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GAAP, IAS, Indian
Accounting Standard, IFRS
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GAAP
The primary objective of nancial accountingand reporting i to provide information uefulfor ma!ing invetment and lending deciion"
Rule that govern accounting are called
Generally Accepted Accounting Principle#GAAP$
GAAP i a term that applie to broadconcept or guideline and detailed practice
in accounting, including all the convention,rule and procedure that ma!e up acceptedaccounting practice at a given time"
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%enition a per &i!ipedia '
Generally Accepted Accounting Principle#GAAP) refer to the tandard frame(or!of guideline for nancial accounting
ued in any given juridiction) generally!no(n a accounting tandard" GAAPinclude the tandard, convention, and
rule accountant follo( in recording andummari*ing, and in the preparation ofnancial tatement"
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+Accounting Principle are the rule of
action or the method and procedureof accounting commonly adopted(hile recording buine tranaction"
Accounting Principle are generaldeciion rule derived from objective
and concept of accounting (hichgovern the development of accountingtechni-ue"
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Accounting principle are divided into
t(o Accounting .oncept
Accounting .onvention
Accounting .oncept
Thee are baic aumption orfundamental propoition concerning theeconomic, political and ociologicalenvironment in (hich accounting mutoperate"
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/" 0uine 1ntity .oncept
2" Going .oncern .oncept
3" 4oney 4eaurement .oncept
5" %ouble 1ntry .oncept
6" Accounting Period .oncept7" .ot .oncept
8" Realiation .oncept
9" 4atching of .ot and Revenue .oncept:" Accrual .oncept
/;"Reliability .oncept
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Accounting .onvention Accounting convention are tradition
and cutom (hich guide theaccountant (hile preparing the
accounting tatement"
/".onvention of full dicloure
2".onvention of conervatim3".onvention of conitency
5".onvention of materiality
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FAS0 formulate accounting tandardthrough the iuance of Statements of
Financial Accounting Standards (SFAS).Thee tatement ma!e up the body ofaccounting rule !no(n a the GenerallyAccepted Accounting Principles
(GAAP). &hile FAS0 i independent, (ith cloe
relation (ith the S1., it deciion arein>uenced by a variety of entitie li!ecorporation, academia, Govt ? IRS,American Intitute of .ertied PublicAccountant #AI.PA$, Invetor ? n
Intitution, Accounting rm, etc"
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International AccountingRegulation
In /:83, the International AccountingStandards Committee (IASC) (a
founded by accountancy bodie inAutralia, .anada, France, Germany,Ireland, @apan, 4eico, the Betherland,
the
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In 2;;/, the IAS. (a replaced by theInternational Accounting Standards
Board (IASB), an independent entitybaed in Dondon, in order to overee thecontinued convergence of globalaccounting tandard"
IAS0 comprie /5 board memberappointed by the Trutee of the IAS.Foundation, a parent organi*ation"
IAS0 ha the ole reponibility ofdeveloping International FinancialReporting Standards (IFRS).
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In 2;;2, FAS0 and IAS0 agreed to(or! together to(ard the
conergence of !.S. GAAP and
IFRS. Since then, there ha been aconvergence of thee t(o et ofaccounting tandard"
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Introduction = IFRS
IFRS relate to a et of nancialaccounting reporting ytem including
pecication and frame(or! developedby ISA0, an independent accountingtandard development body, baed at
Dondon,
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S1. #Securitie and 1change.ommiion,
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Ebjective = IFRS
Primary objective of IFRS, a alorecommended by S1. #Securitie and1change .ommiion$,
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.ompoition = IFRS
IFRS mainly comprie InternationalFinancial Reporting Standard iue after2;;/ a recommended and developed by
IAS0" 0eide that, IFRS alo include International
Accounting Standard iued bet(een /:83and 2;;/ by IAS. #International Accounting
Standard .ommittee$ and interpretationderived from IFRI. #International FinancialInterpretation .ommittee$"
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Advantage = IFRS
1liminate multiple reporting
4ore cro border tranaction
Reduced cot of capital and better acceto global capital mar!et
0etter comparability and tranparency ofbuine performance and activitie
Provide impetu to cro border
ac-uiition An IFRS balance heet (ill be cloer to
economic value #n intru and invet
propertie to be recorded at fair value$
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.hallenge = IFRS
.hange in the regulatory environment
Dac! of trained and eperiencedreource
0uine performance meaurementand educating invetor and 0oard
Greater compleity in nancial
reporting proce
Signicant one time cot
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IFRS Indian Eriginal Plan
Plan for converging
The 4initry of .orporate Aair #4.A$ apart of the Government of India had in@anuary 2;/; announced a multi=phae plan
for tranition beginning April /, 2;// to thene( .onverged Indian Accounting Standard
Indian verion of IFRS, referred to a +IndAS,
The 4.A ha nali*ed thirty=ve Ind AS inFebruary 2;//"
The actual date of application of thee IndAS i yet to be notied"
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Thee tandard (ill need to beincorporated in to la( by amendment to
the .ompanie Act (hich i yet to happen
&hile thee tandard are imilar to IFRS afe( additional eemption H change have
been made to ome of them (hich mayreult in dierence bet(een IFRS and IndAS for ome companie"
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ERIGIBAD TRABSITIEB PDAB #ubject tochange$
P"ase I #.ompanie moving from April /,2;//$
.ompanie on the 0S1 Sene 3; and BS1 Bifty 6; .ompanie having lited ecuritie outide of India
.ompanie having net (orth in ece of R" /;;;crore #
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P"ase II #.ompanie moving from April/, 2;/3$
.ompanie (ith net (orth in ece of R"6;; crore #
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P"ase III#.ompanie moving from April/, 2;/5$
Dited companie having net (orth of R"6;; crore #
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ev e mp emen a on%eadline
En 2 @anuary 2;/6, the Pre Information
0ureau, Government of India, 4initry of.orporate Aair #4.A$ iued a note outliningthe variou phae in (hich Indian AccountingStandard converged (ith IFRS #Ind AS$ i
propoed to be implemented in India, for.ompanie other than 0an!ing .ompanie,Inurance .ompanie and B0F."
