Course Content
Accounting Principles and Standards, Preparation of Financial Statements
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Accounting Concepts and Principles: Theoretical Framework
Accounting Standards : IFRS, IAS & GAAP
Responsibilities of IASB
Indian Accounting Standards (Ind AS)
Types of Account
Types of Expenditure
Financial Statement Analysis: Ratio Analysis, Funds Flow and Cash Flow Analysis, DuPont Analysis
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Financial Statements List
Important Terms
Ratio Analysis
Funds Flow Analysis
Flow of Funds
Cash Flow Analysis
Ind AS 7: Cash Flow Statement
DuPont Analysis
Preparation of Cost Sheet, Marginal Costing, Cost-Volume Profit Analysis
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Important Principles in Cost Accounting
Implicit Cost & Explicit Cost; Accounting Profit & Economic Profit
Law of Diminishing Returns
Economic Theory of Production
Production Theory in Micro Economics
Special Types of Costs
Cost Theory in Economics
Short-Run Costs in Perfect Competition
Marginal Revenue & Profit Maximizing Rule
Shutdown Rule in Short Run
Short Run in Monopoly
Preparation of Cost Sheet
Fixed Costs (F.C.) , Variables Costs ( V.C.) and Contribution Margin
P/V ratio ( Profit / Volume ratio)
Break Even Point (B.E.P.) & Margin of Safety (M.O.S.) & Law of Diminishing Return
Cost-Volume Profit Analysis
Standard Costing & Variance Analysis
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Inventory Valuation Method
Standard Costing
Material Variance
Volume Variance
Overhead Absorption Rate
Overhead Expenditure Variance
Variable Overhead Cost Variance
Overhead Spending Variance
Labour Efficiency Variance
Unit IV: Managerial Accounting

✅ What are Indian Accounting Standards (Ind AS)?

Indian Accounting Standards (Ind AS) are a set of accounting principles and guidelines notified by the Ministry of Corporate Affairs (MCA), Government of India. They are converged with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), ensuring global comparability of financial statements prepared by Indian entities.

These standards guide companies on recognition, measurement, presentation, and disclosure of transactions and events in financial statements.

✅ Scope & Applicability

Ind AS is mandatory for:

🔹 Phase 1: From 1st April 2016

  • Listed or unlisted companies with net worth ≥ ₹500 crore

🔹 Phase 2: From 1st April 2017

  • Listed companies or those in process of listing

  • Unlisted companies with net worth ≥ ₹250 crore but < ₹500 crore

🔹 Voluntary Adoption:

Any company (except banks, insurance, NBFCs initially) could voluntarily adopt Ind AS with MCA approval.

🔹 For NBFCs, Banks, and Insurance Companies:

A separate roadmap was issued with delayed implementation.

✅ Key Features of Ind AS

Feature Description
Principle-Based Focuses on substance over legal form.
Fair Value Measurement Assets and liabilities are often measured at fair value rather than historical cost.
Component Accounting Different parts of a fixed asset are depreciated separately.
Substance Over Form Transactions are recorded based on economic reality.
Consolidated Financial Statements (CFS) Mandatory for companies having subsidiaries.
Emphasis on Disclosures More extensive and detailed disclosures required.

✅ List of Major Ind AS

There are currently 41 notified Ind AS, some of the most important include:

Ind AS No. Title
Ind AS 1 Presentation of Financial Statements
Ind AS 2 Valuation of Inventories
Ind AS 3 Cash Flow Statements (replaced by Ind AS 7)
Ind AS 7 Statement of Cash Flows
Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors
Ind AS 9 Revenue Recognition (replaced by Ind AS 115)
Ind AS 11 Construction Contracts (now merged with Ind AS 115)
Ind AS 12 Income Taxes
Ind AS 16 Property, Plant and Equipment
Ind AS 18 Revenue (replaced by Ind AS 115)
Ind AS 21 Effects of Changes in Foreign Exchange Rates
Ind AS 23 Borrowing Cost
Ind AS 24 Related Party Disclosures
Ind AS 33 Earnings Per Share
Ind AS 38 Intangible Assets
Ind AS 110 Consolidated Financial Statements
Ind AS 115 Revenue from Contracts with Customers

Note: Ind AS 115 and 116 are aligned with IFRS 15 and IFRS 16 respectively.

✅ Comparison: Ind AS vs. Indian GAAP

Basis Indian GAAP Ind AS
Approach Rule-based Principle-based (IFRS aligned)
Fair Value Concept Limited Widely used
Consolidation Optional for unlisted Mandatory if subsidiaries exist
Disclosures Less detailed Highly detailed
Global Acceptance Low High

✅ Benefits of Ind AS

  • Enhances credibility and reliability of financial statements.

  • Facilitates cross-border investment and financing.

  • Makes Indian entities more attractive to foreign investors and MNCs.

  • Ensures compliance with global practices, aiding in mergers, acquisitions, and joint ventures.

❗ Challenges in Implementation

  • Requires significant training and awareness.

  • Transition from historical cost to fair value-based reporting is complex.

  • May lead to volatility in profits due to revaluation and fair value adjustments.

  • High cost of systems and software upgrades.

✅ Real-World Application Example

Suppose a company owns a building purchased 10 years ago for ₹5 crore.
Under Indian GAAP, it would be shown at depreciated historical cost.
Under Ind AS, it may be shown at fair market value, say ₹10 crore, providing more relevant information to users.

✅ Conclusion

Indian Accounting Standards (Ind AS) mark a significant shift in India’s accounting landscape, ensuring global consistency, better transparency, and investor confidence. Though implementation demands effort, the long-term benefits for businesses and the economy are substantial.

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