Financial Reporting Major Issues - Series -1
Case 1: It was observed that the accounting policies were disclosed as: -"Intangible assets are recognized and accounted at cost in accordance with Accounting Standard 26 Intangible Assets" - "Deferred Tax Asset/Lability has been provided for in the books of accounts as per AS-22" Ans: Merely quoting Accounting Standard does not constitute Full disclosure of relevant policies. Accounting policies should be more explicit to help the readers to understand the Financial statements. Paragraph 11 of AS 1 describes the meaning of accounting policy as follows: The accounting policies refer to the specific accounting principles and the methods of applying those principles adopted by the enterprise in the preparation and presentation of financial statements Case 2: The abstract of the accounting policy adopted to determine the cost of inventories read as follows: " Work in Process at raw material cost ." Question: Whether the above accounting policy is ten