Accounting Standards (AS)
Standards provide the framework and norms to be followed in accounting so that
the financial statements of different enterprises become comparable. It is
necessary to standardise the accounting principles to ensure consistency,
comparability, adequacy and reliability of financial reporting.
In the words
of Kohler, “Accounting standards are codes of conduct imposed by customs, law
or professional bodies for the benefit of public accountants and accountants
Accounting Standards are written policy documents issued by the expert
accounting body or by government or other regulatory body covering the aspects
of recognition, measurement, treatment, presentation and disclosure of
accounting transactions and events in the financial statements.
The need for
accounting standards is as follows:
promote better understanding of financial statements
accountants to follow uniform procedures and practices
meaningful comparison of financial statements of two or more entities.
enhance reliability of financial statements
the legal requirements effectively