Accounting Standard as Per Companies Act 2013

Setindiabiz TeamOctober 15, 2024

Overview: The financial statement of a company is an important set of documents that outline a company’s financial health at a specific point of time. Therefore, while preparation of these documents certain prescribed accounting standards need to be followed. These accounting standards apply to all companies registered in India regardless of their size and type. Learn more about accounting standards in India as per Companies Act 2013.

The financial statement of the company is required to be prepared in compliance with the accounting standards issued by the central government and as per schedule III of the act. Section 133 prescribes that the central government on the recommendation of the Institute of chartered accountants of India and in consultation with the National Financial Reporting Authority (NFRA) may prescribe the accounting standards.

The standards are a set of rules and guidelines issued for preparation of uniform and consistent financial statement. This also prescribes necessary disclosures to be made while preparing the financial statements. The objective of the accounting standards are to prescribe requirements for recognition of financial information, the methods of its measurements and its presentation and disclosure required concerning monetary transactions

The accounting standards apply to all companies irrespective of its size and type. The statutory auditor of the company is under a statutory duty to report any variance from the prescribed accounting standards. While recording the transactions of financial nature in the books of account the accountant or the bookkeeper must follow the rules in word and spirit.

Most of us are aware of the importance of financial statements for a business. Similar to other compliance, there are stipulated standards that need to be followed while preparation of financial statements. Section 133 prescribes that the central government on the recommendation of ICAI shall prescribe standards for accounting of businesses. Get detailed information on accounting standards explained in the above blog.

Conclusion

Accounting Standard as Per Companies Act 2013

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