Question

Procedure for setting accounting standards in india

Answer 1

Answer:

Formulation of Accounting Standards in India

Procedure for Formulation of Accounting Standards

Let us take a brief look at the procedure setting process that the ASB follows

First, the ASB will identify areas where the formulation of accounting standards may be needed

Then the ASB will constitute study groups and panels to discuss and study the topic at hand. Such panels will prepare a draft of the standards. The draft normally includes the definition of important terms, the objective of the standard, its scope, measurement principles and the representation of said data in the financial statements.

The ASB then carries out deliberations of the said draft of the standard. If necessary changes and revisions are made.

Then this preliminary draft is circulated to all concerned authorities. This will generally include the members of the ICAI, and any other concerned authority like the Department of Company Affairs (DCA), the SEBI, the CBDT, Standing Conference of Public Enterprises (SCPE), Comptroller and Auditor General of India etc. These members and departments are invited to give their comments.

Then the ASB arranges meetings with these representatives to discuss their views and concerns about the draft and its provisions

The exposure draft is then finalized and presented to the public for their review and comments

The comments by the public on the exposure draft will be reviewed. Then a final draft will be prepared for the review and consideration of the ICAI

The Council of the ICAI will then review and consider the final draft of the standard. If necessary they may suggest a few modifications.

Finally, the Accounting Standard is issued. In the case of standard for non-corporate entities, the ICAI will issue the standard. And if the relevant subject relates to a corporate entity the Central Government will issue the standard.

Answer 2

Procedure for setting accounting standards in India

Explanation:

In India ASB ( Accounting standard board)  is responsible is responsible for setting and formulating accounting standard. It follows following procedure-

• First of all it identifies the various segment of business which need accounting standard.
• then a panel is formulated to study the problem and make a draft containing various details.
• detailed study of the draft is then conducted so that modifications if needed are made.
• the draft is then circulated to concerned authority for approval.
• once it is approved then it is presented to the general public.
• if any objection is raised by public then further changes are made and final accounting standard is made.

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Procedure for setting accounting standards in India

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