Main A common set of Accounting Standards and Procedures
The Conceptual Framework of Financial Reporting under the standards of Indian Accounting describes the objective and the concepts and general purpose of financial reporting.
Below mentioned few points explains A common set of accounting standards and procedures are called
- Provides assistance to the Institute of Chartered Accountants of India (ICAI) for formulating the Indian Accounting Standards (Ind ASs) that are having base on various consistent concepts.
- Provides assistance to the preparers for developing consistent accounting policies when there is no application of Ind AS to a particular transaction or some other event, or when an Ind AS is allowed to make a choice of policy in accounting policies.
- Provides assistance to all the parties for understanding and interpreting the Indian Accounting Standards (Ind Ass).
The theory of Conceptual Framework is not considered as a part of Ind AS. Nothing in the Conceptual Framework can override any concept of Ind AS or any of its requirements in an Ind AS.
For meeting the objectives of general purposes of financial reporting, the Institute of Chartered Accountant of India (ICAI) sometimes might specify requirements that is departing from various aspects of the Conceptual Framework. In case, if ICAI is doing so, then it would be explaining the departure in the Appendix for the relevance of the Ind AS.
The revision of Conceptual Framework may be done from time to time on the basis of working experience of the ICAI and several other international developments in this regard. Leading towards the changes of the Ind ASs will not be done automatically by the revisions of the Conceptual Framework. Any decision for the amendment of an Ind AS would be requiring the Institute of Chartered Accountant of India (ICAI) for going through its due process for the formulation of an amendment to that of Ind AS.
The Conceptual Framework also contributes for the mission of the ICAI for formulate the Ind ASs that will bring efficiency, accountability and transparency to the markets of finance. The ICAI’s accounting standards of ICAI’s formulation relates to the work which would be serving the public interest by growth, long-term financial stability and fostering trust in the global economy.
Below points are mentioned for better understanding for the A common set of Accounting Standards and Procedures are called for providing the foundation for Ind ASs:
- Contribution to the transparency by the enhancement of the international comparability and maintaining the quality of the financial information which will enable the investors and several other market participants for making informative economic decisions.
- Strength of accountability can be increased by reducing the gap of information between the people to whom they have entrusted their money and the providers of capital. Ind ASs are based on the Conceptual Framework which is providing an information which is needed for holding the management for accounting. As an origin of the information which is globally comparable, those Ind ASs can be also an essential importance for the regulators.
- Contribution to the economic efficiency can help investors in identifying the opportunities and also various risks across the globe, thus it results in improving the allocation of capital. The use of a trusted, single accounting language for several businesses can be derived from the Ind ASs which is based on the Conceptual Framework which will lower the cost of capital and also reduces the costs of international reportings.
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