The Indian Accounting Standards are broadly divided into 29 categories. Students, now we discuss the Accounting Standards. So aspirants Accounting Standards one of the Most important Topic to cover the Finance Accounts. Now we discuss the Accounting Standards 4 ( Contingencies and Events Occurring after the Balance sheet Date). The Accounting Standard 4 is discussed Below They are
- Events Occurring After the Balance Sheet Date.
Accounting Standard AS 4
Contingencies:– The Contingent is a condition or Situation the ultimate outcomes of the gain or loss only the occurrence or Non Occurrence of Future Uncertain Event.
Events Occurring the After the Balance Sheet Date:– The Both favorable and unfavorable that occurs between the balance sheet date and the date on which the financial statements are approved by the board of Directors in the case of a company and by the corresponding approving authority in the case of any other entity.
Accounting Standard AS 4 Amendments ICAI
Two Types of Events can Be Identified:-
- Provide Further Evidence of Conditions that Existed at the Balance Sheet date and
- Which are Indicative of Condition that arises sequent to the balance sheet date.
Events Occurring After the Balance Sheet Date:- Transaction is the Financial Events. It is obvious that all the Financial Events up to the Balance Sheet date should be taken into Consideration in preparation of Financial Statements for an Accounting Period.
The Events Occurring After the Balance Sheet can be Reported Either by
- Making appropriate adjustments in the financial statements or
- Through the report of the approving authority in case of other entities.
- An event occurring after the balance sheet may require adjustment of reported values of assets, liability, expenses, income, and equity for the accounting period. If the event is such as to provide further evidence of conditions that existed at the balance sheet date. Such Events are adjusting events.
- For Example, If a Fraud during the accounting period is detected after the balance sheet date but before approval of the financial statement, it is necessary to recognize the loss and change reported values concerned elements of financial statement.
- The Disclosure requirements herein Referred to apply only in respect of those Contingencies or Events which affect the financial position to a material Extent.
- If a contingent loss is not provided for its nature and an estimate of its financial effect are approving authority. The information given comprises the nature of the events and an estimate of their financial effects or a statement that such an estimate cannot be made.