Application Chasm Of Accounting Standards in India

Dr Vijay H. Pithadia

Abstract

Accounting involving the wide range of Economic activity the importance of accounting standards deserves the value for h. Current practices of accounting standard shows gaps, •difference between actual and application i. e. wrong interpretation of words, not based on Indian environment, not consider Human resources Accounting method etc. The 10 standard out of 15 issued before 12 years and that time open market situation, Globalization environment mm not adopted while today after 1991 Globalization era creates more wider approach among the accounting practices. It should require reviewing all accounting standards as per new era of Globalization process. It should require high attention among them otherwise irreverence practices creates more wide gaps among Accounting Practices.

Introduction

Since Accounting involving the wide range of Economic activity the importance of accounting Al-standards deserves the value for it. At Global level there is 45 Accounting standards established by the International Accounting Standards Committee (IASC) while in India, ICAI given 15 accounting standards. Current practices of accounting standard shows gaps, indifference between actual and application i. e. wrong interpretation of words, not based on Indian environment, not consider Human resources accounting method etc. After Globalization process it should requires high attention among them otherwise irreverence practices creates more wide gaps among Accounting Practices. Harmonize with the government policy like income tax structure, Uniformity with Global to National level accounting standard because Growth of multinational co-operations mat is the enterprises of ownership, management, production and marketing extend over more than one country as in the case with general motors, ford motors, Unilever, Philips etc. Harmonize with social concerns and country environment traditions as well as Culture also important criteria. ICAI should take steps like Review of all Accounting standards with actual things.

Application Chasm of Accounting Standards

IASC issued 45 accounting standard while ICAI issued only 15 accounting standard and therefore uniformity according to international standard not serve the actual purpose. Suppose X Multinational firm adopting Y accounting standard but it may not include in Indian accounting standard and creates problem for Assessment and therefore review of accounting standard may essential in the current phenomena. The 10 standard out of 15 issued before 12 years and that time open market situation, Globalization environment not adopted while today after 1991 Globalization era creates more wider approach among the accounting practices. It should requires to review all accounting standards as per new era of Globalization

Another Gap is wrong interpretations of words i. e. Revenue, Income, Profit, Interest etc. Average Revenue concepts applied e. g. if total revenue is Rs. 1000 and the Number of units of output is 100, then average Revenue is Rs. 10, but wrong Interpretation of number of units suppose 50, then average Revenue indicates Rs. 20 , thus wrong Interpretation shows different Average Revenue is Rs. 10 to Rs. 20. It should be minimizing with the accounting standards. Thirdly accounting standard in India not based on the Indian culture, Environment It might be adopted as per western accounting standard and those might be Related to effective in Western Part of country because it may’ consider "fibuse"cu1nlre.! "Environment etc. and works effectively. Indian accounting standard committee requires to keep cultural things in the accounting standard while review of all accounting standard.

Fourth Gaps is current accounting standard not consider Human Resources accounting (HRA) methods. While some multinational company run with it. Human Resource accounting would perhaps be the effective key to initiate charges to face the challenge. HRA through gets benefits likely to be derived should exceed the cost to be incurred for any viable decision. The different models have been advocated by the pioneers in the field of HRA, some of them are cost based, following historical, Replacement or opportunity cost principle some are based on economic principles of value while other are based on psycho - social measures of organizational HR. Accounting standard not consider the HRA and therefore above provisions of HRA not serve for the purpose. It should requires Involvement of HRA in tune with the retirement schedule, provisions for likely exit due to death, usual increment in wages overtime, future wage revision,

Conclusion

Application chasm of accounting standard in Indiabecomes wider after adopting new global phenomena. Current practices of accounting standard shows gaps, indifference between actual and application i. e. wrong interpretation of words, not based on Indian environment, not consider Human resources accounting method etc. After Globalization process it should requires high attention among them otherwise irreverence practices creates more wide gaps among Accounting Practices.

Bibliography

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