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Home / Financial Reporting & Accounting Financial Reporting & Accounting
Source of Accounting Principles National Advisory Committee on Accounting Standards issues the accounting standards to be followed by enterprises. All accounting standards issued up to the date are mandatory and companies are required to comply with these standards and disclose significant accounting policies in preparation of their financial statement. The Institute of Chartered Accountant of India issues guidance notes and auditing standards, designed primarily to guide auditors during the course of their professional work. Indian accounting standards have been sourced from International financial Reporting Standards (IFRS) but there are several difference between Indian accounting standards and IFRS. Statues/Bodies governing the accounting reporting requirement National Advisory Committee on Accounting Standards, The Companies Act, 1956 and the Income Tax Act 1961 governs the financial reporting requirement of companies. Method of Accounting The fundamental accounting assumptions of going concern consistency and accrual of income and expenses need not be disclosed in the financial statements, departures from these basic concepts however must be disclosed. The books of accounts are maintained according to the double entry system. Fiscal Period The fiscal period which is generally followed both under the Companies Act, 1956 and the Income Tax Act 1961 is 1st April-31st March every year. Companies have the option to change their fiscal period as per their need but the fiscal period cannot be more than 18 months.
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