Accounting Standards: quick referencer for micro non-company
Accounting Standards: Quick Referencer for Micro Non-Company Entities
About the Accounting Standards Board:
The Institute of Chartered Accountants of India (ICAI) being the premier accounting body in the country had set up the Accounting Standards Board (ASB) on 21st April, 1977, with key objective of formulating Accounting Standards (AS/ASs) to harmonise varied accounting practices. ICAI, being the associate member of the International Accounting Standards Committee and full-fledged member of the International Federation of Accountants decided to consider the International Accounting Standards while formulating Accounting Standards and try to integrate them to the extent possible in the light of the local laws and regulations. Apart from playing sheet anchor role in standardsetting in the country, the ASB plays an active role in international standard – setting by participating in various international accounting forums.
The AS which at present are applicable to the entities not following Ind AS, are nearly more than 20 years old and many of them are more than 30 years old. Though these are well established in the country, in order to ensure that the ASs capture the contemporary business reporting needs and are in line with the economic developments of the country, the same need to be reviewed and revised from time to time. Further, our country’s economy has grown over the period of time and there are aspirations to become US$ 5 trillion economy in a few years. It is well recognised fact that Micro, Small and Medium Entities (MSMEs) have got a significant role to play in the economic growth and development of the country, which calls for sound financial reporting by such entities. Therefore, to meet the growing financial reporting needs of the MSMEs, these existing Accounting Standards are being revised considering the developments in financial reporting arena internationally. While doing so, considering these Accounting Standards would be applicable to Micro entities, there would be lesser use of fair values and time value of money and optimal disclosures would be required. Accordingly, certain Accounting Standards in their entirety and certain disclosure requirements have been exempted to Micro Non-Company entities.
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