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AS – 1




     Objective:  -

This accounting standard is to facilitate better understanding of financial statements and meaningful comparison between financial statements of different enterprises.

Scope:  The transactions for which different accounting policies can be adopted by different companies. These are some examples only:

Treatment of Goodwill

Valuation of Inventories                             

Valuation of Investments

Valuation of Fixed Assets

Methods of Depreciation

Treatment of retirement benefits

Treatment of Contingent Liabilities




 Means Specific accounting principles & methods of applying those principles adopted by the enterprises in preparation of financial statements.


  Presentation and disclosure requirements:


ü     All significant accounting policies adopted should be disclosed.

      The disclosure should form part of the financial statements.


ü     Any change in the accounting policies which has a material effect in the current period should be disclosed along with amount of effect.


ü     If the fundamental accounting assumptions are not followed, the fact should be disclosed.


Fundamental accounting assumptions:

The accounting assumptions are as follows:

1.     Going concern

2.     Consistency

3.     Accrual





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