{"id":95205,"date":"2020-12-24T11:03:24","date_gmt":"2020-12-24T05:33:24","guid":{"rendered":"https:\/\/www.vskills.in\/certification\/tutorial\/?page_id=95205"},"modified":"2024-04-12T14:25:18","modified_gmt":"2024-04-12T08:55:18","slug":"indian-gaap-on-disclosure-of-accounting-policies","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/indian-gaap-on-disclosure-of-accounting-policies\/","title":{"rendered":"Indian GAAP on Disclosure of Accounting Policies"},"content":{"rendered":"\n<p>AS 1 discusses the disclosure of important accounting policies followed in preparing and presenting financial statements. The rationale behind the Standard is to encourage better understanding of financial statements by establishing the disclosure of significant accounting policies and the style in which accounting policies are disclosed in the financial statements. Such disclosure would also enhance a more significant comparison between financial statements of different enterprises.<\/p>\n\n\n\n<p>The accounting policies refer to the specific accounting principles and the methods of applying those principles adopted by the company in the preparation and presentation of financial statements. Accountant has to make decisions from various options for recording or disclosing items in the books of accounts e.g.:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Items to be disclosed<\/strong><\/td><td><strong>Method of disclosure or valuation<\/strong><\/td><\/tr><tr><td>Inventories &nbsp; Cash Flow Statement Contingent Liabilities\/Assets &nbsp; Depreciation<\/td><td>FIFO, LIFO, Weighted Average etc. &nbsp; Direct Method, Indirect Method Recorded, Provided for, Disclosed, Ignored Straight Line Method, Reducing Balance Method, Depletion Method etc<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Various accountants use different approaches. It is generally observed that in different ventures under same industry, different accounting policy is followed. Since the accounting policy implemented will have considerable effect on the financial results disclosed by the financial statement, it makes it intricate to evaluate two financial statements.<\/p>\n\n\n\n<p><strong>Disclosure of Accounting Policies<\/strong><\/p>\n\n\n\n<p>To ensure proper comprehension of financial statements, it is necessary that all major accounting policies used in the preparation and presentation of financial statements should be disclosed.<\/p>\n\n\n\n<p>The disclosure of the accounting policies should form part of the financial statements. The significant accounting policies should be ideally disclosed in one place.<\/p>\n\n\n\n<p><strong>Disclosure of Changes in Accounting Policies<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Any variation in the accounting policies which has a material effect in the current period or which is reasonably expected to have a material effect in a later period should be disclosed.<\/li><li>In the case of a change in accounting policies, which has a material effect in the current period, the amount by which any item in the financial statements is affected by such change should also be disclosed to the extent ascertainable.<\/li><li>Where such amount is not ascertainable, wholly or in part, the fact should be indicated.<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>AS 1 discusses the disclosure of important accounting policies followed in preparing and presenting financial statements. The rationale behind the Standard is to encourage better understanding of financial statements by establishing the disclosure of significant accounting policies and the style in which accounting policies are disclosed in the financial statements. Such disclosure would also enhance&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-95205","page","type-page","status-publish","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Indian GAAP on Disclosure of Accounting Policies - Tutorial<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/indian-gaap-on-disclosure-of-accounting-policies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Indian GAAP on Disclosure of Accounting Policies - Tutorial\" \/>\n<meta property=\"og:description\" content=\"AS 1 discusses the disclosure of important accounting policies followed in preparing and presenting financial statements. 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