Introduction

 At one time, firms and corporates followed different

accounting policies and practices, that reduces the
reliability and comparability becomes different.

 Indian accounting body, Council of Institute of Charted

Accounts of India constituted Accounting Standards Board
(ASB) in April 1977 and developed Accounting Standards
(AS) recognising the need to harmonise the diverse
accounting policies and practices in India and keeping in
view the International development in the field of
accounting.

 AS are authoritative guidelines issued by ICAI regarding

accounting norms for measurement and treatment of
accounting events and transactions.
Definition

 It is defined as written statements issued

from time to time by institutions of the
accounting profession or institutions in
which there is its sufficient involvement
and which are established expressly for
this purpose.
Purpose
 Its purpose is to formulate and publish, in the public
interest, basic standards to be observed in the
presentation of audited accounts and financial
statements and to promote wide acceptance and
observance.

 It mainly deals with financial measurements and

disclosures used in producing a set of fairly
presented financial statements and they also draw
boundaries with in which acceptable conduct lies.

 In India ASB, FASB in US, ASC in UK and Canada

Functions of ASB
 To formulate AS after considering the acceptable laws,
customs, usages and business environment.

 To integrate the International Accounting Standards to the

extent possible in the light of conditions and practices
prevailing in India.

 Propagating the AS and persuading the concerned parties

to adopt them in the preparation and presentation of
financial statements.

 Issue guidance notes on AS and give clarifications on

issues arising there from.

 Reviewing the Accounting Standards (AS) periodically

Importance
 Uniform accounting practices in respect
of particular subject or peculiar event
 Comparable
 Increases reliability
 More rational and scientific
 Keep abreast of International Accounting
Standards (IAC)
International Financial Reporting
Standards (IFRS)
Introduction
 “Accounting” and “Financial Reporting” are similar but distinctly
different terms that are often used together.

 Financial reporting is the process of aggregating and

summarizing the detailed information that was assembled,
analyzed, classified, and recorded in the accounting process,
and putting it into a usable form for decision making by those
who need it.

 Globalisation allow companies to access capital from other

countries. To enhance the credibility of the entity and
marketability of securities issued requires transnational
reporting of financials.

 Realigning of financial information is of high importance as the

information needs of foreign investors differs from domestic
investors due to difference in culture, beliefs and risk taking
abilities.
Evolution of IFRS
 Establishment of International Accounting Standards arose from the
need of transnational reporting initiated in the First International
Congress of Accountants held in 1904.

 In 1966, USA, UK and Canada, joined hands to establish Accountants

International Study Group (AISG).

 In 1973, International Accounting Standard Committee (IASC) formed.

 In 1981, the IASC was given complete autonomy to set International

Accounting Standards.

 IASC was later named as IASB

 In 2001, IASB assumed the responsibility for establishing IFRS.

 IASB’s objective is to develop high quality, understandable and

enforceable accounting standards in public interest and bring about
convergence of national accounting standards and IFRS for high-quality
solutions and its rigorous applications.
Definition & Meaning
 International Financial Reporting Standards (IFRS) are a set
of international accounting standards stating how particular
types of transactions and other events should be reported
in financial statements.

 IFRS are issued by the International Accounting Standards

Board, and they specify exactly how accountants must
maintain and report their accounts.

 IFRS were established in order to have a common

accounting language, so business and accounts can be
understood from company to company and country to
country.
Mission
 The primary mission of the IFRS
Foundation is to develop, in the public
interest, a single set of high quality,
understandable, enforceable and
globally accepted financial reporting
standards based upon clearly articulated
principles.
Objectives
 To bring transparency
 To strengthen accountability
 Contribute to economic efficiency
Benefits
 Better understood in the global market place.

 Able to tap world capital markets and potentially reduce its

cost of capital.

 The company would be perceived as an international

player.

 A common financial reporting language across its various

entities, would improve internal communications, and
group decision-making.

 a company can benchmark itself with its peers across the

world, and also enable investors to make that comparison.