Download Quick Reference on Accounting Standard (AS) 1 Disclosure of Accounting Policies
This Standard deals with the disclosure of significant accounting policies which are followed in preparing and presenting financial statements.
To ensure proper understanding of financial statements, it is necessary that all significant accounting policies adopted in the preparation and presentation of financial statements should be disclosed. Such disclosure should form part of the financial statements.
Accounting Policies refer to the specific accounting principles and methods of applying those principles adopted by the enterprise in the preparation and presentation of financial statements.
Disclosure of accounting policies or of changes therein cannot remedy wrong or inappropriate treatment of the item in the books of accounts.
Consideration in Selection of Accounting Policies
- Primary Consideration – Financial statements should represent true and fair view
- Major considerations in achieving the primary consideration
- Substance over form
Fundamental Accounting Assumptions – Disclose if not followed
- Going Concern
Change in an Accounting Policy
- Disclose change which has material effect in the current period or is reasonably expected to have material impact in later periods.
- In case of change which has material effect in the current period, disclose, to the extent ascertainable, the amount by which any item in the financial statements is affected by such change.
- If not ascertainable, wholly or in part, indicate the fact.