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BRILLIANT’S Accounting Standards 49

Scope: This standard is applied in joÌ… `h ñQ>¢S>S>© {ZåZ{b{IV H$mo N>mo‹S>H$a g^r
accounting for all inventories except for: B§doÝQ>arO Ho$ {bE AH$mC§qQ>J _§o bmJy hmoVm h¡…
(a) WIP (Work In Progress), arising under (a) H§$ñQ´>ŠeZ H$m°ÝQ´>¡³Q²>g Ho$ A§VJ©V CËnÝZ hmoZo dmbo
construction contracts. WIP (dH©$ BZ àmoJ«og)
(b) WIP (Work In Progress), arising in the (b) g{d©g àmodmBS>g© Ho$ ì`mnma Ho$ gm_mÝ` g§MmbZ _|
ordinary course of business of service CËnÝZ WIP (dH©$ BZ àmoJ«og)
providers.

(c) Shares, debentures and any other financial (c) ñQ>m°H$-BZ-Q´>oS> _| aIo eo`g©, {S>~|Mg© VWm H$moB©
instruments held as stock-in-trade. AÝ` \$m`Z|{e`b B§ñQ¯>_§oQ²>g
(d) Agricultural and forest products, mineral (d) H¥${f VWm dZmonO, I{ZO Vob, bm¡h A`ñH$, J¡g,
oils, ores, gases, live stock.
newYZ&
AS-3: Cash Flow Statement AS-3: H¡$e âbmo ñQ>oQ>_|Q>
The standard is concerned with the `h ñQ>¡ÝS>S>© EH$ H¡$e âbmo ñQ>oQ>_|Q> Ho$ _mÜ`_ go EH$
provision of information about the historical à{Vð>mZ Ho$ H¡$e VWm H¡$e Bp³ddob|Q²>g _| Eo{Vhm{gH$
changes in cash and cash equivalents of an
enterprise by means of a cash flow statement. n[adV©Zm| Ho$ ~mao _| gyMZm Ho$ àmdYmZ go g§~§{YV h¡&
The objective and scope of the standard ñQ>¢S>S>© Ho$ CÔoí` VWm joÌ {ZåZ{b{IV h¢…
are as under:
Objective: The objective of this standard CÔoí`… Bg ñQ>¢S>S>© H$m CÔoí` H¡$e CËnÝZ H$aZo VWm
is to assess the ability of the enterprise to H¡$e H$m Cn`moJ H$aZo H$s `mo½`Vm H$m AmH$bZ H$aZm,
generate cash and to utilize the cash, also to act
as a tool for assessing the liquidity and solvency à{Vð>mZ H$s {bpŠd{S>Q>r VWm gm°ëd|gr H$m AmH$bZ H$aZo
of the enterprise. Ho$ {bE EH$ gmYZ Ho$ ê$n _| H$m`© H$aZm h¡&
Scope: An enterprise should prepare a joÌ… EH$ à{Vð>mZ H$mo EH$ H¡$e âbmo ñQ>oQ>_|Q> V¡`ma H$aZm
cash flow statement and should present it for Mm{hE VWm àË`oH$ Ad{Y Ho$ {bE àñVwV {H$`m OmZm Mm{hE
each period for which financial statements are
presented. {OgHo$ {bE \$m`Z|{e`b ñQ>oQ>_|Q²>g àñVwV {H$`o J`o h¢&
AS-4: Contingencies and Events Occur- AS-4: ~¡b|g erQ> H$s {XZm§H$ Ho$ níMmV² hmoZo dmbr
ring after the Balance Sheet Date
H§$qQ>O|grO VWm KQ>ZmE±
In preparing financial statement of a EH$ {deof à{Vð>mZ Ho$ \$m`Z|{e`b ñQ>oQ>_|Q> V¡`ma
particular enterprise, accounting is done by H$aZo _| df© Ho$ bm^ VWm hm{Z H$s JUZm H$aZo VWm ~¡b|g
following accrual and prudent basis of erQ> _| AgoQ> VWm bm`{~{bQ>rO H$mo _mÝ`Vm XoZo Ho$ {bE
accounting policies to calculate P&L for the year AH$mC§qQ>J Zr{V`m| Ho$ EH«y$Ab VWm àyS>|Q> AmYma na
and to recognize asset and liabilities in the B/S.
While following the prudent accounting {ZåZ{b{IV Ûmam AH$mC§qQ>J H$s OmVr h¡& àyS>|Q> AH$mC§qQ>J
nm°{bgrO H$m nmbZ H$aVo g_` ^{dî` _| K{Q>V hmoZo dmbr
policies, Professional Judgment is required to
classify the likehood of the future events KQ>ZmAm| H$s g§^mdZm H$m dJuH$aU H$aZo Ho$ {bE ì`mdgm{`H$
occurring and therefore, the question of AZw_mZ Amdí`H$ h¡ VWm Bg{bE H§$qQ>O|grO VWm CZH$s
contingencies and their accounting arises. AH$mC§qQ>J H$m àíZ CR>Vm h¡&