CHAPTER 1 INTRODUCTION TO ACCOUNTING
STANDARDS
1. What do you understand by Accounting Standard?
Accounting Standards are the policy documents or written statements issued, from time to time,
by an apex expert accounting body in relation to various aspects of measurement, treatment
and disclosure of accounting transactions for ensuring uniformity in accounting practices and
reporting. These standards are prepared by Accounting Standard Board (ASB). Accounting
Standards are formulated with a view to harmonies different accounting policies and practices
in use in a country.
2. What is the need and purpose of Accounting Standards?
Meaning of Accounting Standards:
Accounting Standards are the policy documents or written statements issued, from time to time,
by an apex expert accounting body in relation to various aspects of measurement, treatment
and disclosure of accounting transactions for ensuring uniformity in accounting practices and
reporting. These standards are prepared by Accounting Standard Board (ASB). Accounting
Standards are formulated with a view to harmonies different accounting policies and practices
in use in a country.
Need and Purpose of Accounting Standards:
The whole idea of accounting standards is centered around harmonization of accounting
policies and practices followed by different business entities so that the diverse accounting
practices adopted for various aspects of accounting can be standardized. Accounting standards
standardizes diverse accounting policies with a view to:
a) To provide information to the users as to the basis on which the accounts have been
prepared and the financial statements have been presented.
b) To serve the statutory purpose of eliminating the impact of diverse accounting policies
and practices and to ensure uniformity in accounting policies and practices, i.e., to
harmonize the diverse accounting policies and practices which are in use of the
preparation and presentation of financial statements.
c) To make the financial statements more meaningful and comparable and to make people
place more reliance on financial statements prepared in conformity with the accounting
standards.
d) To guide the judgement of professional accountants in dealing with those items, which
are to be followed consistently from year to year.
e) To provide a set of standard accounting policies, valuation norms and disclosure
requirements.
3. Explain briefly the importance of Accounting Standards?
Meaning of Accounting Standards:
Accounting Standards are the policy documents or written statements issued, from time to time,
by an apex expert accounting body in relation to various aspects of measurement, treatment
and disclosure of accounting transactions for ensuring uniformity in accounting practices and
STANDARDS
1. What do you understand by Accounting Standard?
Accounting Standards are the policy documents or written statements issued, from time to time,
by an apex expert accounting body in relation to various aspects of measurement, treatment
and disclosure of accounting transactions for ensuring uniformity in accounting practices and
reporting. These standards are prepared by Accounting Standard Board (ASB). Accounting
Standards are formulated with a view to harmonies different accounting policies and practices
in use in a country.
2. What is the need and purpose of Accounting Standards?
Meaning of Accounting Standards:
Accounting Standards are the policy documents or written statements issued, from time to time,
by an apex expert accounting body in relation to various aspects of measurement, treatment
and disclosure of accounting transactions for ensuring uniformity in accounting practices and
reporting. These standards are prepared by Accounting Standard Board (ASB). Accounting
Standards are formulated with a view to harmonies different accounting policies and practices
in use in a country.
Need and Purpose of Accounting Standards:
The whole idea of accounting standards is centered around harmonization of accounting
policies and practices followed by different business entities so that the diverse accounting
practices adopted for various aspects of accounting can be standardized. Accounting standards
standardizes diverse accounting policies with a view to:
a) To provide information to the users as to the basis on which the accounts have been
prepared and the financial statements have been presented.
b) To serve the statutory purpose of eliminating the impact of diverse accounting policies
and practices and to ensure uniformity in accounting policies and practices, i.e., to
harmonize the diverse accounting policies and practices which are in use of the
preparation and presentation of financial statements.
c) To make the financial statements more meaningful and comparable and to make people
place more reliance on financial statements prepared in conformity with the accounting
standards.
d) To guide the judgement of professional accountants in dealing with those items, which
are to be followed consistently from year to year.
e) To provide a set of standard accounting policies, valuation norms and disclosure
requirements.
3. Explain briefly the importance of Accounting Standards?
Meaning of Accounting Standards:
Accounting Standards are the policy documents or written statements issued, from time to time,
by an apex expert accounting body in relation to various aspects of measurement, treatment
and disclosure of accounting transactions for ensuring uniformity in accounting practices and
