PPT: Accounting Standards (3) | Advanced Accounting for CA Intermediate PDF Download

 Page 1


What Are Accounting Standards?
? Accounting standards are authoritative standards for 
financial reporting.
? The primary source of generally accepted accounting 
principles (GAAP).
? They specify how transactions and other events are to 
be recognized, measured, presented and disclosed in 
financial statements.
? The objective of such standards is to provide financial 
information to investors, lenders, creditors, contributors 
and others that is useful in making decisions about 
providing resources to the entity.
Page 2


What Are Accounting Standards?
? Accounting standards are authoritative standards for 
financial reporting.
? The primary source of generally accepted accounting 
principles (GAAP).
? They specify how transactions and other events are to 
be recognized, measured, presented and disclosed in 
financial statements.
? The objective of such standards is to provide financial 
information to investors, lenders, creditors, contributors 
and others that is useful in making decisions about 
providing resources to the entity.
Indian Accounting Standards (Ind-AS)
? the Accounting Standard adopted by companies in India 
? issued under the supervision of Accounting Standards Board (ASB).
? ASB - committee under ICAI (constituted in 1977) which consists of representatives 
from government department, academicians, other professional bodies.
? named and numbered in the same way as the International Financial Reporting 
Standards (IFRS).
? National Advisory Committee on Accounting Standards (NACAS) recommend these 
standards to the Ministry of Corporate Affairs (MCA).
? As on date MCA has notified 41 Ind-AS. 
? These shall be applied to the companies of financial year 2015-16 voluntarily, and 
from 2016-17 on a mandatory basis.
Page 3


What Are Accounting Standards?
? Accounting standards are authoritative standards for 
financial reporting.
? The primary source of generally accepted accounting 
principles (GAAP).
? They specify how transactions and other events are to 
be recognized, measured, presented and disclosed in 
financial statements.
? The objective of such standards is to provide financial 
information to investors, lenders, creditors, contributors 
and others that is useful in making decisions about 
providing resources to the entity.
Indian Accounting Standards (Ind-AS)
? the Accounting Standard adopted by companies in India 
? issued under the supervision of Accounting Standards Board (ASB).
? ASB - committee under ICAI (constituted in 1977) which consists of representatives 
from government department, academicians, other professional bodies.
? named and numbered in the same way as the International Financial Reporting 
Standards (IFRS).
? National Advisory Committee on Accounting Standards (NACAS) recommend these 
standards to the Ministry of Corporate Affairs (MCA).
? As on date MCA has notified 41 Ind-AS. 
? These shall be applied to the companies of financial year 2015-16 voluntarily, and 
from 2016-17 on a mandatory basis.
Indian Accounting Standard -3 
Statements of Cash Flow
Financial statements that show how 
changes in balance sheet account and 
income affect the cash and cash 
equivalents, and breaks down that 
analysis. 
Page 4


What Are Accounting Standards?
? Accounting standards are authoritative standards for 
financial reporting.
? The primary source of generally accepted accounting 
principles (GAAP).
? They specify how transactions and other events are to 
be recognized, measured, presented and disclosed in 
financial statements.
? The objective of such standards is to provide financial 
information to investors, lenders, creditors, contributors 
and others that is useful in making decisions about 
providing resources to the entity.
Indian Accounting Standards (Ind-AS)
? the Accounting Standard adopted by companies in India 
? issued under the supervision of Accounting Standards Board (ASB).
? ASB - committee under ICAI (constituted in 1977) which consists of representatives 
from government department, academicians, other professional bodies.
? named and numbered in the same way as the International Financial Reporting 
Standards (IFRS).
? National Advisory Committee on Accounting Standards (NACAS) recommend these 
standards to the Ministry of Corporate Affairs (MCA).
? As on date MCA has notified 41 Ind-AS. 
? These shall be applied to the companies of financial year 2015-16 voluntarily, and 
from 2016-17 on a mandatory basis.
Indian Accounting Standard -3 
Statements of Cash Flow
Financial statements that show how 
changes in balance sheet account and 
income affect the cash and cash 
equivalents, and breaks down that 
analysis. 
Definition
? Cash comprises cash on hand and demand deposits with banks.
? Cash equivalents are short term, highly liquid investments that are readily 
convertible into known amounts of cash and which are subject to an insignificant 
risk of changes in value.
? Cash flows - inflows and outflows of cash and cash equivalents.
? Operating activities are the principal revenue-producing activities of the 
enterprise and other activities that are not investing or financing activities.
? Investing activities are the acquisition and disposal of long-term assets and 
other investments not included in cash equivalents.
? Financing activities are activities that result in changes in the size and 
composition of the owners’ capital (including preference share capital in the 
case of a company) and borrowings of the enterprise.
Page 5


What Are Accounting Standards?
? Accounting standards are authoritative standards for 
financial reporting.
? The primary source of generally accepted accounting 
principles (GAAP).
? They specify how transactions and other events are to 
be recognized, measured, presented and disclosed in 
financial statements.
? The objective of such standards is to provide financial 
information to investors, lenders, creditors, contributors 
and others that is useful in making decisions about 
providing resources to the entity.
Indian Accounting Standards (Ind-AS)
? the Accounting Standard adopted by companies in India 
? issued under the supervision of Accounting Standards Board (ASB).
? ASB - committee under ICAI (constituted in 1977) which consists of representatives 
from government department, academicians, other professional bodies.
? named and numbered in the same way as the International Financial Reporting 
Standards (IFRS).
? National Advisory Committee on Accounting Standards (NACAS) recommend these 
standards to the Ministry of Corporate Affairs (MCA).
? As on date MCA has notified 41 Ind-AS. 
? These shall be applied to the companies of financial year 2015-16 voluntarily, and 
from 2016-17 on a mandatory basis.
Indian Accounting Standard -3 
Statements of Cash Flow
Financial statements that show how 
changes in balance sheet account and 
income affect the cash and cash 
equivalents, and breaks down that 
analysis. 
Definition
? Cash comprises cash on hand and demand deposits with banks.
? Cash equivalents are short term, highly liquid investments that are readily 
convertible into known amounts of cash and which are subject to an insignificant 
risk of changes in value.
? Cash flows - inflows and outflows of cash and cash equivalents.
? Operating activities are the principal revenue-producing activities of the 
enterprise and other activities that are not investing or financing activities.
? Investing activities are the acquisition and disposal of long-term assets and 
other investments not included in cash equivalents.
? Financing activities are activities that result in changes in the size and 
composition of the owners’ capital (including preference share capital in the 
case of a company) and borrowings of the enterprise.
Formats of Cash 
Flow Statement
Direct 
Method
Reports All Cash 
Receipts and Cash 
Payments from 
Operating Activities
Indirect 
Method
Reconciles from Net 
Income to Cash 
provided by Operating 
Activities