Accounting For Manager AS-1 : Discloser of Accounting

S.R.Luthra institute of management Assignment- 2015

MBA Sem 1

Sr No Roll number Name

1 69 CHAUHAN KHUSHBU

2 76 PAMBHAR BHARGAV

3 78 PATEL NACHIKET

4 85 MADHVANI JAYSHREE

5 94 DESAI YASH

6 103 PARMAR VISHWA

Table of content AS-1 : Discloser of Accounting Meaning and Significance of Accounting Policies Scope and coverage Principal and norms of Standard Accounting Treatment: Fundamental accounting assumptions Areas of differing accounting policies Selection of accounting policies Disclosure of Requirements

AS-1 : Discloser of Accounting

Meaning and Significance of Accounting Policies

Meaning & significance of accounting policy:          The accounting policy refers to specific accounting principles and the methods of applying those principles adopted by an Enterprise in the preparation and presentation of financial statement .Significance of accounting policy in the measurement and presentation of performance and financial positions extracts from the following factors :1. Accounting policy very from Enterprise to Enterprise.- financial statements that are financial position and profitability are also affected by it.- disclosure plays an important role in this if it is presented properly .2. There is no single accounting policy that are applicable to all circumstances.- the choice of appropriate accounting policy in specific circumstances of each Enterprise is called " considered judgement " by management.

Scope and coverage

The standard deals with the disclosure of significant accounting policy followed in preparing and presenting financial statements. The purpose is to promote better understanding of a financial statements by establishing the disclosure of significance accounting policy and the manner in which accounting policy are disclosed. Such disclosure also facilitate a more meaningful comparison between financial statement of different enterprises.

Principal and norms of Standard Accounting Treatment:

Fundamental accounting assumptions

The following are Fundamental accounting assumptions:

Going concern:

Going concern is a basic underlying assumption in accounting. The assumption is that a

company or other entity will be able to continue operating for a period of time that is

sufficient to carry out its commitments, obligations, objectives, and so on. In other

words, the company will not have to liquidate or be forced out of business in the

foreseeable future

Principal and norms of Standard Accounting Treatment:

Consistency:

The consistency principle requires accountants to be consistent from one accounting period to another in applying accounting principles, methods, practices, and procedures. In other words, the readers of a company's financial statements can presume that the same rules and measurements were followed in all of the years being reported. If a change is made to a more preferred accounting method, the effects of the change must be clearly disclosed.

The Financial Accounting Standards Board refers to consistency as one of the characteristics or qualities that makes accounting information useful

Principal and norms of Standard Accounting Treatment:

Accrual :

Under the accrual basis of accounting, revenues are reported on the income statement when they are earned. Under the accrual basis of accounting, expenses are matched with the related revenues and/or are reported when the expense occurs, not when the cash is paid. The result of accrual accounting is an income statement that better measures the profitability of a company during a specific time period.

If a these Fundamental accounting assumptions are not followed, the fact should be disclosed.

Principal and norms of Standard Accounting Treatment:

Areas of differing accounting policies:

Principal and norms of Standard Accounting Treatment:

Selection of accounting policies: The major consideration governing the selection and

application of accounting policies are:I. Prudence: profits are not anticipated but recognized

only when realized.II. Substance over form: E.g. Hire purchase transactionIII. Materiality: Financial statement should disclose all

“material items, that is items the knowledge of which might influence the decision of the user

Disclosure of Requirements

Thank You