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Accounting Standard

Ashley (cs) (178 Points)

17 June 2008

I would like to know the Accounting Standards which have been made mandatory for all companies inclusive of pvt companies which are to adhered from the year ending 31st March 2008. would like to know which Accounting Stds are applicable for all companies

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Shekar (CA & LCS ) (1109 Points)
Replied 17 June 2008

Hi Ashley..

In all 29 Accounting Standards have been prescribed. However their applicability is dependent on its size – Level I / II / III company. The following table lists out the Accounting Standards and its applicability.

Level I Company:

Enterprises, which fall in any one or more of the following categories, at any time during the accounting period, are classified as Level I enterprises:

i) Enterprises whose equity or debt securities are listed whether in India or outside India.

ii) Enterprises, which are in the process of listing their equity or debt securities as evidenced by the board of directors’ resolution in this regard.

iii) Banks including co-operative banks.

iv) Financial Institutions

v) Enterprises carrying on insurance business.

vi) All commercial, industrial and business reporting enterprises, whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. 500 million. Turnover does not include ‘other income’.

vii) All commercial, industrial and business reporting enterprises having borrowings, including public deposits, in excess of Rs. 100 million at any time during the accounting period.

viii) Holding and subsidiary enterprises of any one of the above at any time during the accounting period.

Level II Company:

Enterprises, which are, not Level I enterprises but fall in any one or more of the following categories are classified as Level II enterprises;

i) All commercial, industrial and business reporting enterprises, whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. 4 million, but does not exceed Rs. 500 million. Turnover does not include ‘other income’.

ii) All commercial, industrial and business reporting enterprises having borrowing, including public deposits, in excess of Rs. 10 million but not in excess of Rs. 100 million at any time during the accounting period.

iii) Holding and subsidiary enterprises of any one of the above at any time during the accounting period.

Level III Company:

Enterprises, which are not covered under Level I and Level II are considered as Level III enterprises.

Applicability

Level II and Level III enterprises are considered as SMEs

Level I enterprises are required to comply fully with all the accounting standards.

No relaxation is given to Level II and Level III enterprises in respect of recognition and measurement principles. Relaxations are provided with regard to disclosure requirements. Accordingly, Level II and Level III enterprises are fully exempted from certain accounting standards, which mainly lay down disclosure requirements. In respect of certain other accounting standards, which lay down recognition, measurement and disclosure requirements, relaxations from certain disclosure requirements are given.

Sr. No.	Particulars	Applicability
1	Disclosure of Accounting Policies	I, II, III
2	Valuation of Inventories	I, II, III
3	Cash Flow Statements	I
4	Contingencies and Events Occurring After the Balance Sheet Date	I, II, III
5	Net Profit or Loss for the period, Prior period Items and Changes in Accounting Policies.	I, II, III
6	Depreciation Accounting	I, II, III
7	Construction Contracts	I, II, III
8	Accounting for Research and Development (This standard has been withdrawn w.e.f. 01.04.2004 for all levels of enterprises and AS 26 is applicable)	As withdrawn
9	Revenue recognition	I, II, III
10	Accounting for Fixed Assets	I, II, III
11	The Effect of Changes in Foreign Exchange Rates	I, II, III
12	Accounting for Government Grants	I, II, III
13	Accounting for Investments	I, II, III
14	Accounting for Amalgamations	I, II, III
15	Accounting for Retirement Benefits in the Financial Statements of Employers	I, II, III
16	Borrowing Costs	I, II, III
17	Segment Reporting	I II-with modification III- with modification
18	Related Party Disclosures	I II-with modification III- with modification
19	Leases	I II-with modification III- with modification
20	Earning Per Share	I II-with modification III- with modification
21	Consolidated Financial Statements	I
22	Accounting for Taxes on Income	I,II,III
23	Accounting for Investments in Associates in Consolidated Financial Statements	I
24	Discontinuing Operations	I
25	Interim Financial Reporting	I
26	Intangible Assets	I,II,III
27	Financial Reporting of Interests in Joint Ventures	I-with clarification II-with clarification III-with clarification
28	Impairment of Assets	I II-with modification III-with modification
29	Provisions, Contingent Liabilities and Contingent Asset	I

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Ashley (cs) (178 Points)
Replied 22 June 2008

Dear Freind

This was the situation earlier than notification of MCA on 7th December 2006. wts the position as of date and in light of annoucement no. 286 made by ICAI in respect of harmonisation of accounting standards issued under company law by MCA and ICAI. MCA prescribes different criteria and wt i heard is that Level II and Level III stands merged now, I need to know the compliances in respect of accounting standards to be made by pvt company having profit of Rs. 5 lakhs with turnover of Rs. 25 lacs.

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Our Company is a listed quoted company. Planning to enter a JV with %age of 20% to 50%. Does it require Financial Consolidated Statement or only to disclose the Financial summary of that JV ?