Page 15 - IC26 LIFE INSURANCE FINANCE
P. 15
UNIT 4: ACCOUNTING POLICIES
Meaning : Accounting policies refer to specific accounting principles and methods of
applying these principles adopted by the enterprise in the preparation and presentation of
financial statements.
The areas where in different accounting policies are frequently encountered can be given as
(1) Methods of depreciation, depletion and Amortization
(2) Valuation of inventories
(3) Treatment of goodwill
(4) Valuation of investments
(5) Valuation of fixed assets
The Accounting Policy can be selected on the following basis :
(1) Prudence
(2) Substance over form
(3) Materiality
Change in Accounting Policies
A change in accounting policies should be made in the following conditions:
(1) It is required by some statute or for compliance with an accounting standard.
(2) Change would result in more appropriate presentation of financial statements.
Sashi Publications Pvt Ltd Call 8443808873/ 8232083010
