What is Indian Accounting Standard?

What is Indian Accounting Standard?

What is Indian Accounting Standard?

Accounting principles, concepts and conventions are used in writing accounts and in preparing financial statements. As seen in the discussion on accounting Principles, concepts and conventions, these can be diverse accounting practices. Accountants have different opinions on various practices. Therefore, the same transaction may be recorded differently based on various accepted practices.

What is Indian accounting standards?
What is Indian accounting standards?

Examples :-

  • Straight line method or written down method value method or any other method may be used for providing depreciation.
  • Stock can be valued by FIFO or by LIFO method. Out of various options available, the choice of a particular practice depends upon the management policy.
  • If different entities adopt different policies for the same accounting matter, accounts do not remain comparable and useful conclusions cannot be drawn from such accounts.

Therefore, to bring uniformity in preparation and presentation of financial statements, attempts are made at the international and national level to formulate and issue Accounting principles. For the purpose, in the year 1973 International Accounting Standards Committee (IASC) was set up. On 1st April, 2001, International Accounting Standards Board (IASB) took over the responsibility for setting International Accounting Standards. In India, the institute of Chartered Accountants of India (ICAI) set up the Accounting Standards Board (ASB) on 21st April, 1977 to formulate accounting standards.

The institute of Chartered Accountants of India (ICAI) issues Indian Accounting Standards. IASB issues International Financial Reporting Standards (IFRS) with a view to unify the accounting practices worldwide. Now, preparation is on India also for applying IFRS and ICAI has started issuing Indian Accounting Standards (Ind Ass) compliant with IFRS.

Meanings and concepts of accounting Standards: –

  • Accounting standards are written statements of uniform accounting rules and guidelines issued by the accounting bodies (like ICAI or IASB) to be followed while preparing and presenting the financial statements. The rules, policies or guidelines stated by Accounting Standards are usually for measurement, valuation and disclosure of accounting information in the financial statements.

Definition of Accounting Standards: –

  • According to Kohlar, Accounting Standards are a code of conduct imposed on accountants by custom, law and a professional body.

In India, Central Government, in consultation with the National Advisory Committee on Accounting Standards (NACAS), notified Companies (India Accounting Standards) Rules, 2015 on 16th February, 2015 to come into force from 1st April, 2015. Under these rules, the Companies as specified there in and their auditors shall comply with the Indian Accounting Standards (Ind AS) specified there in preparation of their financial statements and audit respectively.

Professional accounting bodies (such as ASB set up by ICAI) identify areas of accounting where alternative and diverse practices are followed. After detailed deliberations, a draft of accounting standards on specific area of accounting is issued. Thereafter, suggestions or comments are also invited on such draft Accounting Standard. Then, after considering all the aspects, Accounting Standard is issued. In the initial years, sometimes such accounting standards are re commendatory for entities and are made mandatory gradually after some time. Such accounting standards may be made mandatory for specified entities or they may be made applicable to all entities. Accounting standards recommends the practice out of diverse accounting practices that are available or evaluates them in detail to ascertain acceptability thereof.

However, accounting standards are not rigid. They also permit adoption of a particular practice out of various options available. Accounting standards are prepared keeping in view the business environment and laws of the country. Therefore, when business environment or laws change, the accounting standards are revised. In case of conflict between the accounting standard and law, the law shall prevail.

Objectives and Uses of Accounting Standards: –

  • Accounting Standards is to bring uniformity in accounting policies and practices and to ensure transparency, consistency and comparability.
  • Accounting standards is to allow flexibility of adopting a particular practice or method with suitable disclosure to entities out of various acceptable accounting methods or practices available.
  • To enhance the reliability of financial statements among their users.
  • Accounting Standards provide rules and guiding principles for preparation and presentation of financial statements.
  • When financial statements are prepared in compliance with accounting standards and auditors have certified such compliance, it enhances the reliability of financial statements.


Accounting standards issued by ICAI issued by : –

The accounting standards of India, also known as Indian Accounting Standards (Ind AS), are a set of accounting standards issued by the Institute of Chartered Accountants of India (ICAI) for companies in India. These standards are based on International Financial Reporting Standards (IFRS) and are designed to ensure that financial statements provide a true and fair view of a company’s financial performance and position. Ind AS are mandatory for certain companies and voluntary for others. Companies that are required to comply with Ind AS must follow the standards for the preparation and presentation of their financial statements.

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Ind As- 1

Ind AS-2

Ind AS-7

Ind AS-8

Ind AS- 10

Ind AS-12

Ind AS-16

Ind AS- 17

Ind AS-19

Ind AS-20

Ind AS-21

Ind AS-23

Ind AS-24

Ind AS-27

Ind AS-28

Ind AS-29

Ind AS-32

Ind AS-33

Ind AS-34

Ind AS-34

Ind AS-36

Ind AS-37

Ind AS-38

Ind AS-40

Ind AS-41

Ind AS-101

Ind AS-102

Ind AS-103

Ind AS-104

Ind AS-105

Ind As- 106

Ind AS-107

Ind AS-108

Ind AS-109

Ind AS-110

Ind AS-111

Ind AS-112

Ind AS-113

Ind AS-114


Presentation of financial statements


Statement of cash flows

Accounting policies, changes in accounting estimates and errors

Events after the reporting period

Incomes taxes

Property, plant and equipment


Employee benefits

Accounting for government grants and disclosure of government Asses.

The effects of changes in foreign exchange rates

Borrowing costs

Related party disclosures

Separate financial statement

Investments in associates and joint ventures

Financial reporting in hyper in functionary economies

Financial instruments: Presentation

Earnings per share

Interim financial reporting

Impairment of assets

Provisions, Contingent liabilities and contingent assets

Intangible assets

Investment Property


First-time adoption of Indian Accounting standards

Share-based Payment

Business Combinations

Insurance Contracts

Non-current assets held for sale and discounted operations

Exploration for and Evaluation of mineral resources

Financial Instruments: disclosure

Operating Segments

Financial Instruments

Consolidated Financial Statements

Joint arrangements

Disclosure of Interests in other entities

Fair Value Measurement

Regulatory Deferral accounts

Revenue from Contracts with Customers




What are the basic accounting interview questions?

  1. Can you explain the difference between assets and liabilities?
  2. How do you prepare a balance sheet?
  3. Can you explain the difference between accrual and cash basis accounting?
  4. How do you calculate cost of goods sold?
  5. Can you explain the purpose of a trial balance?
  6. Can you explain how a general ledger works?
  7. How do you calculate depreciation?
  8. Can you explain the purpose and use of a budget?
  9. Can you explain the difference between a cash flow statement and an income statement?
  10. How do you handle discrepancies or errors in financial statements?

These are some basic accounting interview questions that you may encounter during an interview for an accounting position. It’s important to be able to explain the fundamental concepts of accounting, such as the difference between assets and liabilities, and how to prepare a balance sheet. Additionally, knowledge of accounting methodologies, such as accrual and cash basis accounting, and the ability to calculate key financial metrics, such as cost of goods sold and depreciation, will be important.

You may also be asked about your experience working with financial statements, including the general ledger and trial balance, as well as the use and preparation of budgets. It’s also important to be able to explain the difference between financial statements such as cash flow and income statement and have knowledge on how to handle discrepancies or errors in financial statements.

It’s important to come prepared with specific examples from your past experience that demonstrate your knowledge and understanding of accounting principles. Additionally, make sure to show enthusiasm and willingness to learn and grow in the role.

also read-Cost concept – Importance of cost concept


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