Accounting Standards 1-29 - Seth & Associates

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Note: These appendices are illustrative only and do not form part of the Accounting Standard. The purpose of the appendices is to illustrate the application of the Accounting Standard. 1st January, 20X1 31st May, 20X1 1st Nov., 20X1 31st Dec., 20X1 Example - Weighted Average Number of Shares (Accounting year 01-01-20X1 to 31-12-20X1) Balance at beginning of year Issue of shares for cash No. of Shares Issued No. of Shares Bought Back Appendix I No. of Shares Outstanding< 1,800 - 1,800 600 - 2,400 Buy Back of shares - 300 2,100 Balance at end of year Computation of Weighted Average: (1,800 x 5/12) + (2,400 x 5/12) + (2,100 x 2/12) = 2,100 shares. 2,400 300 2,100 The weighted average number of shares can alternatively be computed as follows: (1,800 x12/12) + (600 x 7/12) - (300 x 2/12) = 2,100 shares 1st January, 20X1 31st October, 20X1 Example - Partly paid shares (Accounting year 01-01-20X1 to 31-12-20X1) Balance at beginning of year No. of shares issued Nominal value of shares Appendix II Amount paid 1800 Rs. 10 Rs. 10 Issue of Shares 600 Rs. 10 Rs. 5 Assuming that partly paid shares are entitled to participate in the dividend to the extent of amount paid, number of partly paid equity shares would be taken as 300 for the purpose of calculation of earnings per share. Computation of weighted average would be as follows: (1800x12/12) + (300x2/12) = 1850 shares. Appendix III
Example - Bonus Issue (Accounting year 01-01-20XX to 31-12-20XX) Net profit for the year 20X0 Rs. 18,00,000 Net profit for the year 20X1 Rs. 60,00,000 No. of equity shares outstanding until 30th September 20X1 20,00,000 Bonus issue 1st October 20X1 2 equity shares for each equity share outstanding at 30th September, 20X1 20,00,000 x 2 = 40,00,000 Earnings per share for the year 20X1 Rs. 60,00,000 = Re. 1.00 ( 20,00,000 + 40,00,000 ) Adjusted earnings per share for the year 20X0 Rs. 18,00,000 = Re. 0.30 (20,00,000 + 40,00,000) Since the bonus issue is an issue without consideration, the issue is treated as if it had occurred prior to the beginning of the year 20X0, the earliest period reported. Example - Rights Issue (Accounting year 01-01-20XX to 31-12-20XX) Net profit Year 20X0 : Rs. 11,00,000 Year 20X1 : Rs. 15,00,000 No. of shares outstanding prior to rights issue 5,00,000 shares Appendix IV Rights issue One new share for each five outstanding ( i.e. 1,00,000 new shares) Fair value of one equity share immediately prior to exercise of rights on 1st March 20X1 Computation of theoretical ex-rights fair value per share Rights issue price : Rs. 15.00 Last date to exercise rights: 1st March 20X1 Rs. 21.00 Fair value of all outstanding shares immediately prior to exercise of rights+total amount received from exercise Number of shares outstanding prior to exercise + number of shares issued in the exercise (Rs. 21.00 x 5,00,000 shares) + (Rs. 15.00 x 1,00,000 shares) 5,00,000 shares + 1,00,000 shares Computation of adjustment factor Theoretical ex-rights fair value per share = Rs. 20.00 Fair value per share prior to exercise of rights Rs. (21.00) = 1.05 Theoretical ex-rights value per share Rs. (20.00)
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TABLE OF CONTENTS DISCLOSURE OF ACC
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Explanation Fundamental Accounting
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21. Examples of matters in respect
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Definitions 3. The following terms
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(b) storage costs, unless those cos
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27. Information about the carrying
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performance by different enterprise
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15. The separate disclosure of cash
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22. Cash flows arising from the fol
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34. Cash flows arising from taxes o
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The appendix is illustrative only a
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Interest expense (400) Interest inc
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Interest expense 400 Operating prof
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31,850 Less : Sundry debtors at the
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Short-term funds (650) Deposits hel
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not contingencies as defined in par
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8.6 Events occurring after the bala
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Accounting Standard (AS) 5 Net Prof
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financial statements in understandi
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gratuity scheme by an employer in p
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(ii) expected useful life of the de
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19. A change in the method of depre
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Accounting Standard 7 (REVISED) Con
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8. A group of contracts, whether wi
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a. costs that relate directly to th
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estimated reliably when all the fol
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of which recovery is probable; and
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defects have been rectified. Progre
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incurred for work performed upto th
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calculated as follows: (amount in R
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4.3 Proportionate completion method
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the time of raising of any claim it
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should be based on the sales value
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Accounting Standard (AS) 10 Account
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9.3 Administration and other genera
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14.4 On disposal of a previously re
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either to the asset given up or to
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Accounting Standard (AS) 11 (Revise
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Reporting currency is the currency
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Classification of Foreign Operation
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. income and expense items of the n
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historical cost for those items in
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Appendix Note: This Appendix is not
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Accounting Treatment of Government
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8.1 Grants related to specific fixe
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(The Accounting Standard comprises
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Accounting Standard (AS) 13 Account
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fair value provides a prudent metho
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31. Investments classified as curre
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(v) No adjustment is intended to be
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Treatment of Reserves on Amalgamati
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(a) consideration for the amalgamat
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41. Where the scheme of amalgamatio
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Accounting Standard (AS) 16 Borrowi
