Indian Accounting Standards

INTRODUCTION

INDIAN ACCOUNTING STANDARDS

Accounting Standards are written documents, policy documents issued by expert accounting body or by government or other regulatories body covering the aspects of recognition, measurement, treatment, presentation and disclosure of accounting transaction in the financial statement. Accounting Standards in India are issued by the Institute of Chartered Accountants (ICAI).

Objective of Accounting Standards

Objective of Accounting Standards is to standardize the diverse accounting policies and practices with a view to eliminate to the extent possible the non- comparability of Financial Statements and add the reliability of the financial statements.

The Institute of Chartered Accountants of India recognizing the need to harmonize the diverse accounting policies and practices, constituted an Accounting Standard Board (ASB) on 21st April, 1977.

Procedure for Issuing Accounting Standards

1. Accounting Standard Board (ASB) determines the broad areas in which Accounting Standards need to be formulated.

2. In the preparation of AS, ASB is assisted by Study Groups.

3. ASB also holds discussions with representative of Government, Public Sector Undertakings, Industry and other organizations (ICSI/ICWAI) for ascertaining their views.

4. An exposure draft of the proposed standard is prepared and issued for comments by members of ICAI and the public at large.

5. After taking into consideration the comments received, the draft of the proposed standard will be finalized by ASB and submitted to the council of the Institute.

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

International Accounting Standard Board has so far issued 41 accounting standards, large numbers of standards have been revised and 12 IAS have been superseded and deleted.IAS has been given to a new number series as IFRS. The total number of IFRS issued till date are 8.

The term International Financial Reporting Standards (IFRSs) has both a narrow and a broad meaning. Narrowly, IFRSs refers to the new numbered series of pronouncements that the IASB is issuing, as distinct from the International Accounting Standards (IASs) series issued by its predecessor. More broadly, IFRSs refers to the entire body of IASB pronouncements, including standards and interpretations approved by the IASB and IASs and SIC interpretations approved by the predecessor International Accounting Standards Committee. Currently, there are 29 IAS and 8 IFRS which are in force.

In addition, there is The International Financial Reporting Interpretations Committee which develops interpretations to interpret the application of International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) and provide timely guidance on financial reporting issues not specifically addressed in IASs and IFRSs. Interpretations are developed by IFRIC, exposed for public comment, approved by IFRIC, and then sent to the IASB Board for review and approval. Prior to the formation of the IFRIC, there was the SIC or the Standing Interpretations Committee which was super ceded by the IFRIC in 2002. As on date, there are 11 SICs and 13 IFRICs to provide guidance.

IAS or the International Accounting Standards were first issued by IASC or the International Accounting Standards Committee. IASC was set up in 1973 and was in operation till 2000. In 2001 a structural change was made whereby IASC was restructured into the IASB - International Accounting Standards Board. The IASB operates under the control of the International Accounting Standards Committee Foundation. This Foundation was set up in 2001.

RESEARCH DESIGN

Statement of the problem

Indian Accounting Standards have already made an impact on the companies in India relating to the accounting aspects and what needs to be disclosed to the general public and what should not be and also forms a basis as to what should be disclosed in the form on material and non-material aspects.

With the adoption of IFRS in India from April 2011, India would be governed by the International Accounting policies.

This study aims to get a overview about Indian Accounting Standards and International Reporting Standards and study the major differences between the existing Indian Accounting Standards and International Reporting Standards.

Objective of the study

1. To study about the Indian Accounting Standards.

2. To study about the International Financial Reporting Standards.

3. To discuss the major differences between Indian Accounting Standards and International Financial Reporting Standards

4. To offer suggestions and recommendations for further study

Scope of the study

The study aims to bring an understanding of the Indian Accounting Standards and the International Financial Reporting Standards and it also aims at differentiating between them. This study helps to get an overview about what was prevailing and what will prevail and helps to analyse the effects.

Tools for Data Collection

The data collected is completely secondary data where data relating to Indian Accounting Standards was collected from the book 'Accounting Standards' by D.S.Rawat and 'Financial Reporting' from the ICAI and the data relating to International Financial Reporting Standards was collected from 'International Financial Reporting Standards' by M.P.Vijay Kumar and 'Accounting Standards' by D.S.Rawat.

The Differences between Indian Accounting Standards and the International Financial Reporting Standards was also obtained from secondary sources which included publications by Price water Coopers, Deloitte and KPMG.

* The IFRS Manual of Accounting authored by the UK Accounting

Consulting Services team of PricewaterhouseCoopers