Accounting Standards are written policy documents issued by government or expert accounting body or other regulatory body covering the aspects of measurement, recognition, presentation, treatment and disclosure of accounting transactions in financial statements. Currently, in India, there are 27 Accounting Standards (AS).
The objective of Accounting Standards (AS) is to standardize the diversified policies and practices of accounting with a view to ensure the reliability to the financial statements and to eliminate the possibility of financial statements non-comparability.
The enterprises can be classified and labelled in three categories namely Level I, Level II and Level III companies. Accounting Standards (AS) are applicable to the enterprises based on such classification and such category in which they come under.
Enterprises are termed as Level I companies when they come under in one or more below mentioned categories
Enterprises that are not Level I enterprise and comes under any one or more category below mentioned are classified as Level II Companies
Level III enterprises are those companies which do not come under Level I and Level II categories of enterprises.
|Level I||Level II||Level III|
|AS 1||Accounting Standard for Disclosure of Accounting Principles||✓||✓||✓|
|AS 2||Accounting Standard relating Valuation of Inventories||✓||✓||✓|
|AS 3||Accounting Standard regarding Cash Flow Statements||✓||X||X|
|AS 4||Accounting Standard for Contingencies and Events Occurring After the Balance Sheet Date||✓||✓||✓|
|AS 5||Accounting Standard relating to Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies||✓||✓||✓|
|AS 6||Accounting Standard regarding Depreciation Accounting||✓||✓||✓|
|AS 7||Accounting Standard for Construction Contracts (Revised 2002)||✓||✓||✓|
|AS 9||Accounting Standard regarding Revenue Recognition||✓||✓||✓|
|AS 10||Accounting Standard relating to Accounting for Fixed Assets||✓||✓||✓|
|AS 11||Accounting Standard for The Effects Of Changes In Foreign Exchange Rates (Revised 2003)||✓||✓||✓|
|AS 12||Accounting Standard relating to Accounting for Government Grants||✓||✓||✓|
|AS 13||Accounting Standard for Accounting for Investments||✓||✓||✓|
|AS 14||Accounting Standard regarding Accounting for Amalgamations||✓||✓||✓|
|AS 15||Accounting Standard for Employee Benefits (Revised 2005)||✓||✓||✓|
|AS 16||Accounting Standard relating to Borrowing Costs||✓||✓||✓|
|AS 17||Accounting Standard for Segment Reporting||✓||X||X|
|AS 18||Accounting Standard regarding Related Party Disclosures||✓||X||X|
|AS 19||Accounting Standard for Leases||✓||Partial||Partial|
|AS 20||Accounting Standard related to Earnings Per Share||✓||Partial||Partial|
|AS 21||Accounting Standard regarding Consolidated Financial Statements||✓||X||X|
|AS 22||Accounting Standard for Accounting for taxes on income||✓||✓||✓|
|AS 23||Accounting Standard relating to Accounting for Investments in Associates in Consolidated Financial Statements||✓||X||X|
|AS 24||Accounting Standard for Discontinuing Operations||✓||X||X|
|AS 25||Accounting Standard regarding Interim Financial Reporting||✓||X||X|
|AS 26||Accounting Standard relating to Intangible Assets||✓||✓||✓|
|AS 27||Accounting Standard for Financial Reporting of Interests in Joint Ventures||✓||X||X|
|AS 28||Accounting Standard relating to Impairment of Assets||✓||✓||✓|
|AS 29||Accounting Standard includes Provisions, Contingent Liabilities and Contingent Assets||✓||Partial||Partial|
As per Section 129 of the Companies Act, 2013, every enterprise are required to follow Accounting Standards (AS) (given under section 133) at the time of preparing its financial statements.
Enterprises shall comply with AS 25 only if they are required or voluntarily choose to prepare and present an interim financial report.
In a case, if there is any conflict between any applicable Act provisions and Accounting Standard (AS) than is such case the provisions of the Act shall prevail to that extent.