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Page 162 and 163: Accounting Standard (AS) 17 Segment
Page 164 and 165: statement of profit and loss. Segme
Page 166 and 167: segments for internal financial rep
Page 168 and 169: 24. Business and geographical segme
Page 170 and 171: calculation done in applying a part
Page 172 and 173: Secondary Segment Information 47. P
Page 174 and 175: segment, both primary and secondary
Page 176 and 177: REVENUE External sales Intersegment
Page 178 and 179: 101 90 Assets and additions to tang
Page 180 and 181: and intangible fixed assets by loca
Page 182 and 183: 4. In the context of this Statement
Page 184 and 185: (c) the director is nominated by th
Page 186 and 187: (iii) a description of the nature o
Page 188 and 189: 1. upon the occurrence of some remo
Page 190 and 191: 5. The classification of leases ado
Page 192 and 193: Rs.2,27,805. As this amount is lowe
Page 194 and 195: f. a general description of the les
Page 196 and 197: commencement of the lease term is t
Page 198 and 199: 48. If a sale and leaseback transac
Page 200 and 201: AS 20 Earnings Per Share (In this A
Page 202 and 203: c. options including employee stock
Page 204 and 205: merger is the aggregate of the weig
Page 206 and 207: 29. For the purpose of calculating
Page 208 and 209: 41. Potential equity shares are ant
Page 212 and 213: EPS for the year 20X0 as originally
Page 214 and 215: Convertible Preference Shares Incre
Page 216 and 217: (a) the ownership, directly or indi
Page 218 and 219: the consolidated financial statemen
Page 220 and 221: subsidiary and does not become an a
Page 222 and 223: Accounting Standard (AS) 22 ACCOUNT
Page 224 and 225: accounting purposes, straight line
Page 226 and 227: (a) has a legally enforceable right
Page 228 and 229: 6. If for any reason the recognitio
Page 230 and 231: Deferred tax A/c Dr. 20,000 To Prof
Page 232 and 233: Accounting Standard (AS) 23 Account
Page 234 and 235: (b) the associate operates under se
Page 236 and 237: Disclosure 22. In addition to the d
Page 238 and 239: . that represents a separate major
Page 240 and 241: infrequently. All infrequently occu
Page 242 and 243: g. the amount of pre-tax profit or
Page 244 and 245: 35. Appendix 2 illustrates applicat
Page 246 and 247: The following is Note 5 to Delta Co
Page 248 and 249: III. Financial Statements for 20X3
Page 250 and 251: 2 A separate Accounting Standard on
Page 252 and 253: 6. A complete set of financial stat
Page 254 and 255: g. segment revenue, segment capital
Page 256 and 257: 29. To illustrate: a. the principle
Page 258 and 259: Accounting Standard to assist in cl
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1. Basic Earnings Per Share 2.Dilut
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provisions for employees (b) Other
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(condensed or complete) for the fol
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1st Quarter 2nd Quarter 3rd Quarter
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Accounting for the Effects of Chang
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a. intangible assets that are cover
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ecoverable amount.4 Carrying amount
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supportable assumptions that repres
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Therefore, in addition to complying
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titles, customer lists and items si
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Past Expenses not to be Recognised
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The enterprise amortises the right
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assets, how it determines the recov
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e. copyrights, and patents and othe
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Appendix A This Appendix, which is
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aforesaid and expensed in an earlie
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without physical substance held for
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Application and Infrastructure Deve
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On 1-4-2003, the remaining period o
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Accounting Standard 27 Financial Re
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The arrangement identifies those de
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the assets; c. its share of any lia
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separately as part of the inventory
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44 In case of transactions between
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Accounting Standard (AS) 28 Impairm
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4. The following terms are used in
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e. evidence is available of obsoles
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15. It is not always necessary to d
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ate can be justified. This growth r
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38. A restructuring is a programme
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. the enterprise’s incremental bo
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generate cash inflows from continui
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determined excluding cash flows tha
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esult from synergy between the iden
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88. In allocating an impairment los
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paragraphs 106 to 107 and for goodw
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102. Any increase in the carrying a
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a. if the enterprise sells the disc
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ased on the enterprise’s primary
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EXAMPLE 3- EXAMPLE 4- EXAMPLE 5- EX
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determining value in use of both X
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Total 10,000 7,000 3,000 A24. T use
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of the asset for tax purposes is Rs
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Gross carrying amount 1,000 2,000 3
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in forecasting cash flows. This res
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Schedule 1. Calculation of the plan
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Schedule 5. Summary of the carrying
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End of 20X4 A B C Goodwill Z Carryi
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in Rs. lakhs) Year Future cash flow
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Accounting Standard (AS) 29 Provisi
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The objective of this Statement is
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settle the obligation; or ii. a rel
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17. Financial statements deal with
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may result in the recognition of in
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warranties). The other party may ei
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expenditures are recognised on the
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It does not form part of the Accoun
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paragraphs 14 and 21). Example 3: O
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2005, the enterprise's lawyers advi
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an onerous contract as a contract i
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Accounting Standards 1-29 - Seth & Associates

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