Autobiography meaning and definition of accounting standards

Read this article to learn about the concept, meaning, nature and objectives of accounting standards.

Concept of Accounting Standards:

We know that Generally Accepted Accounting Principles (GAAP) aims at bringing uniformity and comparability in the financial statements.

It can be seen that at many places, GAAP permits a variety of alternative accounting treatments for the same item.

Autobiography meaning and definition of accounting standards

For example, different methods for valuation of stock give different results in financial statements.

Such practices sometimes can misguide intended users in taking decision relating to their field. Keeping in view the problems faced by many users of accounting, a need for the development of common accounting standards was aroused.

For this purpose, the Institute of Chartered Accountants of India (ICAI), which is also a member of International Accounting Standards Committee (IASC), had constituted Accounting Standard Board (ASB) in