(iii) Management Accounting at the Union Government ( 1976 Budget
speech of the Finance Minister)
(iv) Departmentalization scheme of Union Government introduced in
1976.
(v) Financial Advisory Unit (FA System) introduced in 1980.
(vi) Classification system rationalized (R.C.Ghai Committee) in 1987
(vii) EAS Sarma Committee report on FRBM in 2000
(viii) Ahuwalia Committee, 2004 (RBI) on
Medium term fiscal policy ( 3 year rolling target receipts, payments,
borrowing etc)
Fiscal Policy Strategy Statement (Taxation, Borrowings, Pricing,
Guarantees, Subsidy etc.)
Macro economic framework statement (GDF, Fiscal balance, BOP etc)
(ix)
Lahiri
Committee
(2004)
introduced
Multidimensional
classification) on functional and economic classification
(x) Twelfth Finance Commission (TFC) recommends Accrual
Accounting.
(xi) New GFR (General Financial Rules) was introduced in 2005.
Expenses
Revenue
s
Assets
Liabilities
Contingen
t
Liabilities
Current
Stage
ExpCurrent
and
Capital
Receipts
Financi
al
Assets
Stock of Public
Debt and
Borrowings on
Public Account
Guarantees
Stage I
Current
Receipts
Expense
on accrual
basis and
Capital
Expenditur
e on cash
basis
Financi
al
Assets
Stock of Public
debt and
Borrowing on
Public Account +
Payables
Guarantees
Stages
Expenses
Revenue
s
Assets
Liabilities
Conting
ent
Liabiliti
es
Stage II
Current
Expenses
on Accrual
basis and
Capital
Expendit
ure on
Cash
Basis
( Excludin
g
Expendit
ure on
Military
Assets)
Non Tax
Revenue
s on
Accrual
Basis
+
Receivabl
es
+
Tax
Revenue
on Cash
Basis
Financial
Assets
+
Receivabl
es
+
Military
Assets
Guarant
ees
Stage III
All
expenses
on accrual
basis
+
Depreciati
on
---do---
All Assets
All liabilities
(except superannuation
benefits,
compensated
leaves, provisions
and social
All
explicit
conting
ent
liabilitie
s
(Excluding
infrastructure,
land, heritage,
intangible
assets)
Stages
Expenses
Revenues
Assets
Liabilities
Conting
ent
Liabiliti
es
Stage IV All
expenses
on accrual
basis
+
Depreciatio
n
+
Provisions
Non Tax
Revenues
on Accrual
Basis
+
Receivables
+
Tax Revenue
on Cash
Basis
All Assets
including
infrastruct
ure and
land
(excluding
heritage and
intangible)
All Assets
including
infrastructure
and land
(excluding
heritage and
intangible)
All
explicit
conting
ent
liabilitie
s
Stage V
All
Revenues
on accrual
basis
All Assets
All Liabilities
All
explicit
conting
ent
liabilitie
s
All
Expenses
(i)
Statement
of
Financial
Position
MDA
Statement
of
Financial
Performan
ce
Statement
of changes
in Net
Assets
Cash
Flow
Stateme
nts
Appropriation
Account
s
Account
ing
Policies
and
Notes
to the
Financi
al
Statem
ents
Realizatio Measur
n Criteria ement
Recommended basis of
Accounting (Accrual)
Salaries, Wages,
Dearness
Allowance,
Traveling
Allowance, office
expenses, etc
Obligation
Agreed
established
amount
in the period
of utilization
of service
Interest
Obligation
established
at the time
of entering
into the loan
agreement.
Liability to be recognized
periodically on the due date for
payment. Expense recognition to
be in the period for which it is
charged under the head payable,
regardless of when the payment is
made.
Multiple
of loan
value,
period,
and rate
of interest
Item of
Expenditure
Realizatio Measur
n Criteria ement
Recommended basis of
Accounting (Accrual)
Contribution to PF
and
defined
contribution
to
Superanuation
Funds
Obligation
Agreed
established
amount
when
an
employee
enters
service
Gratuity and
Superanuation
liabilities
Obligation
established
when an
employee
enters
service
To be
determine
d on the
basis of
actuarial
valuation
Leave
encashment
benefit
Obligation
established
when an
employee
enters
service
To be
determine
d based
on service
rules
Measure
ment
Recommended basis of
Accounting (Accrual)
Rents
Right to charge
Agreed
rent established at amount
the time of
entering into
agreement,
realizable on due
date for payment
of rent.
Hire
charges
of
machine
ry
Right established
at the time of
entering the
contract
Agreed
amount
Interest
Realizable on the
due dates for the
interest payment
Function of
loan value,
period and
rate of
interest
Standard on:
IGAS 1
Guarantees given
by
Governments:
Disclosure
Requirements
relating to the form
of accounts of the
Union, States and
Union
Territory
Governments (with
legislatures)
IGAS 2
Accounting
classification
Grants-in -Aid
Notified/pr
epared/dra
ft stage
Notified on
20th
December
2010
Standa
rds
Standard
on:
Notified/prepa
red/draft
stage
IGAS 3
Cash
Flow Under
Statements
consideration of
Government of
India for
notification
IGAS 4
General
Purpose
Financial
Statements of
Governments
To
Under
consideration of
Government of
India for
notification
Standa
rds
Standard
on:
Notified/prepa
red/draft
stage
IGAS 5
Loans
and
Advances
Made
by
Governments
Under
consideration of
Government of
India
for
notification
IGAS 6
IGAS 7
Foreign
Currency
transactions
and Loss or
Gain
by
Exchange
Rate Variation
Under
consideration of
Government of
India
for
notification
Standa
rds
Standard
on:
Notified/prepa
red/draft
stage
IGAS 8
Contingent
Proposed
Liabilities
(other
than
Guarantees)
and
Contingent
Assets:
Disclosure
Requirements
IGAS 9
Government
Investment in
Equity
Proposed
IGAS 10
Public Debt
and other
Liabilities of
Governments:
Disclosure
Under
consideration of
Government of
India for
notification
Standar
d on:
Notified/
prepared
/draft
stage
IGFRS
Inventori
es
Proposed
IGFRS 2
Property, Prepared
Plant and
Equipmen
t
IGFRS
Revenue
from
Exchange
Transacti
ons
Proposed