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P2 C7 Accounting Standards : Concept and Objectives — Account STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceAccountP2 C7 Accounting Standards : Concept and Objectives3 Marks
Question
Write a short note on Accounting Standards.
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Answer

Accounting Principle, Concepts and Conventions are used in writing accounts and in preparingfinancial statements. Due to diverse accounting practices, the same transactions may berecorded differently, because to different opinions of accounts. If different companies adoptdifferent policies for the same accounting matter, accountants do not remain comparable &useful conclusions cannot be drawn from such accounts. To bring uniformity in preparation& presentation of financial statements, attempt are made at the international & national levelto formulate & issue accounting standards.
  • For this purpose, in the year $1973,$ International Accounting Standard Committee $(IASC)$was setup on $1st$ April $2001.$
  • In the year $1977$ the Accounting Standards Board $(ASB)$ was set up on $21st$ April toformulate accounting standards for $ICAI$ in India.
  • The Institute of Chartered Accounts of India $(ICAI)$ issues Indian Accounting Standards.
  • $IASB$ issues International Financial Reporting Standard $(IFRS)$ with a view to uniform theaccounting practice worldwide.
  • In India also for applying $IFRS, ICAI$ has started issuing Indian Accounting Standard $($Ind $AS)$compatible with $IFRS.$

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