What Are Indian Accounting Standards?

 Indian Accounting Standards

Indian Accounting Standards (Ind AS) are a set of accounting standards notified by the Ministry of Corporate Affairs (MCA), Government of India, in accordance with the Companies Act, 2013. These standards are largely converged with the International Financial Reporting Standards (IFRS), which are global accounting standards issued by the International Accounting Standards Board (IASB).

The objective of adopting Ind AS is to enhance the transparency, comparability, and quality of financial reporting in India. They provide guidelines on recognition, measurement, presentation, and disclosure of various financial transactions and events in the financial statements of companies.

Objectives of the Indian Accounting Standards

The primary Plan of the Indian Accounting Standards (IND AS) is to ensure that large-scale activities are correctly accounted for through continuous disclosure, treatment, and reformation.

IND AS standardizes accounting policies and principles for the nation's economy. Provides a unified framework for the preparation of books of account and promotes financial transparency. Indian Accounting Standards (IND AS) ensure that all institutions and governmental bodies are recognized overseas.

Benefits of Indian Accounting Standards

Global Recognition: Ind AS aligns Indian accounting practices with International Financial Reporting Standards (IFRS), allowing for easier comparison of financial statements to those of global peers. This increases the credibility and appeal of Indian businesses to international investors and stakeholders.
Improved Transparency: The Indian Accounting Standard requires companies to disclose relevant information, such as off-balance-sheet items, contingent liabilities, and related-party transactions. This allows investors and stakeholders to make better-informed decisions.
Enhanced Comparability: By adopting internationally recognized accounting standards, Ind AS helps the comparison of financial statements across companies, industries, and jurisdictions. This enhances the ability of investors, analysts, and regulators to evaluate entities' financial performance and position.

Better Decision-Making: Ind AS provides more relevant and reliable financial information to management, investors, creditors, and other stakeholders, allowing them to make better decisions. This is especially important when evaluating the financial health and prospects of businesses.
Access to Capital: Compliance with the Ind AS may improve access to capital by increasing investor confidence and lowering the perceived risk of investing in Indian companies. This can result in lower borrowing costs and greater availability of funding for growth and expansion.
Increased Investor Confidence: Ind AS encourages higher-quality financial reporting, lowering the risk of financial misstatements or errors. This increases investor trust and confidence, resulting in improved capital market efficiency.

List of Accounting Standards in India

Sr. NO	IND AS NO:		Name of Indian Accounting Standards (IND AS)
1.	Ind AS 101		Ind AS is being used for the first time.
2.	Ind AS 102		Shared Payment.
3.	Ind AS 103		Business Combination.
4.	Ind AS 104		Insurance Contracts.
5.	Ind AS 105		Non-current assets are for sale, and operations have been discontinued.
6.	Ind AS 106		Exploration and evaluation of minerals.
7.	Ind AS 107		Financial Instruments & Disclosures.
8.	Ind AS 108		Operating Segments.
9.	Ind AS 109		Financial Instruments.
10.	Ind AS 110		Consolidated Financial Statements.
11.	Ind AS 111		Joint Arrangements.
12.	Ind AS 112		Disclosure of Interests in Other object.
13.	Ind AS 113		Fair Value Measurement.
14.	Ind AS 114		Regulatory Deferral Accounts.
15.	Ind AS 115		Revenue from Contracts with Customers (Applicable from April 2018).
16.	Ind AS 116		Leases – Applicable from April 2019.
17.	Ind AS 1		Presentation of Financial Statements.
18.	Ind AS 2		Inventories.
19.	Ind AS 7		Cash Flow Statement
20.	Ind AS 8		Accounting Policies, Changes in Accounting Estimates, and Mistakes.
22.	Ind AS 11		Construction Contracts – Amendment Rules, 2018.
23.	Ind AS 12		Income Taxes.
24.	Ind AS 16		Property, Plant, and Equipment.
25.	Ind AS 19		Employee Benefits.
26.	Ind AS 20		Accounting for and disclosing government grants.
27.	Ind AS 21		The Effects of Foreign Exchange Rate Changes.
28.	Ind AS 21		The Effects of Changes in Foreign Exchange Rates.
29.	Ind AS 23		Borrowing Costs.
30.	Ind AS 24		Related Party Disclosures.
31.	Ind AS 27		Separate Financial Statements.
32.	Ind AS 28		Investments in Associates and Joint Ventures.
33.	Ind AS 29		Financial Reporting in Hyperinflationary Economies.
34.	Ind AS 32		Financial Instruments: Presentation.
35.	Ind AS 33		Earnings per Share.
36.	Ind AS 34		Interim Financial Reporting.
37.	Ind AS 36		Impairment of Assets.
38.	Ind AS 37		Provisions, Contingent Liabilities, and Contingent Assets.
39.	Ind AS 38		Intangible Assets.
40.	Ind AS 40		Investment Property.
41.	Ind AS 41		Agriculture.

