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Accounting Standards and International Financial Reporting Standards (IFRS) — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountAccounting Standards and International Financial Reporting Standards (IFRS)6 Marks
Question
Define Accounting Standards. What are their main objectives?
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Answer

Accounting Standards are a set of guidelines, i.e., Generally Accepted Accounting Principles, that are followed for preparation and presentation of Financial Statements. They are accounting rules and procedures relating to measurement, recognition, treatment, presentation and disclosure of accounting transactions in the financial statements issued by the Council of the Institute of Chartered Accountants of India. Objectives of Accounting Standards are:
  1. Minimise the diverse accounting policies and practices with the aim to eliminate them to the extent possible.
  2. Promote better understanding of financial statements.
  3. Understand significant Accounting Policies adopted and applied.
  4. Facilitating meaningful comparison of financial statements of two or more entities.
  5. Enhancing reliability of financial statements.

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