ACCOUNTING STANDARDS VS INDIAN ACCOUNTING STANDARDS
Accouting standard have been develop in India over time . It is also called IND AS .Such standards need to be adopted by various corporate firms and NBFCs in India under the supervision of the Accounting Standard Board (ASB). The Accounting Standard Board was established in 1977 as a regulatory body. ASB is a professional and autonomous body managed by the Institute of Chartered Accountants of India. Apart from this there are other bodies such as CII,FICCI, and ASSOCHAM which regulate ASB . The Indian Government Body that recommends this Standard to the Department of Corporate Affairs is the National Advisory Committee on Accounting Standards.
Indian Accounting Standard (IND AS)are a set of Accounting Standards notified by the Ministry of Corporate Affairs which are conversed with International Financial Reporting Standards (IFRS).Now, India will have two sets of Accounting Standards. Existing Accounting Standards under companies (AS) rules 2006 and IFRS conversed IND AS.
Accounting Standards (AS) are generally rule based and are less flexible for example as per AS-21 consolidation is required if a company holds 50% of the voting rights or control the board of directors. But in comparision, IND AS are generally substance based for example consolidation is required under IND AS- 110 if the holding company has control over its subsidiary.
AS applicable to not only the companies but to other entities. To the companies, notified standards under company rule are applicable And for other entities AS published by ICAI are applicable. But in comparison IND AS will be applicable in phases to mainly large companies . IND AS applicability from Financial Year 2015-16 is Voluntarily.
Phase 1 (Financial Year 2016-17) : All companies whose net worth is more than Rs 500 Crore. Holding, Subsidiary ,Joint Venture or Associate Companies of above.
Phase 2 (Financial Year 2017-18) : All companies whose net worth is more than Rs 250 Crore. Holding, Subsidiary, Joint Venture or Associate Companies of above.
AS generally use the word “SHOULD” which is more advisory in nature. IND AS generally use the word “SHALL” in its guidance which makes it more strict. New Standards or guidance were not existing in AS. IND AS provides guidance on various transactions like agriculture, business combinations, etc. Interpretations or various guidance notes and other publications are available along with AS in existing scenario. IND AS has incorporated various interpretations which are part of IFRS.
AS contains subjectively at quite or few places. But IND AS there is specific guidance on various matters like depreciation or revenue recognition.
THE LIST OF IND AS AND AS:
In IND AS -1 presentation of financial statements. But in AS -1 disclosures of accounting principles and policies are applicable.
In IND AS-2 Inventories. But in AS-2 Valuation of Inventories are applicable.
In IND AS-7 Statement of Cash Flows. But in AS Cash Flow Statement is in AS-3 are applicable.
In IND AS-8 Accounting Policies changes in Accounting Estimate and Errors. But in
AS-8 Withdrawn and included in AS-26 are applicable.
In IND AS -12 Income Taxes. But in AS Accounting for Taxes on Income is in AS -22 are applicable.
In IND AS -33 Earnings Per Share. But in AS -20 Earnings Per Share are applicable.
In IND AS-10 Events occur after the reporting period. But in As -10 Accounting for Fixed Assets are applicable.
In IND AS -21 The Effect of Changes in Foreign Exchange Rates. But in AS -21 Consolidated Financial Statements are applicable.
In IND AS -18 Revenue. But in AS -9 Revenue Recognition is applicable.
In IND AS -23 Borrowing Costs. But in AS-16 Borrowing costs are applicable
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