Accounting Standard 9 ( AS 9 )
Revenue recognition
Accounting standard of India explains the concept of revenue deeply. When goods are sold or services rendered. At this time it is deemed that money is earned by enterprise. There is also revenue from interest, royalty and dividend. Revenue recognition standard comprises different earning relating to advertising and other services projects when these are completed by professionals. But this standard also provides guidance about revenue recognition in following cases.
Accounting Standard 10 (AS 10 )
(Accounting of fixed assets)
Accounting standard 10 of ICAI helps professional accountants for proper accounting treatment of fixed assets.
Determination of cost of fixed assets
Assets purchase value + all cost to bring the fixed assets to plant.
New extension of fixed assets
Any new extensions are capital nature expenditure and it will include in the total value of respective fixed assets.
Goodwill is also treated as fixed asset in balance sheet if the amount is for this paid. In fixed assets, Enterprise will also include the amount of know how and patents.
Accounting standard 11 ( AS 11 )
Effect of changes of foreign exchange rates
There are two main reasons for providing effect of changes of foreign exchange rates on accounting.
Calculate the value of foreign exchange profit or loss
It is very simple when any transaction is done, this date is called closing date and we can calculate foreign exchange profit or loss on the basis of exchange rate. If it is rated to purchasing or selling related profit from foreign exchange currency. Then it will show as capital reserve. Otherwise it is revenue earning and it will transfer to profit and loss account.
Accounting standard 12 (AS 12)
(Accounting treatment of Govt. grants)
The Govt. grant means any benefit given by govt. in the form of subsidy, reduction in duty and taxes and other non monetary help . Accounting standard accepts two way for providing accounting treatment of govt. grants. If it is received by any special enterprise.
First way
To show as capital earning and include it in the value of shareholder fund in liability side of balance sheet and also shown in bank in current assets side .
2nd Way
Transfer all govt. grants to the credit side of profit and loss account
Related: Accounting Standards in India – Simple Explanation - Part one (AS 1 to AS 4 )
Accounting Standards in India - Simple explanation ( AS 5 to AS 8 ) Part second
Revenue recognition
Accounting standard of India explains the concept of revenue deeply. When goods are sold or services rendered. At this time it is deemed that money is earned by enterprise. There is also revenue from interest, royalty and dividend. Revenue recognition standard comprises different earning relating to advertising and other services projects when these are completed by professionals. But this standard also provides guidance about revenue recognition in following cases.
- If stock is sold on approval basis then, revenue is generated only when the buyer gives the approval.
- In case of agency business revenue will be recognized when risk of ownership also transferred under consignment.
Accounting Standard 10 (AS 10 )
(Accounting of fixed assets)
Accounting standard 10 of ICAI helps professional accountants for proper accounting treatment of fixed assets.
Determination of cost of fixed assets
Assets purchase value + all cost to bring the fixed assets to plant.
New extension of fixed assets
Any new extensions are capital nature expenditure and it will include in the total value of respective fixed assets.
Goodwill is also treated as fixed asset in balance sheet if the amount is for this paid. In fixed assets, Enterprise will also include the amount of know how and patents.
Accounting standard 11 ( AS 11 )
Effect of changes of foreign exchange rates
There are two main reasons for providing effect of changes of foreign exchange rates on accounting.
- When goods are sold or buy in price which is dominated in foreign currency.
- When enterprise is doing any foreign operations.
Calculate the value of foreign exchange profit or loss
It is very simple when any transaction is done, this date is called closing date and we can calculate foreign exchange profit or loss on the basis of exchange rate. If it is rated to purchasing or selling related profit from foreign exchange currency. Then it will show as capital reserve. Otherwise it is revenue earning and it will transfer to profit and loss account.
Accounting standard 12 (AS 12)
(Accounting treatment of Govt. grants)
The Govt. grant means any benefit given by govt. in the form of subsidy, reduction in duty and taxes and other non monetary help . Accounting standard accepts two way for providing accounting treatment of govt. grants. If it is received by any special enterprise.
First way
To show as capital earning and include it in the value of shareholder fund in liability side of balance sheet and also shown in bank in current assets side .
2nd Way
Transfer all govt. grants to the credit side of profit and loss account
Related: Accounting Standards in India – Simple Explanation - Part one (AS 1 to AS 4 )
Accounting Standards in India - Simple explanation ( AS 5 to AS 8 ) Part second
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