In recent years, the number of acceptable alternative accounting treatments for various situations, particularly in the case of corporate enterprises. have substantially reduced specifically due to unification approach of various accounting standards of ICAI combined with the efforts of Government/ Regulators/ Progressive Managements. This initiative may grow further and will continue to unify accounting treatments. However, the availability of alternative accounting treatments can’t be eliminated altogether in view of the differing circumstances faced by the enterprises.
As per AS-1 of the ICAI on disclosure of accounting policies, the following are examples of the areas in which different accounting policies may be adopted by different enterprises:
(a) Methods of depreciation, depletion and amortisation;
(b) Treatment of expenditure during construction;
(c) Conversion or translation of foreign currency items;
(d) Valuation of inventories;
(e) Treatment of goodwill;
(f) Valuation of investments;
(g) Treatment of retirement benefits;
(h) Recognition of profit on long-term contracts;
(i) Valuation of fixed assets;
(j) Treatment of contingent liabilities.
The above list of examples is inclusive and is not intended to be exhaustive.
ICAI's AS-1 Related Posts:
To know about the 'primary considerations' in 'Selection of Accounting Policies':
To know about the 'Nature' and 'Disclosure' of Accounting Policies:
To know about the situations where different accounting polices may be adopted:
To know about what are the fundamental accounting assumptions:
To know more about the accounting standards issued by the ICAI: