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written by Khatabook | October 25, 2021

What is the List of Accounting Standard

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Several countries follow different accounting standards like the International Financial Reporting Standards (IFRS) and their own countries' governmental and accounting institutes policies. India abides by Indian Accounting Standards (Ind AS), and the USA follows the Generally Accepted Accounting Procedures (GAAP) when preparing its financial statements policies. Kenya and Indonesia also pursue their accounting standards. However, globally the objectives and underlying accounting principles are the same. 

Imagine if each firm in India followed its own standards of accounting, it would be impossible to evaluate the progress or status of a firm’s financial health from its financial statements. This would drive investors away and affect economic progress. Hence the need for a uniform standard of procedures, policies and norms arises. The accounting standards are called by different names in different countries. But essentially they are the same and enable global reporting and measurement practices that will allow investors and accountants the world over to understand the financial statements.

What are accounting standards?

A list of rules, statements, guidelines, disclosures forms the accounting standards. It is listed by the overviewing accounting institutions to prepare consistent, uniform financial statements that list the mandatory disclosures in a common format. The 32 accounting standards list used in India is discussed below:

The Mandatory list of accounting standards with explanation

Let us take a brief look at how many accounting standards are there and the accounting standards summary. In India, the accounting standards are issued by the ICAI or Institute of Chartered Accountants of India and the 2006 Rules for Accounting Standards of Companies notified by the Government of India’s Ministry of Corporate Affairs, making these standards mandatory to follow. The accounting standards of India are adhered to by those who ready the financial statements like auditors, chartered accountants and preparers of taxes like Income Tax, GST etc.

Here are the 32 items on the accounting standards

AS 1- Accounting disclosure policies

Simply put, this standards list contains all significant accounting policies disclosures to be followed whenever a financial statement is presented or prepared.

AS 2- Inventories Valuation

This standard provides accounting standards in brief and the guidelines for determining the value of the inventories reported in financial statements. They also include the process of deciding the inventory cost, the Written Down Value (WDV) and more. 

AS 3- Cash Flow Statements

In these accounting standards with explanation, an enterprise's changes in the cash values or historical value changes are covered. The process of preparing the Cash Flow Statement or its changes from financing, investing, and operations are detailed here.

AS 4- Balance Sheet Date, events and contingencies thereafter

This standard cover the treatment of events and contingencies that occur post the date of drawing up the balance sheet.

AS 5- Prior Period Items, Net profit & Loss in the period, and Accounting Policy changes

This standard applies to organisations when preparing the profit or loss statement occurring in the firm’s normal activities. It also includes recording prior changes or extraordinary items and the changes in accounting policies and estimates.

AS 6- Depreciation Accounting

This standard is withdrawn, and matters related to depreciation are included in AS 10.

AS 7- Accounting of Construction Contracts

Construction contracts are covered in these accounting standards.

AS 8- Error corrections and changes in accounting policies

The changes in accounting policies and how to correct errors due to these changes are covered here.

AS 9- Revenue Recognition

This standard lists how to recognise revenue in the entity’s Profit & Loss Statement. For example, the rendering of services, the sale of goods, the interest charged or paid for, dividends, royalties etc. 

AS10- Plant, Property and Equipment

The accounting standard lists the accounting treatment for equipment, plant, and property, also called PPE standards.

AS 11- Changes in rates of Foreign Exchange Rates

The standard deals with accounting principles of transactions in foreign currency and the financial impact of rate changes in foreign exchange on operations and transactions.

AS 12- Government Grants

Government grants are covered by this accounting standard, also called the standards for duty drawbacks, subsidies, cash incentives etc.

AS 13- Investments Accounting

This accounting standard list is for investment accounting in the enterprise’s financial statements and mandatory disclosures.

Also Read: Fund Flow Statement - Meaning, Format And Examples

AS 14- Amalgamations Accounting

The standard deals with the accounting of reserves, goodwill etc., occurring in the amalgamation of firms.

