INTERMEDIATE (IPC) COURSE
STUDY MATERIAL
PAPER : 1
ACCOUNTING
MODULE – 1
BOARD OF STUDIES
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
© The Institute of Chartered Accountants of India
, This study material has been prepared by the faculty of the Board of Studies. The objective of
the study material is to provide teaching material to the students to enable them to obtain
knowledge in the subject. In case students need any clarifications or have any suggestions to
make for further improvement of the material contained herein, they may write to the Director
of Studies.
All care has been taken to provide interpretations and discussions in a manner useful for the
students. However, the study material has not been specifically discussed by the Council of
the Institute or any of its Committees and the views expressed herein may not be taken to
necessarily represent the views of the Council or any of its Committees.
Permission of the Institute is essential for reproduction of any portion of this material.
© The Institute of Chartered Accountants of India
All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or
transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording, or
otherwise, without prior permission, in writing, from the publisher.
Revised Edition : July, 2015
Website : www.icai.org
E-mail :
Committee/ : Board of Studies
Department
ISBN No. :
Price (All Modules) : `
Published by : The Publication Department on behalf of The Institute of
Chartered Accountants of India, ICAI Bhawan, Post Box No.
7100, Indraprastha Marg, New Delhi 110 002, India.
Printed by :
ii
© The Institute of Chartered Accountants of India
, A WORD ABOUT STUDY MATERIAL
Accounting constitutes a very significant area of core competence for chartered accountants.
The paper of 'Accounting' at Intermediate (IPC) level concentrates on conceptual
understanding of the crucial aspects of accounting.
The Study Material has been designed having regard to the needs of home study and distance
learning students. The students are expected to cover the entire syllabus and also practice
solving the questions given in the practice manual on their own.
The main features of the Study Material are as under:
The entire syllabus has been divided into fifteen chapters.
The Study Material has been divided into three Modules for the easy handling and
convenience of students.
In each chapter, learning objectives have been stated. The learning objectives would
enable you to understand the sequence of various aspects dealt within the chapter before
going into the details so that you know the direction of your studies.
In each chapter, the topic has been covered in a step by step approach. The text has
been explained, where appropriate, through illustrations and practical problems. You
should go through the chapter carefully ensuring that you understand the topic and can
tackle the exercises.
Many illustrations have been included in each chapter of the Study Material.
In this revised study material, sincere efforts and care has been taken to incorporate the
relevant amendments.
In this revised edition, all the practical problems have been revisited and efforts have
been taken to standardize the format of the solutions as far as possible.
Flow charts have been inserted in Chapters at appropriate places for quick reference of
students.
Any theoretical additions made in the chapters have been highlighted in bold and italics
while practical illustrations have been highlighted with grey shading in the Study Material
for easy identification and quick reference.
The Study Material has been revised in line with the relevant sections of the Companies
Act, 2013 which have come into force.
Feedback form is given in this study material wherein students are encouraged to give
their feedback/suggestions.
These features would add value to the study material and aid the students in the learning
process. In case you need any further clarification/guidance, you may send your queries at
, ; .
iii
© The Institute of Chartered Accountants of India
, SIGNIFICANT ADDITIONS/MODIFICATIONS IN
2015 EDITION OVER 2014 EDITION
Chapter Name of Name of Unit Section/ Sub- Changes
no./unit no. Chapter/ section
Chapter 1: Introduction to Para 1.8 Para amended.
Unit 1 Accounting Convergence to
Standards IFRS in India
Chapter 1: Overview of 2.1 Status of Para related to
Unit 2 Accounting Accounting Accounting
standards Standards standards and
Income Tax
Act, amended.
2.4.2 Valuation of Example added
Inventories under Costs of
conversion
2.4.3 Cash Flow Example 1
Statements added
2.4.4 Matter added
Accounting
Depreciation on amount and
Standards
Accounting methods of
depreciation.
Example 5
added.
Chart on
assessment of
deprecation
inserted.
2.4.6 Revenue Chart on
Recognition revenue
recognition
added.
