Accounting standards (AS/Ind AS) provide uniform rules and principles to record, measure and disclose transactions so that financial statements are reliable, comparable and true & fair. In Corporate Accounting, standards matter because company accounts are used by many stakeholders and are subject to statutory reporting requirements.
This topic is typically theory-heavy and scoring if you write:
You should be able to:
Standards are needed to:
In exams, connect to “true & fair view” and “stakeholder confidence”.
Both are frameworks for preparing financial statements, but Ind AS is largely aligned with IFRS principles.
Note: exact differences depend on the specific standard; write “at a broad level”.
These are assumptions underlying preparation of accounts:
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Accounting standards are needed to (any three):
Thus, standards increase confidence in corporate financial statements.
AS vs Ind AS (broad level):
(Exact differences depend on the specific standard.)
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Accounting standards (AS/Ind AS) provide uniform rules and principles to record, measure and disclose transactions so that financial statements are reliable, comparable and true & fair. In Corporate Accounting, standards matter because company accounts are used by many stakeholders and are subject to statutory reporting requirements.
This topic is typically theory-heavy and scoring if you write:
You should be able to:
Standards are needed to:
In exams, connect to “true & fair view” and “stakeholder confidence”.
Both are frameworks for preparing financial statements, but Ind AS is largely aligned with IFRS principles.
Note: exact differences depend on the specific standard; write “at a broad level”.
These are assumptions underlying preparation of accounts:
Going concern: business will continue in the foreseeable future.
Impact: assets are not valued at forced sale values.
Consistency: accounting policies are applied consistently year to year.
Impact: improves comparability; changes must be disclosed with reasons.
Accrual: transactions are recorded when they occur, not when cash is received/paid.
Impact: recognise income/expense in the period to which they relate.
Mini table:
Common concepts you can use in answers:
Quick example lines:
Record an item when:
Common bases (conceptual):
Simple flow: Identify item → Recognise → Measure → Present → Disclose
Corporate financial statements are presented in specified formats (e.g., Schedule III for companies), while standards guide:
Thus, standards + statutory formats together ensure transparent reporting.
Transaction → Identify standard → Recognise → Measure → Present → Disclose
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These assumptions form the base of reliable corporate financial reporting.