ICDS I- Relating to Accounting Policies (corresponding to AS-1) CBDT’s Revised “Income Computation and Disclosure Standard I (ICDS 1)” relating to accounting policies applicable from the AY 2017-18 (corresponding to AS-1 issued by the ICAI)Preamble:This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts.In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.Scope:
Fundamental Accounting Assumptions:
(a) Going Concern:“Going concern” refers to the assumption that the person has neither the intention nor the necessity of liquidation or of curtailing materially the scale of the business, profession or vocation and intends to continue his business, profession or vocation for the foreseeable future.(b) Consistency:“Consistency” refers to the assumption that accounting policies are consistent from one period to another;(c) Accrual:“Accrual” refers to the assumption that revenues and costs are accrued, that is, recognised as they are earned or incurred (and not as money is received or paid) and recorded in the previous year to which they relate.Accounting Policies:
Considerations in the Selection and Change of Accounting Policies:
(i) the treatment and presentation of transactions and events shall be governed by their substance and not merely by the legal form; and(ii) marked to market loss or an expected loss shall not be recognised unless the recognition of such loss is in accordance with the provisions of any other Income Computation and Disclosure Standard.
Disclosure of Accounting Policies:
Transitional Provisions:10. All contract or transaction existing on the 1st day of April, 2016 or entered into on or after the 1st day of April, 2016 shall be dealt with in accordance with the provisions of this standard after taking into account the income, expense or loss, if any, recognised in respect of the said contract or transaction for the previous year ending on or before the 31.03.16 |