2.4.8 Accounting Example 1
for investments added
iv
© The Institute of Chartered Accountants of India
STUDY MATERIAL
PAPER : 1
ACCOUNTING
MODULE – 1
BOARD OF STUDIES
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
© The Institute of Chartered Accountants of India
, This study material has been prepared by the faculty of the Board of Studies. The objective of
the study material is to provide teaching material to the students to enable them to obtain
knowledge in the subject. In case students need any clarifications or have any suggestions to
make for further improvement of the material contained herein, they may write to the Director
of Studies.
All care has been taken to provide interpretations and discussions in a manner useful for the
students. However, the study material has not been specifically discussed by the Council of
the Institute or any of its Committees and the views expressed herein may not be taken to
necessarily represent the views of the Council or any of its Committees.
Permission of the Institute is essential for reproduction of any portion of this material.
© The Institute of Chartered Accountants of India
All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or
transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording, or
otherwise, without prior permission, in writing, from the publisher.
Revised Edition : July, 2015
Website : www.icai.org
E-mail :
Committee/ : Board of Studies
Department
ISBN No. :
Price (All Modules) : `
Published by : The Publication Department on behalf of The Institute of
Chartered Accountants of India, ICAI Bhawan, Post Box No.
7100, Indraprastha Marg, New Delhi 110 002, India.
Printed by :
ii
© The Institute of Chartered Accountants of India
, A WORD ABOUT STUDY MATERIAL
Accounting constitutes a very significant area of core competence for chartered accountants.
The paper of 'Accounting' at Intermediate (IPC) level concentrates on conceptual
understanding of the crucial aspects of accounting.
The Study Material has been designed having regard to the needs of home study and distance
learning students. The students are expected to cover the entire syllabus and also practice
solving the questions given in the practice manual on their own.
The main features of the Study Material are as under:
The entire syllabus has been divided into fifteen chapters.
The Study Material has been divided into three Modules for the easy handling and
convenience of students.
In each chapter, learning objectives have been stated. The learning objectives would
enable you to understand the sequence of various aspects dealt within the chapter before
going into the details so that you know the direction of your studies.
In each chapter, the topic has been covered in a step by step approach. The text has
been explained, where appropriate, through illustrations and practical problems. You
should go through the chapter carefully ensuring that you understand the topic and can
tackle the exercises.
Many illustrations have been included in each chapter of the Study Material.
In this revised study material, sincere efforts and care has been taken to incorporate the
relevant amendments.
In this revised edition, all the practical problems have been revisited and efforts have
been taken to standardize the format of the solutions as far as possible.
Flow charts have been inserted in Chapters at appropriate places for quick reference of
students.
Any theoretical additions made in the chapters have been highlighted in bold and italics
while practical illustrations have been highlighted with grey shading in the Study Material
for easy identification and quick reference.
The Study Material has been revised in line with the relevant sections of the Companies
Act, 2013 which have come into force.
Feedback form is given in this study material wherein students are encouraged to give
their feedback/suggestions.
These features would add value to the study material and aid the students in the learning
process. In case you need any further clarification/guidance, you may send your queries at
, ; .
iii
© The Institute of Chartered Accountants of India
, SIGNIFICANT ADDITIONS/MODIFICATIONS IN
2015 EDITION OVER 2014 EDITION
Chapter Name of Name of Unit Section/ Sub- Changes
no./unit no. Chapter/ section
Chapter 1: Introduction to Para 1.8 Para amended.
Unit 1 Accounting Convergence to
Standards IFRS in India
Chapter 1: Overview of 2.1 Status of Para related to
Unit 2 Accounting Accounting Accounting
standards Standards standards and
Income Tax
Act, amended.
2.4.2 Valuation of Example added
Inventories under Costs of
conversion
2.4.3 Cash Flow Example 1
Statements added
2.4.4 Matter added
Accounting
Depreciation on amount and
Standards
Accounting methods of
depreciation.
Example 5
added.
Chart on
assessment of
deprecation
inserted.
2.4.6 Revenue Chart on
Recognition revenue
recognition
added.
2.4.8 Accounting Example 1
for investments added
iv
© The Institute of Chartered Accountants of India
