The Institute of Chartered Accountants of India (ICAI) being the premier accounting body in the country had set up the Accounting Standards Board (ASB) on 21st April, 1977, with key objective of formulating Accounting Standards to harmonise varied accounting policies. ICAI being the associate member of the International Accounting Standards Committee and full-fledged member of the International Federation of Accountants decided to consider the International Accounting Standards while formulating Accounting Standards and try to integrate them to the extent possible in the light of the local laws and regulations. Apart from playing sheet anchor role in standard-setting in the country, the ASB plays an active role in international standard-setting by participating in various international accounting forums.
The Accounting
The Accounting Standards which at present are applicable to the entities not following Ind AS, are nearly more than 20 years old. Though these are well
established in the country, in order to ensure that the Accounting Standards capture the contemporary business reporting needs and are in line with the
economic developments of the country, the same need to be reviewed and upgraded from time to time. Further, our country’s economy has grown over the
period of time and there are aspirations to become 5 trillion US$ economy in a few years. It is well recognized fact that Small and Medium Entities (SMEs) have
got a significant role to play in the economic growth and development of the country, which calls for sound financial reporting by such entities. Therefore, to
meet the growing financial reporting needs of the SMEs, these existing Accounting Standards are being upgraded considering the developments in
financial reporting arena internationally. While doing so, considering these Accounting Standards would be applicable to SMEs, there would be lesser use
of fair values and time value of money and optimal disclosures would be required.