CONTACT US 

AIAT INSTITUTE

Address: AIAT Institute, 15 Bhande Plot Umred Road Nagpur.

Phone: 9604121000

Website: www.aiatindia.com

Question & Answer

1. Which governmental body in India is responsible for notifying Indian Accounting Standards (Ind AS)?

A) Securities and Exchange Board of India (SEBI)

B) Ministry of Finance

C) Ministry of Corporate Affairs (MCA)

D) Reserve Bank of India (RBI)

Answer: C) Ministry of Corporate Affairs (MCA)

2. What is the primary objective of adopting Indian Accounting Standards (Ind AS)?

A) Minimize taxation for corporations

B) Enhance transparency, comparability, and quality of financial reporting

C) Reduce government oversight in financial reporting

D) Standardize accounting practices only for multinational corporations

Answer: B) Enhance transparency, comparability, and quality of financial reporting

3. Which international accounting standards are largely converged with Indian Accounting Standards (Ind AS)?

A) Generally Accepted Accounting Principles (GAAP)

B) International Accounting Standards (IAS)

C) International Financial Reporting Standards (IFRS)

D) Generally Accepted Auditing Standards (GAAS)

Answer: C) International Financial Reporting Standards (IFRS)

4. What is the benefit of aligning Indian accounting practices with International Financial Reporting Standards (IFRS)?

A) Decreased credibility of Indian businesses internationally

B) Limited access to global capital markets

C) Increased credibility and appeal to international investors

D) Greater regulatory burden on Indian companies

Answer: C) Increased credibility and appeal to international investors

5. Which Ind AS standard deals with the recognition, measurement, presentation, and disclosure of financial instruments?

A) Ind AS 107

B) Ind AS 103

C) Ind AS 1

D) Ind AS 116

Answer: A) Ind AS 107

6. When did the standard Ind AS 115, which deals with revenue recognition, become applicable?

A) April 2017

B) April 2018

C) April 2019

D) April 2020

Answer: B) April 2018

7. Which Ind AS standard governs the accounting treatment for leases?

A) Ind AS 101

B) Ind AS 102

C) Ind AS 116

D) Ind AS 113

Answer: C) Ind AS 116

8.Which Ind AS standard focuses on the presentation of financial statements?

A) Ind AS 103

B) Ind AS 1

C) Ind AS 112

D) Ind AS 107

Answer: B) Ind AS 1

9. Which Ind AS standard deals with accounting for employee benefits?

A) Ind AS 19

B) Ind AS 20

C) Ind AS 21

D) Ind AS 23

Answer: A) Ind AS 19

10. What does Ind AS 109 focus on?

A) Business combinations

B) Financial instruments

C) Joint arrangements

D) Regulatory deferral accounts

Answer: B) Financial instruments

Important activities every businessman should complete before 31st March.

 

Important Things to do before financial Year End

In India, the financial year is from April 1st to March 31st every year. As a result, the 31st of March is a critical deadline for meeting significant financial obligations.
The mercantile system, also known as the accrual basis of Accounting, requires transactions to be recorded when they occur, regardless of when the cash is exchanged. This means that transactions are recognized when revenue is earned and expenses are incurred, rather than when the cash is received or paid out. For professionals who primarily use the cash system of Accounting, which involves recording transactions based on actual receipts and payments, the financial year-end due date of March 31st is equally important, as explained below.

1) Calculate Payable Advance Tax

The "pay as you earn" (PAYE) principle is a method of income tax collection where employers deduct tax from employees' paychecks and remit it to the government on their behalf. This system ensures that taxes are collected regularly throughout the year rather than in a lump sum at the end. Therefore, during the fiscal year from 1st April 2017 to 31st March 2018, advance income tax was payable on or before 15th June 2017, 15th September 2017, 15th December 2017, and 15th March 2018. If an assessed does not pay at least 90% of his tax payable in advance on or before March 31, 2018, interest will start to accrue from April 1st, 2018 until the month of payment.

As a result, an assessed should estimate his taxable income as accurately as possible, calculate his tax liability, and deduct the Tax Deducted at Source (TDS) to arrive at the total advance tax payable, which must be paid by March 31st. It is necessary that the advance tax paid be credited to the central government's account before March 31st, and that the challan serial number be received by March 31st or earlier. A mere deposit before the 31st of March is insufficient.

2) Make Investments to Save Tax

Investing to save taxes can be a smart financial strategy, but it's essential to consider your individual financial situation, goals, and risk tolerance before making any investment decisions.

Retirement Accounts: Contributing to retirement accounts such as 401(k), Individual Retirement Accounts (IRAs), or similar plans can provide tax benefits. Additionally, earnings within these accounts typically grow tax-deferred until withdrawal, potentially allowing your investments to grow faster.

3) Manage Physical Inventory

Take a physical inventory of raw materials, work in progress, finished goods, stores and spares, loose tools, and consumables as of March 31st. Also, compile information on its market value as of March 31st, which will be required at the time of valuation for inclusion in the Balance Sheet as of March 31st.

