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Accounting Standards - 2 - Coggle Diagram
Accounting Standards - 2
- International Financial Reporting Standards (IFRS): Initially 8, now 15.
- International Accounting Standards (IAS): Initially 29, now 41.
- IFRIC Interpretations: 17 standards.
- SIC Interpretations: 11 standards.
- Purpose of Financial Statements
- Provide performance and position of a company.
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- Statement of Changes to Equity
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- Users of Financial Statements
- Shareholders/Investors: Decision based on EPS.
- Banks/Lenders: Assess financial strength and solvency.
- Management: Understand profitability and cash flows for decision making.
- Competitors: Evaluate financial condition for strategic planning.
- Customers/Suppliers: Judge financial ability for long-term contracts.
- Employees/Unions: Understand business for compensation and benefits.
- Government: Assess tax liabilities.
- Investment Analysts: Make recommendations to clients.
- Rating Agencies: Assign credit ratings to companies.
- Users of Financial Statements
- Shareholders/Investors: Decision based on EPS.
- Banks/Lenders: Assess financial strength and solvency.
- Management: Understand profitability and cash flows for decision making.
- Competitors: Evaluate financial condition for strategic planning.
- Customers/Suppliers: Judge financial ability for long-term contracts.
- Employees/Unions: Understand business for compensation and benefits.
- Government: Assess tax liabilities.
- Investment Analysts: Make recommendations to clients.
- Rating Agencies: Assign credit ratings to companies.
- Formulation of Accounting Standards in India
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- Customs and usage in India
- Business environment in India
- Procedure for Issuance of Accounting Standards in India
- Determine need and priority.
- Constituting study groups.
- Draft standard preparation.
- Draft analysis and revision.
- Circulation of draft to ICAI council and specified bodies (ICWAI, ICSI, DCA, C&AG, CBDT, SCOPE, RBI, IBA, SEBI, ASSOCHAM, CCI, FICCI).
- Discussion, finalisation of exposure draft, and circulation for comments.
- Finalising exposure draft and submission to ICAI council.
- Modification (if needed) and issuance by ICAI council.