oluntary Adoption .ompanie can voluntarily adopt Ind AS for
accounting period beginning on or after / April2;/6 (ith comparative for period ending 3/4arch 2;/6 or thereafter" Jo(ever, once they
have choen thi path, they cannot (itch bac!"
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4andatory Applicability
Phae I
Ind AS (ill be mandatorily applicable to thefollo(ing companie for period beginning onor after # April $%#&, (ith comparative forthe period ending '# arc" $%#& or
thereafter' .ompanie (hoe e-uity andHor debt ecuritie
are lited or are in the proce of liting on anytoc! echange in India or outide India andhaving net (orth of 6;; crore IBR or more"
.ompanie having net (orth of 6;; crore IBR ormore other than thoe covered above"
Jolding, ubidiary, joint venture or aociate
companie of companie covered above"
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Phae II
Ind AS (ill be mandatorily applicable to thefollo(ing companie for period beginning onor after # April $%#, (ith comparative forthe period ending '# arc" $%# orthereafter'
.ompanie (hoe e-uity andHor debt ecuritie
are lited or are in the proce of being lited onany toc! echange in India or outide India andhaving net (orth of le than rupee 6;; .rore"
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.onverged Indian AccountingStandard
Thee are the converged Indian AccountingStandard #Ind AS$ hoted by 4.A on it(ebite" The date on (hich thee (ill comeinto force i yet to be notied"
/" Ind AS" /"
Framework for the Preparation andPresentation of Financial Statements inaccordance with Indian Accounting Standards
2" Ind AS /;/
First-time Adoption of Indian AccountingStandards
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3" Ind AS /;2
Share based Payment
5" Ind AS /;3Business Combinations
6" Ind AS /;5
Insurance Contracts7" Ind AS /;6
Non current Assets eld for Sale and
!iscontinued "perations8" Ind AS /;7
#$ploration for and #%aluation of&ineral 'esources
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9" Ind AS /;8
Financial Instruments( !isclosures
:"Ind AS /;9
"perating Segments
/;" Ind AS /
Presentation of Financial Statements
//" Ind AS 2
In%entories
/2" Ind AS 8
Statement of Cash Flows/
/3" Ind AS 9
Accounting Policies) Changes in Accounting
#stimates and #rrors
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/5" Ind AS /;
#%ents after the 'eporting Period
/6" Ind AS //Construction Contracts
/7" Ind AS /2
Income *a$es/8" Ind AS /7
Property) Plant and #+uipment
/9" Ind AS /8
,eases
/:" Ind AS /9
'e%enue
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2;" Ind AS /:
#mployee Benets
2/" Ind AS 2;
Accounting for .o%ernment .rants and!isclosure of .o%ernment Assistance
22" Ind AS 2/
*he #/ects of Changes in Foreign #$change'ates
23" Ind AS 23
Borrowing Costs
25" Ind AS 25'elated Party !isclosures
26" Ind AS 28
Consolidated and Separate Financial
Statements
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27" Ind AS 29
In%estments in Associates
28" Ind AS 2:
Financial 'eporting in yperin0ationary#conomies
29" Ind AS 3/Interests in 1oint 2entures
2:" Ind AS 32
Financial Instruments( Presentation3;" Ind AS 33
#arnings per Share
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3/" Ind AS 35
Interim Financial 'eporting
32" Ind AS 37
Impairment of Assets
33" Ind AS 38
Pro%isions) Contingent ,iabilities and Assets
35" Ind AS 39
Intangible Assets
36" Ind AS 3:
Financial Instruments( 'ecognition and&easurement
37" Ind AS 5;
In%estment Property