4) Purchase Of Fixed Assets For Business

Purchase an asset to claim depreciation (at half the specified rate). If a tangible or intangible fixed asset was purchased for business purposes during the previous year and is used for business or profession for 180 days or more, depreciation will be allowed at the percentage specified for that type of asset.

5) Find out Capital Gains

If an assessed has taxable capital gains during the fiscal year 2017-18, he can try to identify his capital assets, particularly shares, mutual funds, debentures, and so on, that if sold during the fiscal year would result in a capital loss. He can sell such assets on or before March 31, 2018 and book a capital loss, which will help to offset the taxable capital gain and, as a result, reduce or nullify the capital gains tax.

6) Clean-up Your Loan Accounts

Cleaning up your loan accounts involves several steps to ensure that they are well-organized, up-to-date, and manageable.

Review Your Loan Documents: Start by gathering all your loan documents, including statements, contracts, and correspondence from your lenders. Review them carefully to understand the terms, interest rates, repayment schedules, and any other important details.

Credit Report: Review it to ensure that all your loan accounts are accurately reported and there are no errors or discrepancies.

7) Manage Professional Income & Expenses

In professions that use the cash accounting system, business expenses can only be deducted if they are paid on or before March 31st. As a result, all business expenses for the period ending March 31st should be paid on or before that date.

Professional Receipts: For professionals who use cash accounting systems, deposit all professional receipts in a bank account by March 31, 2018, rather than deferring them to the following fiscal year. This is because the payer must have deducted TDS on the same and will file a TDS Return with the amount paid to you and the corresponding TDS.

8 ) File your income tax return

The 31st of March is the deadline for filing pending income tax returns for the previous fiscal year. It is critical to keep your income tax returns up to date.

9) Calculate GST turnover

Businesses that have not yet reached the GST registration limit of Rs.20 lakh should keep track of their turnover. The total turnover up to March 31st is to be calculated in order to determine important aspects such as the applicability of GST registration, eligibility to opt for the Composition Scheme, and the applicability of filing specific returns.

10) Reconcile GST ledgers

GST payments are made either through tax credit or challan payments. Taxpayers must reconcile the Cash Ledger, Credit Ledger, and Liability Ledger on the GSTN portal with their books of account. All entries should be submitted by the end of the year. Furthermore, debit and credit notes, rate differentials, discounts, and so on should all be reconciled.

CONTACT US 

AIAT INSTITUTE

Address: AIAT Institute, 15 Bhande Plot Umred Road Nagpur.

Phone: 9604121000

Website: www.aiatindia.com

Question & Answer

What is the deadline for filing pending income tax returns for the previous fiscal year in India?

A) March 15th
B) March 31st
C) April 15th
D) May 1st
Answer: B) March 31st

What is the consequence if an assessed does not pay at least 90% of their tax payable in advance by March 31st?

A) No consequence
B) Interest will start to accrue
C) Tax rates will increase
D) Penalty will be imposed
Answer: B) Interest will start to accrue

When should professionals who use the cash accounting system deposit all professional receipts in a bank account?

A) After March 31st
B) On March 15th
C) By March 31st
D) Before March 1st
Answer: C) By March 31st

What is the turnover limit for GST registration in India?

A) Rs. 10 lakh
B) Rs. 15 lakh
C) Rs. 20 lakh
D) Rs. 25 lakh
Answer: C) Rs. 20 lakh

Which ledger reconciliations are essential for taxpayers regarding GST payments?

A) Credit Ledger and Asset Ledger
B) Cash Ledger and Liability Ledger
C) Expense Ledger and Revenue Ledger
D) Equity Ledger and Liability Ledger
Answer: B) Cash Ledger and Liability Ledger

What is the purpose of making investments to save taxes?

A) To increase personal expenses
B) To minimize taxable income
C) To defer tax payments indefinitely
D) To increase tax liability
Answer: B) To minimize taxable income

How often should advance income tax be paid throughout the fiscal year?

A) Once at the beginning of the year
B) Once at the end of the year
C) Quarterly
D) Semi-annually
Answer: C) Quarterly

What is the benefit of selling capital assets resulting in capital loss before March 31st?

A) Increases taxable income
B) Reduces or nullifies capital gains tax
C) Triggers additional tax liabilities
D) No impact on tax obligations
Answer: B) Reduces or nullifies capital gains tax

When should business expenses for the fiscal year ending March 31st be paid?

A) After March 31st
B) By April 15th
C) On or before March 31st
D) By May 1st
Answer: C) On or before March 31st

What is the method of income tax collection where employers deduct tax from employees' paychecks and remit it to the government on their behalf?

A) PAYE (Pay As You Earn)
B) TDS (Tax Deducted at Source)
C) GST (Goods and Services Tax)
D) VAT (Value Added Tax)
Answer: A) PAYE (Pay As You Earn)