ACCOUNTING STANDARDS AND IFRS

Accounting standards are the principles, requirements, and guidelines that guide financial accountants in recording, summarizing, and presenting financial data. These standards ensure consistency, comparability, and transparency in financial reporting across organizations.

KEY TOPICS UNDER UNIT II:

• Accounting Standards and IFRS

• International Accounting Principles and Standards

• Matching of Indian Accounting Standards with International Standards

• Double Entry System of Accounting

• Journalizing of Transactions

• Ledger Posting

• Trial Balance

DOUBLE ENTRY SYSTEM:

The double entry system is the foundation of modern accounting. Every transaction is recorded twice - once as a debit and once as a credit. This ensures that the fundamental accounting equation (Assets = Liabilities + Equity) remains balanced.

IMPORTANCE OF ACCOUNTING STANDARDS:

• Ensures uniformity and consistency in financial reporting

• Facilitates comparison of financial statements across organizations

• Builds confidence in financial information among stakeholders

• Helps in audit and regulatory compliance

• Supports decision-making by investors and creditors

IFRS (INTERNATIONAL FINANCIAL REPORTING STANDARDS):

IFRS are a set of internationally accepted accounting standards issued by the International Accounting Standards Board (IASB). They establish requirements for the presentation of financial statements and related disclosures.

INDIAN ACCOUNTING STANDARDS (IND-AS):

India has adopted Indian Accounting Standards (Ind-AS) that are converged with IFRS to provide a globally comparable set of accounting standards for financial reporting in India.