ICSI Notifications on Companies Accounting Standards Rules 2006

by

Notifications on Companies (Accounting Standards) Rules 2006

Ministry of Company Affairs

NOTIFICATION

New Delhi, the 7th December, 2006

ACCOUNTING STANDARDS

G.S.R. 739 (E). – In exercise of the powers conferred by clause (a) of sub-section (1) of section 642 of the Companies Act, 1956 (1 of 1956), read with sub-section (3C) of section 211 and sub-section (1) of section 210A of the said Act, the Central Government, in consultation with National Advisory Committee on Accounting Standards, hereby makes the following rules, namely:-

  • Short title and commencement.-
    • These rules may be called the Companies (Accounting Standards) Rules, 2006.
    • They shall come into force on the date of their publication in the Official Gazette.
    • Definitions.- In these rules, unless the context otherwise requires,-
      • “Accounting Standards” means the Accounting Standards as specified in rule 3 of these rules;
      • “Act” means the Companies Act, 1956 (1 of 1956);
      • “Annexure” means an Annexure to these rules;
      • “General Purpose Financial Statements” include balance sheet, statement of profit and loss, cash flow statement (wherever applicable), and other statements and explanatory notes which form part thereof.
      • “Enterprise” means a company as defined in section 3 of the Companies Act, 1956.
      • “Small and Medium Sized Company” (SMC) means, a company-
        • whose equity or debt securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India;
        • which is not a bank, financial institution or an insurance company;
        • whose turnover (excluding other income) does not exceed rupees fifty crore in the immediately preceding accounting year;
        • which does not have borrowings (including public deposits) in excess of rupees ten crore at any time during the immediately preceding accounting year; and
        • which is not a holding or subsidiary company of a company which is not a small and medium-sized company.

Explanation: For the purposes of clause (f), a company shall qualify as a Small and Medium Sized Company, if the conditions mentioned therein are satisfied as at the end of the relevant accounting period.

(2) Words and expressions used herein and not defined in these rules but defined in the Act shall have the same meaning respectively assigned to them in the Act.

  • Accounting Standards.-
    • The Central Government hereby prescribes Accounting Standards 1 to 7 and 9 to 29 as recommended by the Institute of Chartered Accountants of India, which are specified in the Annexure to these rules.
    • The Accounting Standards shall come into effect in respect of accounting periods commencing on or after the publication of these Accounting Standards.

Obligation to comply with the Accounting Standards.-

  • Every company and its auditor(s)shall comply with the Accounting Standards in the manner specified in Annexure to these rules.
  • The Accounting Standards shall be applied in the preparation of General Purpose Financial Statements.
  • An existing company, which was previously not a Small and Medium Sized Company (SMC) and subsequently becomes an SMC, shall not be qualified for exemption or relaxation in respect of Accounting Standards available to an SMC until the company remains an SMC for two consecutive accounting periods.

[No. 1/3/2006/CL-V]

JITESH KHOSLA, Jt. Secy.

ANNEXURE

General Instructions

Accounting Standards

Leave a Comment