What is accounting standard ?

Accounting Standards (AS) as per the Institute of Chartered Accountants of India (ICAI) are a set of guidelines and rules that govern the recognition, measurement, presentation, and disclosure of accounting transactions in financial statements. These standards are issued by the Accounting Standards Board (ASB) of ICAI to ensure consistency, transparency, and comparability in financial reporting.

Key Features of Accounting Standards by ICAI:

1. Uniformity: They provide a standardized approach to accounting across industries.
2. Comparability: Financial statements prepared using AS can be easily compared across businesses.
3. Transparency: Ensures proper disclosure of financial transactions.
4. Compliance with Laws: Helps in adherence to the Companies Act, Income Tax Act, and other regulatory requirements.

Classification of Accounting Standards in India

1. Indian Accounting Standards (Ind AS) – These are based on International Financial Reporting Standards (IFRS) and are applicable to companies as per the roadmap issued by the Ministry of Corporate Affairs (MCA).
2. Accounting Standards (AS) – These apply to entities that are not required to follow Ind AS, such as small and medium enterprises (SMEs) and non-corporate entities.

List of Some Important Accounting Standards Issued by ICAI:

1. AS 1 – Disclosure of Accounting Policies
2. AS 2 – Valuation of Inventories
3. AS 3 – Cash Flow Statements
4. AS 10 – Property, Plant, and Equipment
5. AS 15 – Employee Benefits
6. AS 22 – Accounting for Taxes on Income