AS-5“NET PROFIT OR LOSS FOR THE

PERIOD, PRIOR PERIOD ITEMS ANDCHANGES IN ACCOUNTING POLICIES”

PRESENTED BY- RAM JANGIR

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GOOD MORNING…

2ACCOUNTING STANDARDS

“ Accounting Standards (ASs) are written policy documents issued by expert accounting body ,by government or other regulatory body covering the aspects of recognition, measurement,presentation and disclosure of accounting transactions in the financial statements. ”

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FINANCIAL STATEMENTS

PROFIT & LOSS

BALANCE SHEET

CASH FLOW

STATEMENT

SCHEDULES & NOTES

SCHEDULE IIIPart-II STATEMENT OF PROFIT & LOSS

Particulars Fig. as the end of current reporting period

Fig. as the end of previousreportingperiod

Note No. I. Revenue from operations II. Other incomesIII.Total revenues (I+II)IV.Expenses :V. Profit before prior period items (III-IV)VI.(-/+)Prior period items VII.Profit before exceptional & extraordinary items VIII.(-/+) exceptional & extraordinary items IX.Profit of continuing operations before taxX. Profit/ (loss) from discontinuing operations before taxXI.Total profits / loss (IX+X) XII.Taxes XIII.Profit for the period (XI-XII)

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5AS-5OBJECTIVES :

.To prescribe the classification & disclosure of certain items in the statement of P&L , to maintain uniformity.It is mandatory & applies to all enterprises.It puts items in various categories.

AS-5 DEALS WITH:

Ordinary items

Extraordinary items

Prior period items

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ORDINARY ITEMS 7

Ordinary items are those items, related to any activities which are undertaken by an enterprise as part of its business and such related activities in which the enterprise engages in furtherance of, incidental to, or arising from, these activities.

Ordinary but exceptional 8

WHERE INCOME OR EXPENSES ARISE OUT OF ORDINARY ACTIVITIES BUT ARE OF EXCEPTIONAL SIZE, NATURE OR INCIDENCE, THEY SHOULD BE DISCLOSED AS SEPARATE LINE ITEM IN THE STATEMENT OF PROFIT AND LOSS.

EXTRAORDINARY items

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Extraordinary items are income or expenses that arise from events or transactions that are clearly distinctfrom the ordinary activities of the enterprise and, therefore, are not expected to recur frequently or regularly.

Prior PERIOD items 10

Prior period items are income or expenses which arise in the current period as a result of errors or omissions in the preparation of the financial statements of one or more prior periods.

Also DEALS With : 11

CHANGE IN ACCOUNTING POLICIES

CHANGE IN ACCOUNTING ESTIMATES

Accounting Policy 12

Accounting policies are the specific accounting principles and the methods of applying those principles adopted by an enterprise in the preparation and presentation of financial statements.

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Cases in which a/cing policies can change ?14

By law By compliance of accounting standards For disclosure & preparation of financial statements

Accounting estimates 15

Accounting estimates refers to determination of amount , based on past experiences or latest information available for accounting treatment .

Disclosure 16

Extraordinary items should be disclosed in the statement of profit and loss as a part of net profit or loss for the period. The nature and the amount of each extraordinary item should be separately disclosed in the statement of profit and loss in a manner that its impact on current profit or loss can be perceived.

When items of income and expense within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items should be disclosed separately.

The nature and amount of prior period items should be separately disclosed in the statement of profit and loss in a manner that their impact on the current profit or loss can be perceived.

Any changes in accounting estimates/ policies should be disclosed separately .

Thank you …….

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Designed- ramJi💃