Category Archives: ACCOUNTING STANDARS

IPCC Group II – Accounting Standards and their disclosures


IPCC Group II – Accounting Standards and their disclosures

IPCC Group II focus on Accounting Standards and their disclosures..AS-4 contigencies & events occurring after balance sheet. This is very important part to remember for every student.
ACCOUNTING STANDARS AND THEIR DISCLOSURES (IPCC GROUP -II )
AS-4 contigencies & events occurring after 1. Nature of contingency and events.
balance sheet date 2. Affect of uncertainty in the sense of future outcome.
3. Estimate of financial effect or the fact that estimate can’t be made.
AS-5 net profit or loss for the period, prior 1. narture and amount and their impact on
period items and changes in accounting policies current profit or loss can be clearly perceived
2. material impact in later periods
AS-11 Effect of changes in foreign exchange 1. exchange rate.
rates 2. Nature and reason for change.
3. Profit or loss in process of exchange.
AS-12 governament grants 1.method of presentation
2.nature ans extent of government grants (mandatary and non mandatary assets given at concessional rate or free of cost)
AS-16 borrowing costs 1.policy adopted for borrowing cost
2.amount of borowing cost capitalised during the year
AS-19 lease accounting Finance lease:
lessee:
1.lease assets must disclose separately
2.details of lease period
3..if any contingent rent it should recognized as expense in P&L a/c
lessor:
1.contingentrent recognized as income in P&L a/c
operating lease
lessee:
1.Lease payments recognized in P&L Account for the period separately
lessor:
1.contingent rent recognized as income and P&L Account
AS-20 earning per share 1.The amount used as numerators and a reconciliation of that amount to the net profit/loss for the period.
2.The number used as denominators and a reconciliation of those to each other.
3.The nominal value along with EPS figures.
4.If a component of net profit is used which is not reported as a line item in the P&L Account, a reconciliation should be provided.
AS-26 Intangible Assets 1.amortisation rate and method using
2.gross qualifyingamount,impirement losses accumulated amortisation
additions,disposals,losses.,etc during period
3.if amortised over a period of 10 years then reasons
4.what assets pledged for liabilities as security
5.commiment amount
6.R&D recognised as expense during period
AS-29 provisions,contingent liabilities provision:
and assets 1.carrying amount
2.additions made during period
3.used and unused amounts during perios and amount of resevre
4.nature of obligation in brief
5.any reimbursement
liabilities:
1.nature
2.financial effet
3.uncertainity ragarding outflow
4.any reimbursement
5.required info and state of fact

HOW TO REMEMBER ACCOUNTING STANDARDS


Here is a way to easily remember AS
 
 
I guess this will be useful to beginners, for me this helps a lot even now, bcoz i get stuck in simple things now and then

1 Disclosure of Accounting Policies
2 Valuation of Inventories
1 and 2 will be easily remembered as they are first two
  
3 Cash Flow Statements
has three words 1)CASH 2)FLOW 3)STATEMNTS

4 Contingencies and Events Occuring after the Balance Sheet Date
relates to transactions which fall outside the four walls of a room

5 Net Profit or Loss for the period, Prior Period Items and Changes in Accounting Policies 
 thats my lucky number so have your own strategy

7 Construction Contracts
we give weekly(7 days) wages for labour of construction activity

8 Accounting for Research and Development
in R of Reaserch..have a small u below R it becomes 8 R+u=8
 
9 Revenue Recognition
this 9 is the highest number...after this zero will be added and the series continuos, many business people prefer combination of number 9 wherever they have to choose as they believe it earns highest revenue

10 Accounting for Fixed Assets
there are 10 assets for which COA and COI is taken as nill as per sec55 of IT Act
  
11 The Effects of Changes in Foreign Exchange Rates
the first thing flashes in our mind when we read forex is $ dollar, in the symbol S is crossed by 2 lines, i.e.,11
  
12 Accounting for Government Grants
Govt many times say that you invest 1rupee we will provide 2rupees as subsidy 1+2=12
  
13 Accounting for Investments  
14 Accounting for Amalgamations
we are quite familiar with 13 and 14 in our accounts 
for 14- 4 companies A,B,C,D were amalgamated and 1 company is formed 1 formed by 4, 1 by 4=14
  
15 Employee Benefits  
thats my birthday, for you people sec15 of IT act is charging section for Income from salaries(paid to employee)

16 Borrowing Costs
3 sources are Equity Preference Debt as per COC of FM, when you borrow funds firms always try earn income atleast by double, 3X2=6
 
20 Earnings Per Share
Shareholder expects to double his property when he invests in shares, usually shares are for 10/- each
 
 
21 Consolidated Financial Statements
consolidation of 2 companies FS in 1 company=21
  
22 Accounting for Taxes on Income
In PCC tax is 2nd paper in 2nd group