Areas where different Accounting Policies may be adopted as per AS-1

Areas where different Accounting Policies may be adopted as per AS-1 of ICAIIIn recent years, the number of acceptable alternative accounting treatments for various situations, in particular in the case of corporate enterprises, has significantly decreased. This is specifically due to the unification approach of various accounting standards of ICAI combined with the efforts of government, regulators, and progressive managements. This project has the potential to expand further and will continue to standardise accounting procedures. However, because every business operates under its own unique set of conditions, it would be impossible to completely do away with the possibility of using different accounting approaches.

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.

AS-1 Related Posts:

Considerations in Selection of Accounting Policies as per AS-1

Nature & Disclosure of Accounting Policies as per AS-1

Areas where different Accounting Policies may be adopted as per AS-1

Fundamental Accounting Assumptions (Going Concern, Consistency & Accrual) as per AS-1

AS-1 of ICAI: Disclosure of Accounting Policies

List of Accounting Standards of ICAI: AS-1 to AS-32

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