Accounting Standards

Meaning:

Accounting standards are written policy documents covering the aspects of recognition, measurement, treatment, presentation and disclosure of accounting transactions in financial statements.

An accounting standard is an authoritative statement issued by ICAI (Institute of Chartered account of India), a professional body of accounting in our country.

Objectives:

1. To bring uniformity in different accounting policies to eliminate non-comparability of financial statements for enhancing the reliability of financial statements.

2. To provide a set of standard accounting policies, valuation norms and disclosure requirements.

3. To improve the credibility of accounting data.

4. To enhance comparability of financial statements of both intra and inter enterprises for assessment of firms’ performance by the users of accounting.

Benefits of Accounting Standards

1. Accounting standard helps to eliminate variations in accounting treatment to prepare financial statements.

2. Accounting standards may call for disclosures of certain information which may not be required by law, but such information might be useful for the general public, investors and creditors.

3. Accounting standards facilitate comparability between financial statements of inter and intra companies.

Limitations of Accounting Standards

1. Accounting standard chooses between different alternate accounting treatments difficult to apply.

2. It is rigidly followed and fails to extend flexibility in applying accounting standards.

3. Accounting standards cannot override the statute. The standards are required to be farmed within the ambit of prevailing status.

Applicability of Accounting Standards

Except for the purely charitable organisation which does not have any commercial, industrial and business activity, accounting standard applies to:

1. Sole proprietorship unit

2. Partnership firm

3. Societies

4. Trusts

5. Hindu undivided family

6. Association of persons

7. Cooperative societies

8. Companies

9. International Financial Reporting System

The list of Ind AS and existing standards for comparative analysis is given below:

Comments

poem by student Pallavi kumar

ನನ್ನ ದೇಶ ನನ್ನದೆನ್ನುವ ಅಭಿಮಾನವು ನಿಮ್ಮದು ಆ.. ಶೃಂಗ-ಶಿಖರಗಳಾ ಅಂತರಂಗವೆಲ್ಲ ನಿಮ್ಮದು ಸತ್ಯ ತ್ಯಾಗ ನಿಸ್ವಾರ್ಥದ ಸೇವೆ ದೇಶಕೆಂದುನಿಮ್ಮದು ದೇಶಕಾಗಿ ಪ್ರಾಣ ತೆತ್ತ ಅಮರರಾದವೀರರೇ ವಂದೇ ಮಾತರಂ ವಂದೇ ಮಾತರಂ ಆ.. ಹಾ.. ಪ್ರತಿ ಕ್ಷಣದ ಎಚ್ಚರದೊಳು ಯೋಧರೆದೆಯ ಕೆಚ್ಚಿನಲಿ ನನ್ನ ದೇಶ ನನ್ನವರಿಗಾಗಿ ಕಾಯ್ವೆನೆಂಬ ಎಚ್ಚರದಲಿ ವೈರಿಗಳೆದೆ ನಡುಗಿಸಿದ ಬೆಂಕಿ ಜ್ವಾಲೆಯೇ ದೇಶಕ್ಕೆಂದು ಬಲಿದಾನ ಕೊಡಲು ಸಿದ್ಧ ಎನ್ನುವ ವೀರರೇ //ವಂದೇ ಮಾತರಂ// ಮೈ ಕೊರೆವ ಚಳಿಯಲ್ಲಿ ದಿಗಿಲಾಗಿಸುವ ಇರುಳಲ್ಲಿ ನೆತ್ತರದ ಒಕೂಳಿಯ ಮಧ್ಯೆಮಾತೆಯ ನೆನೆಯುತಲಿ ದೇಶಕೆಂದೇ ಸಂಜೀವಿನಿಯಾದ ಯೋಧರೆ ಕಡುಕತ್ತಲಲಿ ದೇಶಕ್ಕೆ ಬೆಳಕಾದ ಸೂರ್ಯರೇ //ವಂದೇ ಮಾತರಂ// ಸಕಲ ಸುಖ-ಸಂತೋಷವ ತೊರೆದು ಸಜ್ಜಾದ ಕಲ್ಕಿಗಳೇ ಮನೆ ಮಡದಿ ಮಕ್ಕಳಿಂದ ದೂರವಿದ್ದು ದೇಶವ ಜಪಿಸಿದ ಯೋಗಿಗಳೇ ಜೀವವ ಲೆಕ್ಕಿಸದೆ ಸಜ್ಜಾಗಿ ಎದೆಯೊಡ್ಡಿ ನಿಂತ ವೀರರೇ ದೇಶಕೆಂದೇ ಸದಾ ಸಿದ್ಧ ಕೊರಳು ಎಂದು ನಿಂತ ಛಲಗಾರರೇ ಇಗೊ ನಿಮಗೆ ನಮ್ಮ ಸಾವಿರ ವಂದನೆ //ವಂದೇ ಮಾತರಂ// ಯುವ ಕವಯಿತ್ರಿ: ಪಲ್ಲವಿ ,ಕುಮಾರ,ಕಾಂಬಳೆ BBA student GFGC collage raibag ತಾ. ರಾಯಬಾಗ ಜಿಲ್ಲಾ: ಬೆಳಗಾವಿ ಸಾಕಿನ್: ಜಲಾಲಪೂರ ಫೋನ್ :೯೩೮೦೬೧೦೩೫೫ ಧನ್ಯವಾದಗಳು. .......

Fun week celebration

Cost of capital:meaning and significance

Cost of capital Meaning of Cost of Capital : An investor provides long-term funds (i.e., Equity shares, Preference Shares, Retained earnings, Debentures etc.) to a company and quite naturally he expects a good return on his investment. In order to satisfy the investor’s expectations the company should be able to earn enough revenue. Thus, to the company, the cost of capital is the minimum rate of return that the company must earn on its investments to fulfill the expectations of the investors. If a company can raise long-term funds from the market at 10%, then 10% can be used as cut-off rate as the management gains only when the project gives return higher than 10%. Hence 10% is the discount rate or cut-off rate. In other words, it is the minimum rate of return required on the investment project to keep the market value per share unchanged. In order to maximise the shareholders’ wealth through increased price of shares, a company has to earn more than the cost of capital. The firm’s co...

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