AS 15- Employee Benefits

The standard prescribes the accounting disclosures and treatment of employee share-based payments/ benefits, not employee benefit plans.

AS  16- Borrowing Costs

The borrowing costs applied are dealt with here, and it does not cover the owner’s equity costs like preference share capital which is not a liability.

AS 17- Financial segments reporting

This list of accounting standards establishes reporting principles for different financial information types, products, segments, services, enterprise produce etc.

AS 18- Related party transactions disclosures

The disclosure standard is used in reporting related parties and applies to financial statements of both reporting enterprises.

AS 19- Lease transactions disclosures and accounting policies

This standard prescribes financial and operating leases' disclosures and accounting policies.

AS 20- Earnings per share

This standard deals with principles used in preparing and presenting the EPS or earnings per share on a uniform scale between enterprises for the same accounting period or for a single firm during different accounting periods. 

AS 21- Consolidated Statements principles

These accounting standards are about the procedures and regulations used in presenting and preparing consolidated financial statements. Consolidated accounting statements are prepared wherein the subsidiary and parent companies financial information is presented as a single economic entity. 

AS 22- Taxable Income Accounting

This standard is about accounting for the treatment of income taxes which may differ from the income in the financial statements.

AS 23- Investments in Associates Accounting

The standard for the presentation and preparation of an investor's Consolidated Financial Statements (CFS) covers the investments in associates accounting principles.

AS 24- Discontinuing Operations

This standard deals with the accounting principles when reporting the discontinuation of operations. This helps estimate the earnings-generating capacity, financial position, cash flows etc., by differentiating between continuing and discontinuing operations of an enterprise.

AS 25- Interim Financial Reporting

The standard is applicable when a firm elects to or is required to publish its interim financial report. It helps with prescribing the principles for the measurement and recognition of interim financial statements.

AS 26- Intangible Assets Accounting

AS 26 list of accounting standards deals with the intangible assets accounting treatment and refer to an organisation’s identifiable assets that are non-monetary and used or held in the supply or production of services, goods, for administrative purposes and more. 

AS 27- Reporting of interest in joint ventures

The AS 27 sets out the procedures and principles when accounting for a firm’s interest in joint ventures and reports liabilities, venture assets, expenses and income in the investor’s or venture’s financial statements.

AS 28- Assets Impairment

The AS 28 deals with procedures that a firm applies to ensure its reported assets are not more significant than the recoverable amount. If the carrying amount is greater than the amount to be recovered by sale or use of the asset, it is considered an impaired loss/asset. 

AS 29- Contingent Assets and Liabilities Provision

This standard lays out the measurement and recognition criteria/ bases for provisions applicable to contingent assets or liabilities. 

Non- Mandatory Accounting standards

ICAI announced the withdrawal of these non-mandatory accounting standards lists: 

AS 30 – Measurement and Recognition of Financial Instruments

AS 31- Presentation of Financial Instruments

AS 32- Disclosures required for reporting of Financial Instruments.

Global Accounting Standards

Across the globe, some of the accounting standards followed are discussed below

Indonesia: The accounting standards used are as per the Dewan Standar Akuntansi Keuangan aka DSAK and the Indonesian Board for Financial Accounting Standards falling under the IAI or Ikatan Akuntan Indonesia. Under the law, private and public companies must mandatorily follow the accounting standards notified by the DSAK-IAI.

Kenya: The financial statements in Kenya must mandatorily comply with the International Financial Reporting Standards (IFRS) and the Kenyan Institute of Certified Public Accountants Standard (ICPAK). It also mandates that all audits comply with International Standards on Auditing (ISA).

