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TMI BlogNotifies the following accounting standards to be followed by all assessees following the mercantile system of accounting u/s 145(2)X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Accounting Standard I relating to disclosure of accounting policies : (1) All significant accounting policies adopted in the preparation and presentation of financial statements shall be disclosed. (2) The disclosure of the significant accounting policies shall form part of the financial statements and the significant accounting policies shall normally be disclosed in one place. (3) Any change in an accounting policy which has a material effect in the previous year or in the years subsequent to the previous years shall be disclosed. The impact of, and the adjustments resulting from, such change, if material, shall be shown in the financial statements of the period in which such change is made to reflect the effect of such ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to going concerns, consistency and accrual are followed in financial statements, specific disclosure in respect of such assumptions is not required. If a fundamental accounting assumption is not followed, such fact shall be disclosed. (6) For the purposes of paragraphs (1) to (5), the expressions,-- ( a ) Accounting policies means the specific accounting principles and the methods of applying those principles adopted by the assessee in the preparation and presentation of financial statements ; ( b ) Accrual refers to the assumption that revenues and costs are accrued, that is, recognised as they are earned or incurred (and not as money is received or paid) and recorded in the financial statements of the periods to which they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting policy is required by statute or if it is considered that the change would result in a more appropriate preparation or presentation of the financial statements by an assessee. (10) Any change in an accounting policy which has a material effect shall be disclosed. The impact of, and the adjustments resulting from such change, if material, shall be shown in the financial statements of the period in which such change is made to reflect the effect of such change. Where the effect of such change is not ascertainable, wholly or in part, the fact shall be indicated. If a change is made in the accounting policies which has no material effect on the financial statements for the previous year but which is reasonably expected to have a mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined in the previous year : Provided that income or expenses arising from the ordinary activities of the business or profession or vocation of an assessee though abnormal in amount or infrequent in occurrence shall not qualify as extraordinary items. ( d ) Financial statements means any statement to provide information about the financial position, performance and changes in the financial position of an assessee and includes balance-sheet, profit and loss account and other statements and explanatory notes forming part thereof ; ( e ) Prior period items means material charges or credits which arise in the previous year as a result of errors or omissions in the preparation of the financial statements of one or more previou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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