This
article highlights various accounting standards and
their compliance in the Indian banking system. These
accounting standards rule the criteria for accounts
measurement, where to a great extent, they created uniformity
in reporting and analyzing with reasonable flexibility
by considering various circumstances of different enterprises.
The focus is on AS-5, AS-9, AS-15, AS-17, AS-18, AS-22,
AS-23, AS-25 and AS-27.
Accounting
has been defined in multivarious dimensions. The most
lucid among them is "the art of recording, classifying
and summarizing in a significant manner and in terms
of money, transactions and events which are, in part
at least, of financial character and interpreting the
results thereof." In the evolutionary plane the
accounting system has been refined from time to time
and has traversed a long journey. The divergences and
dichotomy in interpretations have led to the idea of
accounting standards so that stake holders can compare
and analyze financial data of different organizations
to make financial investment decisions. Thus, accounting
standards have led to burying hatchets and accounting
system has been streamlined. They have provided valuable
direction in the field of accounting and have brought
about qualitative improvement in financial reporting.
The accounting standards have laid down rules and criteria
for accounting measurement and have been capable to
a great extent in bringing uniformity in accounting
practices with a reasonable degree of flexibility, taking
into cognizance the differences in circumstances of
various enterprises.
Institute
of Chartered Accountants in England began making the
accounting standards prescription since 1942. The Accounting
Statements Committee (ASC) was framed in 1969 to further
this prescription. In USA, the need for evolving accounting
standards was felt in the year 1933 with the establishment
of the Securities Exchange Commission (SEC). A research-oriented
organization called the Accounting Principles Board
(APB) was formed in 1957 to spell out fundamental accounting
postulates. FASB, which was established in 1973, pronounces
GAAP and has issued around 100 financial accounting
standards. |
