STATUS OF ACCOUNTING STANDARDS

STATUS OF ACCOUNTING STANDARDS

• It has already been mentioned that the Accounting Standards are developed by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India and are issued under the authority of its Council.
•  The Institute not being a legislative body can enforce compliance with its standards only by its members. Also, the standards cannot override laws and local regulations. The Accounting Standards are nevertheless made mandatory from the dates specified in respective standards and are generally applicable to all enterprises, subject to certain exception as stated below. 
• The implication of mandatory status of an Accounting Standard depends on whether the statute governing the enterprise concerned requires compliance with the Accounting Standards. The Companies Act had earlier notified 28 accounting standards and mandated the corporate entities to comply with the provisions stated therein. 
• However, in 2016 the MCA has withdrawn AS 6. Hence, effectively there are now only 27 notified Accounting Standards as per the Companies (Accounting Standards) Rules, 2006 (as amended in 2016).