Advanced Accounting - Intermediate Paper One

Overview

• Instructor: CA Asha, Board of Studies
• Faculty: CA Sangeet Shah (Accounting Standards Sessions)
• Examination: May 2024 (new scheme by ICAI)
• Language: Concepts in English, revision in Hindi

Introduction to Advanced Accounting

• Purpose: Understanding and applying accounting standards
• Core Focus: Accounting standards and corporate accounting concepts
• Key Components:
  • Journal Entries
  • Ledger Accounts
  • Trial Balance
  • P&L (Profit and Loss)
  • Balance Sheet

Syllabus Overview

• Disclosure-Based Accounting Standards: 7 standards
• Asset-Based Accounting Standards: 7 standards
• Liability-Based Accounting Standards: 2 standards
• Impact on Financial Statement: 4 standards
• Revenue-Based Accounting Standards: 2 standards
• Other (Residual Category): 2 standards
• Consolidated Financial Statements: 3 standards
• Small Topics:
  • Introduction to Accounting Standards
  • Framework for Preparation of Financial Statements
  • Applicability of Accounting Standards
  • Buyback
• Big Topics:
  • Cash Flow Statement
  • Balance Sheet Proforma
  • Amalgamation of Company
  • Reconstruction of Company
  • Accounting for Branches (including foreign branch)

Learning Objectives

• Understanding: Accounting standards, their applicability and mandate
• Skills: Apply standards to transactions/events and understand financial statement presentation

Key Concepts

• Recognition, Measurement, Presentation, and Disclosures (RMPD) Analysis
• Benefits of Accounting Standards:
  • Standardization of principles
  • Requirement for additional disclosures
  • Comparability of financial statements
  • Reduction of Creative Accounting

Standard Setting Process

1. Identify Area: Need for a new or revised standard
2. Constitute Study Group: Expert opinions and drafting
3. Exposure Draft: Open for public comments
4. Modify Draft: Based on feedback
5. Issue Standard: Finalizing and issuing by accounting bodies
6. Regulatory Bodies:

• ICAI (Institute of Chartered Accountants of India)
  • MCA (Ministry of Corporate Affairs)
  • NAFRA (National Financial Reporting Authority)

Global Standard Convergence

• Need for Global Standards:
  • Standard comparability globally
  • Encouraging cross-border investments
  • Resolving multiplicity and confusion
• Types of Compliance:
  • Adoption: Purely following IFRS
  • Convergence: Adjusting IFRS to local needs (India follows this)

IFRS (International Financial Reporting Standards)

• Issued by: IASB (International Accounting Standards Board)
• Components: Standards and interpretations
• Evolution: From IAS (International Accounting Standards) to IFRS
• Indian Context: InD AS
  • Comparable to both IAS and IFRS
  • Hierarchy: IFRS 1 (one) equals InD AS 101
• Benefits:
  • Enhanced transparency and accountability
  • Comparability in global markets
  • Facilitates international listings

Other Key Points

• Indices in India: Different standards for large (InD AS) and small companies (Accounting Standards)
• Future Sessions: More on specific standards, practical applications, and detailed examples

Quick Tasks

• Maintain 100 Pages Book: Summarize key points and examples from lectures
• Review Material: Study and understand from ICAI study material
• Practice: Regular question-solving and revision using tick-ticking technique

Summary

• Total Covered: InD AS, IFRS, Accounting Standards, Benefits, Convergence, Standard Setting Process
• Next Session: Detailed standards, practical illustrations, continued learning journey

Remember, consistent effort and understanding of concepts through regular revision and practice are key to succeeding in the Advanced Accounting paper. Good luck!