can i follow different account policyfor group company and it branches .issue is very urgent please give suggestion any body familier with this issue.
SUBRAMANI N. (ARTICLESHIP TRAINING) (36 Points)
22 October 2012can i follow different account policyfor group company and it branches .issue is very urgent please give suggestion any body familier with this issue.
CA Revati Galgali
(B.com ACA DipIFR(ACCA) CS(Exe))
(1049 Points)
Replied 22 October 2012
Accordin to AS 1, Consistency in accounting policies, is one of the fundamental assumptions. By consistency they mean consistency of accounting policies through time and through out the organisations? isnt it ? If that is true, and we are talking about branches, which are components of an entity, how can there be inconsistency within the entity? As far as the concept holds good, I dont think this is possible, please wait for other responses, to come to a conclusion.
CA K. PAPNEJA SFM and FR FAC'LTY
(NA)
(133 Points)
Replied 23 October 2012
Dear Subramani,
This discretion is conferred upon managemet by PARA 12 of AS-6 Para-12 There are several methods of allocating depreciation over the useful life of the assets. Those most commonly employed in industrial and commercial enterprises are the straightline method and the reducing balance method. The management of a business selects the most appropriate method(s) based on various important factors e.g.
(i) type of asset,
(ii) The nature of the use of such asset and
(iii) Circumstances prevailing in the business.
A combination of more than one method is sometimes used.
CA Revati Galgali
(B.com ACA DipIFR(ACCA) CS(Exe))
(1049 Points)
Replied 23 October 2012
Thanks for clarifying :)
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