Accounting Standards 1-29 - Seth & Associates

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On 1-4-2003, the remaining period of amortisation is 2 years as per the accounting policy followed by the enterprise which is shorter as compared to the balance of amortisation period determined by applying paragraph 63, i.e., 5 years. Accordingly, the enterprise would be required to amortise the intangible item over the remaining 2 years as per the accounting policy followed by the enterprise Example 4 - Amortisation period determined under paragraph 63 has not expired and the remaining amortisation period as per the accounting policy followed by the enterprise is longer. An intangible item is appearing in the balance sheet of A Ltd. at Rs. 18 lakhs as on 1-4-2003. The item was acquired for Rs. 24 lakhs on April 1, 2000 and was available for use from that date. The enterprise has been following a policy of amortising the intangible item over a period of 12 years on straight-line basis. Applying paragraph 63, the enterprise determines that the item would have been amortised over a period of 10 years on straight line basis from the date when the item was available for use i.e., April 1, 2000. On 1-4-2003, the remaining period of amortisation is 9 years as per the accounting policy followed by the enterprise which is longer as compared to the balance of period stipulated in paragraph 63, i.e., 7 years. Accordingly, the enterprise would be required to restate the carrying amount of intangible item on 1-4-2003 at Rs. 16.8 lakhs (Rs. 24 lakhs - 3xRs. 2.4 lakhs, i.e., amortisation that would have been charged as per the Standard) and the difference of Rs. 1.2 lakhs (Rs. 18 lakhs-Rs. 16.8 lakhs) would be required to be adjusted against the opening balance of the revenue reserves. The carrying amount of Rs. 16.8 lakhs would be amortised over 7 years which is the balance of the amortisation period as per paragraph 63. Example 5 - Intangible Item is not amortised and amortisation period determined under paragraph 63 has not expired. An intangible item is appearing in the balance sheet of A Ltd. at Rs. 20 lakhs as on 1-4-2003. The item was acquired for Rs. 20 lakhs on April 1, 2000 and was available for use from that date. The enterprise has been following an accounting policy of not amortising the item. Applying paragraph 63, the enterprise determines that the item would have been amortised over a period of 10 years on straight line basis from the date when the item was available for use i.e., April 1, 2000. On 1-4-2003, the enterprise would be required to restate the carrying amount of intangible item at Rs. 14 lakhs (Rs. 20 lakhs - 3xRs. 2 lakhs, i.e., amortisation that would have been charged as per the Standard) and the difference of Rs. 6 lakhs (Rs. 20 lakhs-Rs. 14 lakhs) would be required to be adjusted against the opening balance of the revenue reserves. The carrying amount of Rs. 14 lakhs would be amortised over 7 years which is the balance of the amortisation period as per paragraph 63. Footnotes: 1 Attention is specifically drawn to paragraph 4.3 of the Preface, according to which accounting standards are intended to apply only to material items. 2 This implies that, while discharging their attest function, it will be the duty of the members of the Institute to examine whether this Accounting Standard is complied with in the presentation of financial statements covered by their audit. In the event of any deviation from this Accounting Standard, it will be their duty to make adequate disclosures in their audit reports so that the users of financial statements may be aware of such deviations. 3 A financial asset is any asset that is: a. cash; b. a contractual right to receive cash or another financial asset from another enterprise; c. a contractual right to exchange financial instruments with another enterprise under conditions that are potentially favourable; or d. an ownership interest in another enterprise. 4 A separate Accounting Standard on ‘Impairment of Assets’, which is being formulated, will specify the requirements relating to impairment of assets.
5 A separate Accounting Standard on ‘Impairment of Assets’, which is being formulated, will specify the requirements relating to impairment of assets. 6 A separate Accounting Standard on ‘Impairment of Assets’, which is being formulated, will specify the requirements relating to impairment of assets. 7 A separate Accounting Standard on ‘Impairment of Assets’, which is being formulated, will specify the requirements relating to impairment of assets. 8 A separate Accounting Standard on ‘Impairment of Assets’, which is being formulated, will specify the requirements relating to impairment of assets. 9 A separate Accounting Standard on ‘Impairment of Assets’, which is being formulated, will specify the requirements relating to impairment of assets. 10 A separate Accounting Standard on ‘Impairment of Assets’, which is being formulated, will specify the requirements relating to impairment of assets.
