Accounting standards are rules and guidelines set up by governing bodies, like (FASB) Financial accounting standards board and (IASB) International Accounting Standards Board, to keep accounting practices consistent and understandable across all companies and industries.
Accounting standards improve the transparency of financial reporting in all countries.
LIST OF ACCOUNTING STANDARDS
The Accounting standards issued by the ICAI as well as Companies (Accounting Standards) Rules, 2006 notified by the Ministry of Corporate Affairs, Government of India are listed below :-
- Policies related to accounting disclosure (AS 1)
- Valuation of Inventories (AS 2)
- Cash Flow Statements (AS 3)
- Contingencies and Events Occurring After Balance Sheet Date (AS 4)
- Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies (AS 5)
- Construction Contracts (AS 7)
- Revenue Recognition (AS 9)
- Property, Plant and Equipment (AS 10)
- The Effects of Changes in Foreign Exchange Rates (AS 11)
- Government Grants (AS 12)
- Accounting for Investments (AS 13)
- Accounting for Amalgamations (AS 14)
- Employee Benefits (AS 15)
- Borrowing Costs (AS 16)
- Reporting on financial segments (AS 17)
- Disclosure of related party transactions (AS 18)
- Accounting policies and disclosure on Lease transactions (AS 19)
- Per Share Earnings or Earnings per share (AS 20)
- Preparation and Presentation of Consolidated Financial Statements (AS 21)
- Accounting for Taxes on Income (AS 22)
- Accounting for Investments in Associates (AS 23)
- Discontinuing Operations (AS 24)
- Interim Financial Reporting (AS 25)
- Intangible Assets (AS 26)
- Joint Ventures reporting of interest in Financial statements (AS 27)
- Impairment of Assets (AS 28)
- Contingent Liabilities and Contingent Assets and Provisions (AS 29)
ICAI has now withdrawn the following accounting standards:
- AS 30 – Financial Instruments Recognition and Measurement
- AS 31- Financial Instruments Presentation
- AS 32- Financial Instruments Disclosures
IMPORTANCE OF ACCOUNTING STANDARDS
Accounting Standards have a significant role to play in establishment of sound financial reporting system in the country.
Accounting standards specify when and how economic events are to be recognized, measured and displayed. Banks, investors, and regulatory agencies, rely on accounting standards to ensure information about a given entity is relevant and accurate.
Thus, in simple words Accounting Standards can be any form of statement which consists of rules and guidelines, issued by the accounting institutions, for the preparation of uniform and consistent financial statements.