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Accounting standards - 1 - Coggle Diagram
Accounting standards - 1
- Accounting Standards Basics
- Definition: Written policy documents on financial statements' accounting transactions.
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- Objectives of Accounting Standards
- Promotion of Financial Information: Timely and useful information dissemination.
- Standardization: Set of accounting policies, valuation norms, and disclosure requirements.
- Quality Improvement: Enhances financial reporting quality through compatibility, consistency, and transparency.
- Mandatory Disclosure: Ensures necessary disclosure of accounting principles.
- Interfirm Comparison: Aims to eliminate accounting alternatives for better comparison.
- Creative Accounting Reduction: Reduces accounting policy manipulation.
- Disadvantages of Accounting Standards
- Alternative Solutions: Difficulty in choosing solutions for specific problems.
- Rigid Application: May focus on form over substance.
- Statutory Limitations: Standards cannot override laws.
- Accounting Standards Board (ASB)
- Formation Date: April 21, 1977, by ICAI.
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- Nominated Members: CBDT, Tax
- Professional Institutions: ICWAI
- Academic Institutions: IIMs, Universities
- Government Representatives
- Institution Representatives: RBI, SEBI
- Industry Associations: ASSOCHAM, CII, FICCI
- Other Appropriate Members
- Elected Members: ICAI Council representatives.
- Nominated Members: From the central government, CAG, CBDT.
- Professional Institutions: ICWAI, ICSI representatives.
- Academic Representatives: From Universities, IIMs.
- Government Representative: Controller General of Accounts.
- Institution Representatives: RBI, SEBI, Financial Institutions.
- Industry Associations: ASSOCHAM, CII, FICCI.
- Others: As deemed appropriate by ICAI.
- Definition: A single set of high-quality, understandable, and enforceable global accounting standards.
- High-Quality: Frequently revised to adapt to the dynamic business environment.
- Understandable: Clear to both the sender and receiver.
- Uniformity Importance: Ensures comparability, availability, and transparency across countries.