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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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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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orrowings made specifically for the
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Accounting Standard (AS) 17 Segment
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statement of profit and loss. Segme
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segments for internal financial rep
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24. Business and geographical segme
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calculation done in applying a part
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Secondary Segment Information 47. P
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segment, both primary and secondary
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REVENUE External sales Intersegment
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101 90 Assets and additions to tang
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and intangible fixed assets by loca
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4. In the context of this Statement
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(c) the director is nominated by th
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(iii) a description of the nature o
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1. upon the occurrence of some remo
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5. The classification of leases ado
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Rs.2,27,805. As this amount is lowe
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f. a general description of the les
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commencement of the lease term is t
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48. If a sale and leaseback transac
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AS 20 Earnings Per Share (In this A
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c. options including employee stock
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merger is the aggregate of the weig
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29. For the purpose of calculating
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41. Potential equity shares are ant
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Note: These appendices are illustra
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EPS for the year 20X0 as originally
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Convertible Preference Shares Incre
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(a) the ownership, directly or indi
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the consolidated financial statemen
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subsidiary and does not become an a
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Accounting Standard (AS) 22 ACCOUNT
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accounting purposes, straight line
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(a) has a legally enforceable right
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6. If for any reason the recognitio
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Deferred tax A/c Dr. 20,000 To Prof
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(b) the associate operates under se
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Disclosure 22. In addition to the d
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. that represents a separate major
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infrequently. All infrequently occu
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g. the amount of pre-tax profit or
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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
Page 260 and 261: 1. Basic Earnings Per Share 2.Dilut
Page 262 and 263: provisions for employees (b) Other
Page 264 and 265: (condensed or complete) for the fol
Page 266 and 267: 1st Quarter 2nd Quarter 3rd Quarter
Page 268 and 269: Accounting for the Effects of Chang
Page 270 and 271: a. intangible assets that are cover
Page 272 and 273: ecoverable amount.4 Carrying amount
Page 274 and 275: supportable assumptions that repres
Page 276 and 277: Therefore, in addition to complying
Page 278 and 279: titles, customer lists and items si
Page 280 and 281: Past Expenses not to be Recognised
Page 282 and 283: The enterprise amortises the right
Page 284 and 285: assets, how it determines the recov
Page 286 and 287: e. copyrights, and patents and othe
Page 288 and 289: Appendix A This Appendix, which is
Page 290 and 291: aforesaid and expensed in an earlie
Page 292 and 293: without physical substance held for
Page 294 and 295: Application and Infrastructure Deve
Page 298 and 299: Accounting Standard 27 Financial Re
Page 300 and 301: The arrangement identifies those de
Page 302 and 303: the assets; c. its share of any lia
Page 304 and 305: separately as part of the inventory
Page 306 and 307: 44 In case of transactions between
Page 308 and 309: Accounting Standard (AS) 28 Impairm
Page 310 and 311: 4. The following terms are used in
Page 312 and 313: e. evidence is available of obsoles
Page 314 and 315: 15. It is not always necessary to d
Page 316 and 317: ate can be justified. This growth r
Page 318 and 319: 38. A restructuring is a programme
Page 320 and 321: . the enterprise’s incremental bo
Page 322 and 323: generate cash inflows from continui
Page 324 and 325: determined excluding cash flows tha
Page 326 and 327: esult from synergy between the iden
Page 328 and 329: 88. In allocating an impairment los
Page 330 and 331: paragraphs 106 to 107 and for goodw
Page 332 and 333: 102. Any increase in the carrying a
Page 334 and 335: a. if the enterprise sells the disc
Page 336 and 337: ased on the enterprise’s primary
Page 338 and 339: EXAMPLE 3- EXAMPLE 4- EXAMPLE 5- EX
Page 340 and 341: determining value in use of both X
Page 342 and 343: Total 10,000 7,000 3,000 A24. T use
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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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