Also Read: Trial Balance: Rules Explained With Examples

Conclusion

Accounting standards are a must to ensure that all financial statements reporting or measurements follow an easily read uniform accounting procedure or norms. The accounting standards of India comprising accounting standards 1 to 32 are used by auditors, chartered accountants and preparers of taxes like Income Tax, Goods and Services Tax (GST) etc., when they prepare and present financial statements. The Indian accounting standards are set out by the Institute of Chartered Accountants of India (ICAI) and the 2006 Rules for Accounting Standards of Companies. The Government of India’s Ministry of Corporate Affairs’ notification makes these standards mandatory to follow. Download the Khatabook app for more information on accounting and business tips.

FAQs

Q: Are all standard lists of accounting to follow in India?

Ans:

No. The non-mandatory lists of accounting standards were recently withdrawn by ICAI or the Indian Chartered Accountants Institute. They are 

AS 30 – Measurement and Recognition of Financial Instruments;

AS 31- Presentation of Financial Instruments;

AS 32- Disclosures required for reporting of Financial Instruments.

Q: What are the two most popular accounting standards used in global accounting?

Ans:

Two popular accounting standards are used by a majority of countries globally. They are:

  • GAAP or Generally Accepted Accounting Procedures
  • IFRS or the International Financial Reporting Standards.

Q: Does the USA follow the IFRS accounting code?

Ans:

No.The USA follows the Generally Accepted Accounting Procedures (GAAP) when preparing its financial statements policies. However, globally the objectives and underlying accounting principles are the same.

Q: What accounting standards are followed in the European Union?

Ans:

The European countries follow the International Financial Reporting Standards (IFRS).

Q: How many standard lists are available in the Indian Accounting Standards?

Ans:

The Indian Accounting Standards has a long list of 32 accounting standards to follow when preparing, reporting or presenting financial statements.

Q: What accounting standards does India follow?

Ans:

In India, the combined government rules endorsed by the Institute of Chartered Accountants of India and the 2006 Rules for Accounting Standards of Companies are notified by the Government of India’s Ministry of Corporate Affairs, making these standards mandatory to follow. The accounting standards of India are adhered to by those who ready the financial statements like auditors, chartered accountants and preparers of taxes like Income Tax, GST etc.

Q: What are Kenya’s accounting standards?

Ans:

The financial statements in Kenya must mandatorily comply with the International Financial Reporting Standards (IFRS) and the Kenyan Institute of Certified Public Accountants Standard (ICPAK). It also mandates that all audits comply with the International Standards on Auditing (ISA).

Q: What are the accounting standards in Indonesia?

Ans:

The accounting standards conform to the best practices laid out by the Dewan Standar Akuntansi Keuangan aka DSAK. The Indonesian Board for Financial Accounting Standards falling under the Ikatan Akuntan Indonesia (IAI). Under the law, private and public companies must mandatorily follow the accounting standards notified by the DSAK IAI.

Q: What differences in accounting practices exist between IFRS and GAAP accounting standards?

Ans:

Here are the major differences between the Generally Accepted Accounting Procedures (GAAP) and the International Financial Reporting Standards (IFRS).

IFRS

GAAP

Acronym for International Financial Reporting Standard

Acronym for Generally Accepted Accounting Principles

Developed by the IASB or International Accounting Standard Board.

Developed by the FASB or Financial Accounting Standard Board.

Used by over 144 countries globally

Only the USA follows this standard.

Principles-based rules

Rules are practice-based.

Follows the First In First Out FIFO method for inventories.

Follows both FIFO and LIFO Last In First Out inventory valuation methods.

Permits inventory WDV or write down value reversal.

Does not permit WDV reversals.

Extraordinary items are included in the income statement

Extraordinary items are segregated and reported below net income in the financial statement.

Revaluation model used for fixed assets valuation.

Cost model used in fixed asset valuation.

Development costs may be conditionally capitalised.

Development costs are never capitalised and are treated as an expense.

Q: Why do we need accounting standards?

Ans:

Accounting standards are a must to follow reporting and measurement procedures in the capital markets. This is done by establishing a single set of accounting best practices and policies that are investor-oriented, homogenous and internationally recognised. 

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.