Accounting Standards AS 1 Disclosure of Accounting Policies

CA

In brief with examples and summary towards a better understanding of the subject. Mostly the AS 1 Disclosure of Accounting Policies deals with preparing and presenting the financial statements.

The main purpose of the AS 1 is to better understand the financial statements which is make us to aware of the accounting policies and the manner in which accounting policies are disclosed in the financial statements. Disclosure of the accounting policies mainly depends upon the fundamental accounting assumptions.

Fundamental Accounting Assumptions

Going Concerned:- Every Firm Enterprises or Business are established for the Foreseeable Future. We assume that the Enterprises neither liquidation of curtailing materially the scale of operations.

Consistency:- Here we assume that the Accounting Policies are consistent from one period to another Period of time.

Accrual Concepts:- Anticipate all expenses and losses but not all incomes and gains. It means to record all the money-related transactions whether they are paid or not.

Areas in Which Different Accounting Policies are Adopted

  • methods of Depreciation, Depletion, and Amortization.
  • Treatment of Expenditure during the Construction.
  • Conversion or Translation of Foreign Currency Items
  • Valuation of Inventories
  • Valuation of Investments.
  • Treatment of Retirement benefits.
  • Treatment of goodwill.
  • Recognition of Profit on long term Contracts
  • Valuation of Fixed Assets.
  • Treatment of Contingent Liabilities.

Prudence:-
Substance Over Form:-
Materiality:- The Financial Statements should be declared all the material items.
Disclosure of Accounting Policies

Accounting Standards AS 1 Main Principles
The Disclosure of the significant 

Disclosure of Accounting Policies

Disclosure of accounting policies is necessary in order to aware of the true and fair financial information to the users.
These statements help internal and external users to aware of the company position.
Any change in accounting policy is related to material effect are disclosed.
Every firm or enterprise is operating different types of accounting policies that are related to the disclosure of accounting information.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.