Accounting Standards (AS)

Accounting Standards (AS) Definition

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). Here, we will know about how many accounting standards are there in india, number of accounting standards, requirement to follow accounting standards, current accounting standards in india, accounting standard, accounting standards definition, name any one accounting standard, level 1 companies are those whose turnover for the immediate preceding accounting period exceeds

Objective of 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.

Classification of Enterprises

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.

Level I Enterprises

Enterprises are termed as Level I companies when they come under in one or more below mentioned categories

• Enterprises whose securities are listed either in India or outside India
• Enterprises that are in process to list their securities providing that resolution of Board of directors shall be available as evidence
• All banks including co-operative banks
• Enterprises carrying on insurance business
• Financial institutions
• Enterprises carrying on insurance business
• All industrial, commercial and business reporting enterprises, where the turnover not consisting other income for the immediately preceding accounting period on the basis of audited financial statements exceeds 50 Crore INR
• All industrial, commercial and business reporting enterprises whose borrowings consisting public deposits exceed 10 Crores INR at any time during the accounting period
• Holding and subsidiary enterprises of any one of the above-mentioned companies at any time during the accounting period

Level II Enterprises

Enterprises that are not Level I enterprise and comes under any one or more category below mentioned are classified as Level II Companies

• All industrial, commercial and business reporting enterprises, whose turnover not consisting other income for the immediately preceding accounting period on the basis of audited financial statements cross 40 Lakhs INR but does not cross than 50 Crore INR
• All industrial, commercial and business reporting enterprises having borrowings consisting public deposits crosses 1 Crore INR but does not crosses 10 Crores INR at any time during the accounting period
• Holding and subsidiary enterprises of any one of the above-mentioned companies at any time during the accounting period

Level III Enterprises:

Level III enterprises are those companies which do not come under Level I and Level II categories of enterprises.

Accounting Standards (AS) Applicability

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.

A Conflict Between Act and Accounting Standards (AS)

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.