What is Accounting Standard?
The Institute of Chartered Accountants of India (ICAI) issues a set of guidelines known as Accounting Standards (AS) to establish uniformity and consistency in the preparation and presentation of financial statements by companies in India.
These standards provide a framework for accounting policies, measurement, presentation, and disclosure of various financial transactions and events.
They ensure that financial statements are reliable, comparable, and understandable for various stakeholders, such as investors, creditors, regulators, and the public.
Objectives of Accounting Standards
Accounting Standards issued by ICAI help in achieving the following objectives:
- Consistency: AS ensures consistency in the treatment of accounting transactions and events across different entities. This consistency is important for meaningful comparison and analysis of financial statements.
- Transparency: The standards require entities to disclose relevant information, ensuring transparency in financial reporting. This helps stakeholders make informed decisions.
- Reliability: AS provides guidelines for accurate and reliable measurement and presentation of financial information, enhancing the credibility of financial statements.
- Comparability: With standardized accounting policies and practices, financial statements of different companies become comparable, facilitating better analysis and benchmarking.
- Accountability: AS enhances the accountability of management and auditors by providing a clear framework for financial reporting. It also helps auditors in assessing the fairness of financial statements.
- Investor Confidence: Consistent and transparent financial reporting promotes investor confidence and attracts investment.
- Regulatory Compliance: Many regulatory bodies and authorities require companies to follow prescribed accounting standards for reporting purposes.
List of Accounting Standards as of 1st Feb 2022
ICAI has issued several Accounting Standards covering various aspects of financial reporting, such as revenue recognition, inventory valuation, depreciation, financial instruments, leases, consolidation, employee benefits, and more.
Here is a list of some of the prominent Accounting Standards (AS) issued by ICAI:
- AS 1 – Disclosure of Accounting Policies
- AS 2 – Valuation of Inventories
- AS 3 – Cash Flow Statements
- AS 4 – Contingencies and Events Occurring after the Balance Sheet Date
- AS 5 – Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies
- AS 6 – Depreciation Accounting
- AS 7 – Construction Contracts
- AS 9 – Revenue Recognition
- AS 10 – Property, Plant and Equipment
- AS 11 – The Effects of Changes in Foreign Exchange Rates
- AS 12 – Accounting for Government Grants
- AS 13 – Accounting for Investments
- AS 14 – Accounting for Amalgamations
- AS 15 – Employee Benefits
- AS 16 – Borrowing Costs
- AS 17 – Segment Reporting
- AS 18 – Related Party Disclosures
- AS 19 – Leases
- AS 20 – Earnings Per Share
- AS 21 – Consolidated Financial Statements
- AS 22 – Accounting for Taxes on Income
- AS 23 – Accounting for Investments in Associates in Consolidated Financial Statements
- AS 24 – Discontinuing Operations (Withdrawn)
- AS 25 – Interim Financial Reporting
- AS 26 – Intangible Assets
- AS 27 – Financial Reporting of Interests in Joint Ventures
- AS 28 – Impairment of Assets
- AS 29 – Provisions, Contingent Liabilities and Contingent Assets