accounting standards. Introduction to Accounting Standards

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Introduction to Accounting Standards
Accounting is the art of recording transactions in the best manner possible. Accounting Standards are the policy documents issued by recognized expert accountancy bodies relating to various aspects of measurement, treatment

and disclosure of accounting transactions and events. Every country has its own standards. Accounting Standards in India are issued by the Institute of Chartered Accountants of India (ICAI). At present there are 30 Accounting Standards issued by ICAI. As of 2010, the Institute of Chartered Accountants of India has issued 32 Accounting Standards. These are numbered AS-1 to AS-7 and AS-9 to AS-32 (AS-8 is no longer in force since it
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4. Cost Concept
This concept states that an asset is worth the price paid for or cost incurred to acquire it. Thus, assets are recorded at their original purchase price and this cost is the basis for all subsequent accounting for the assets. The assets shown on the financial statements do not necessarily indicate their present market worth. As such, there is no relationship between depreciation and changes in market value of the assets. The purpose of depreciation is to allocate the cost of an asset over its useful life and not to adjust its cost so as to bring it closer to the market value. 5. Accrual Concept
The accrual concept makes a distinction between the receipt of cash and the right to receive it, and the payment of cash and the legal obligation to pay it. In actual business operations, the obligation to pay and the actual movement of cash may not coincide. In connection with the sale of goods, revenue may be received (i) before the right to receive arises, or (ii) after the right to receive has been created. The accrual concept provides a guideline to the accountant as to how he should treat the cash receipt and the rights related thereto. In the former case the receipt will not be recognized as the revenue of the period for the reason that the right to receive the same has not yet arisen. In the latter case the revenue will be
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