PPT: Accounting Standards (1) | Advanced Accounting for CA Intermediate PDF Download

 Page 1


ACCOUNTING STANDARD - 1
Disclosure Of Accounting Policies
                                                       
   
Page 2


ACCOUNTING STANDARD - 1
Disclosure Of Accounting Policies
                                                       
   
What are Accounting Policies ?
?
It refers to specific accounting principles and the method 
of applying those principles in preparation of financial 
statements.
Areas where more than one method of 
accounting treatments :-
?
Method of depreciation :
• Straight line method.
• WDV method.
Page 3


ACCOUNTING STANDARD - 1
Disclosure Of Accounting Policies
                                                       
   
What are Accounting Policies ?
?
It refers to specific accounting principles and the method 
of applying those principles in preparation of financial 
statements.
Areas where more than one method of 
accounting treatments :-
?
Method of depreciation :
• Straight line method.
• WDV method.
?
Treatment of expenditure during construction :
•
Written off .
•
Capitalization .
?
Conversion or translation of foreign currency item :
•
Average rate .
•
TT buying rate .
?
Valuation of inventories :
•
FIFO .
•
Weighted average.
?
Valuation of fixed assets :
Page 4


ACCOUNTING STANDARD - 1
Disclosure Of Accounting Policies
                                                       
   
What are Accounting Policies ?
?
It refers to specific accounting principles and the method 
of applying those principles in preparation of financial 
statements.
Areas where more than one method of 
accounting treatments :-
?
Method of depreciation :
• Straight line method.
• WDV method.
?
Treatment of expenditure during construction :
•
Written off .
•
Capitalization .
?
Conversion or translation of foreign currency item :
•
Average rate .
•
TT buying rate .
?
Valuation of inventories :
•
FIFO .
•
Weighted average.
?
Valuation of fixed assets :
Needs for disclosure of Accounting Policies.
?
To ensure proper understanding of financial statements.
?
Comparing financial statements of different enterprises.
?
All significant accounting policies disclosed at one place 
would be helpful to the reader of financial statements.
Page 5


ACCOUNTING STANDARD - 1
Disclosure Of Accounting Policies
                                                       
   
What are Accounting Policies ?
?
It refers to specific accounting principles and the method 
of applying those principles in preparation of financial 
statements.
Areas where more than one method of 
accounting treatments :-
?
Method of depreciation :
• Straight line method.
• WDV method.
?
Treatment of expenditure during construction :
•
Written off .
•
Capitalization .
?
Conversion or translation of foreign currency item :
•
Average rate .
•
TT buying rate .
?
Valuation of inventories :
•
FIFO .
•
Weighted average.
?
Valuation of fixed assets :
Needs for disclosure of Accounting Policies.
?
To ensure proper understanding of financial statements.
?
Comparing financial statements of different enterprises.
?
All significant accounting policies disclosed at one place 
would be helpful to the reader of financial statements.
Fundamental Accounting Assumptions
?
Going concern:   
    Enterprise intention for continuing the operation in foreseeable 
future.
?
Consistency:      
    Same Accounting policies are followed by one period to another. 
?
Accrual:     
    Revenues and costs should be recorded in financial statements on 
    accrued basis.