Applicability of accounting standards
Querist : Anonymous
Querist : Anonymous
I agree that Accounting Standards are applicable to all entities. The question is about the basis of accounting. e.g. AS-9 on "Revenue Recognition" talks about accrual of revenue. Like this many accounting standards talk about recognition principles which are mainly based on accrual method. Entities other than companies have a choice of following cash basis of accouting. In such a situation, would they be required to follow these accounting standards for recognition principles.
Querist : Anonymous
e.g. If the goods are sold on credit, as per AS-9, sale is recognised the moment the property in the goods gets transferred to the buyer (assuming the amount is collectible in future) irrespective of when the amount is received. This is accrual basis of accounting. Please let me know how do we apply this principle in cash basis of accounting? Since as per cash basis of accounting, the sale is recognised only when amount is realised.
Querist : Anonymous
That's what exactly my query was. I feel that only those accounting standards that deal with measurement principles would be applicable to entities following cash basis of accounting. the standards dealing with recognition principles may not be applicable as all the standards are based on accrual method of accounting. That is also confirmed by AS-1 which says that if the fundamental accounting assumptions (going concern, consistency and accrual) are not followed then the same needs to be specifically mentioned. Kindly provide your inputs on the above.
Click here to login now
Similar Resolved Queries
- Inventory of finished goods
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- Tds on building rent monthly
- Applicability of Ind As to associate of associate
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Disallowance of Section 43B(h) to sez units
- Sale of property furniture sale
- RCM INVOICING FROM NOV-2024
- Confusion around Form 26QB fields
- GST Regis.
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
Trending Online Classes
CAclubindia
