1.Define Accounting Standards?

An accounting standard is a document issued by a rule-setting body, stating the manner in

which accounting transactions are to be recorded and reported. Accounting standards
cover a broad range of topics, including general principles, presentation, assets, liabilities,
equity, revenue, expenses, broad transactions, and industry-specific. The range of topics
covered is constantly expanding, as new business practices and industries create new
scenarios for which rules must be developed. When an organization follows accounting
standards, its financial statements can then be audited by an outside auditor, which is a
standard requirement by lenders, creditors, and investors.

2.List out the role of accounting Standards ?

Accounting standards ensure the financial statements from multiple companies are
comparable. Because all entities follow the same rules, accounting standards make the
financial statements credible and allow for more economic decisions based on accurate
and consistent information.

3.Objectives of Accounting Standards?

In earlier days, accounting was just used for recording business transactions of financial
nature. Its main emphasis now lies on providing accounting information in the process
of decision making.

4,Financial Statement for users?

The balance sheet, income statement, and cash flow statement are three types of financial
statements businesses use to manage their operations and provide transparency to their
stakeholders. All three statements are correlated and produce diverse aspects of a company’s
operations and success.

Balance Sheet

A balance sheet is a statement that shows the financial worth regarding book value. The assets,
liabilities, and shareholders’ investments of a firm are divided into three sections:

1. Assets, such as cash and accounts receivable,

reveal a lot about a company’s operational
efficiency.
2. Liabilities disclose the company’s expenditures and
the debt capital that the company is repaying.
3. Shareholder’s equity reflects information on equity
investments and retained earnings from periodic
net income.
Income Statement

The income statement compares a company’s revenue to its operating expenses to arrive at a
bottom line or net profit or loss. At three different points, the report aids in analysing corporate
efficiency.

• Evaluating gross profit starts with revenues and the

direct costs linked with it.
• After that, it continues to operate profitably.
• The net income is calculated after deducting
interest and taxes.
Cash Flow Statement

The cash flow statement shows how the company’s cash flows from operating, investment, and
financing activities.
Objectives of Financial Statements
To provide information about economic resources and
obligations of a business

• Financial statements have many objectives. These

include offering information on the business’s
resources, such as production capability, labour
hours, liquid assets, stock, delivery method, and so
on. It also delivers data on resource differences
between two periods.
• This information helps better understand the
business by allowing stakeholders to make
financial decisions based on changes in acquiring
resources and their utilisation.
To provide information about the earning capacity of the
business

• The financial statements’ objective is to provide

insight into the company’s earning power. This
data is intended for the organisation’s highest
executives.
• Management can decide on expansion levels
based on economic assets and liabilities.
• Together, the three components of financial
statements should convey information about the
entity’s earning capacity.
• The use of available resources also has an impact
on its earning potential.
To provide information about cash flows

• The cash flows of the company are also included in

the financial statements.
• Creditors and investors can use this information to
forecast the company’s liquidity and financial
requirements.
Other objectives
• Communicating quantitative and objective
information to their interested users helps make
economic decisions.
• To cater to the unique requirements of
conscientious creditors and investors.
• To serve as a financial foundation for tax
assessments.
• To provide valuable data for foreseeing the
company’s future earning capacity.
• To provide accurate information on the fluctuation
of economic resources.
• To offer information on the organisation’s net
resource changes.
• To offer accurate information on net economic
resource changes.
• To offer information on the changes in the
organisation’s net resources due to profit-oriented
activities.
• Their objective is to make it easier to judge
replacing fixed assets and expanding the business.
• They give the government the information it needs
to make informed decisions about duties, taxes,
and price control, among other things, as well as
for legal and governance purposes.
• They devise corrective strategies to address
discrepancies between actual and budgeted
performance.
• They also give managers the required data and
information for internal reporting and policymaking.
• They also serve to protect the interests of
shareholders who are not permitted to participate
in the company’s day-to-day operations.
 • They assist credit rating agencies in determining
the Company’s rating.

5.Illustrate the Development of Accounting Standard in India/

The ICAI recognizes the need for a global standard in these

global times. Thus, the Government of India along with ICAI
decided not to adopt the IFRS the way they are. Instead, it
introduced the Indian AS, popularly known as Ind AS. Let us
take a look closure look at Indian AS; its history and a few of its
main concepts.

7.What is meant by Indian AS?

Indian AS

The Institute of the Chartered Accountants of India (ICAI) is the

body that sets up the Accounting Standards in India. In 2006,
ICAI initiated the process of shifting towards the International
Financial Reporting Standards (IFRS). International Accounting
Standards Board (IASB) issues the IFRS. The purpose of the
ICAI to shift towards the IFRS is to increase the acceptability
and transparency of the financial statements of the Indian
corporates on the global platform.

The government and ICAI first analysed the requirements of

IFRS in detail. They then decided to converge it. Accounting
Standards Board (ASB) has formulated the Ind AS. It has tried
it’s best to keep them in line with the IFRS. Only absolutely
essential changes were made.

The Central Government of India issued Indian Accounting

Standards in consultation with the National Advisory Committee
on Accounting Standards (NACAS). It did this under the
supervision and control of the Accounting Standards Board
(ASB) of ICAI.

Indian AS (Ind AS) are IFRS converged standards. They are

named and numbered in the same way as their corresponding
IFRS. National Advisory Committee on Accounting Standards
(NACAS) recommended these standards to the Ministry of
Corporate Affairs. Ministry of Corporate Affairs (MCA) makes
Ind AS applicable on the companies in India. So far 40 Indian
AS have been issued.

6.List out the requirements of International Accounting

Standard?

• a statement of financial position (balance sheet)

• a statement of comprehensive income. ...
• a statement of changes in equity.
• a statement of cash flows.
• notes, including a summary of the significant accounting