Accounting Standard
GAAP
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It is Generally Accepted Accounting Principle
Refer to a common set of accounting principles, standards, and procedures that business reporting entity
must follow when it prepares and presents its financial statement
It is a combination of authoritative standard (set by policy boards) and the commonly accepted ways
of recording and reporting accounting information.
At international level such authoritative standards are known as International Financial Reporting
Standards (IFRS) and
In India we have authoritative standards named as AS and IND AS
ACCOUNTING STANDARDS (AS)
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Accounting standards are written policy documents
Issued by the government with the support of other regulatory bodies (e.g. Ministry of Corporate Affairs
(MCA)
Issuing accounting standards for corporate in consultation with National Financial Reporting Authority
(NFRA)
Covering the following aspects of accounting transactions in financial statement
o Recognition of events and transactions
o Measurement of events and transactions
o Presentation of transactions and events and
o Disclosure of requirement
The Council of the ICAI has so far issued 29 accounting standards
Accounting Standard 6 on depreciation accounting and AS 8 on accounting for research and
development has been withdrawn
AS 10 has been renamed form Accounting for Fixed Assets to Property, Plant and Equipment
Thus, effectively there are 27 Accounting Standards at present
The AS issued by the Accounting Standing Board (ASB, 1977)
Established standard which have to be complied with the business entities
So that the financial statements are prepared in accordance with GAAP
IAS & IFRS
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London based group namely the International Accounting Standards Committee (IASC) issued the
International Accounting Standard (IAS)
IAS issued to promote acceptance and observance of International Accounting Standards worldwide
Between 1997 and 1999 the IASC restructured their organization, which resulted in formation of
International Accounting Standard Board IASB
IASB came into effect on 1 April, 2001
So, IASC is presently known as IASB
IASB issued its standard in a series of pronouncement called International Financial Reporting
Standard (IFRS)
IASB has not rejected the standard issued by the ISAC those pronouncements continue to be designated as
International Accounting Standard (IAS)
IFRS
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IFRS are considered a principal-based set of a standard
So, IFRS are ‘principle based’. And not ‘rule based’.
It is issued by the IASB
These are issued with the intention of applying these standards across the globe on a consistent basis
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It ensures high quality transparent reporting that would ensure comparability among the entities across the
globe
Group consolidation will be easy with same standard by all companies in group irrespective of their Global
location
IND AS
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The Government of India in consultation with the ICAI (Institute of Chartered Accountants of India)
decided to converge and not to adopt IFRS issued by the IASB
The Ind AS, as notified under section 133 of the Companies Act, 2013
Have been formulated keeping the Indian economic & legal environment in view
So, Ind AS are IFRS converged standards issued by the Central Government of India under the
supervision and control of ASB of ICAI and in consultation with NFRA
IND AS named and number in the same way as the corresponding IFRS/IAS