Accounting Standard

AS-1: DISCLOSURE OF ACCOUNTING POLICIES

This standard deals with the requirement of disclosing significant accounting policies adopted in the preparation of financial statements and the manner in which they are to be disclosed in the financial statements. This facilitates better understanding of financial statements and enables meaningful inter-firm comparison.

The standard defines ‘Accounting Policies’ as specific accounting principles and the methods of applying those principles adopted by an enterprise in the preparation and presentation of financial statements. The primary consideration behind the selection of accounting policies is that the financial statements should represent a true and fair view of the state of affairs of the enterprise and its working results. Besides the ‘true and fair’ consideration, other major considerations being Prudence, Substance-over-form and Materiality. Further, the standard states three fundamental assumptions, namely, Going Concern,...