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Paper 1 Principles and Practices of Accounting Theoretical Framework 1.33
Uniformity
Comparability
Qualitative improvement in the preparation and presentation of financial statements
Reduction in variations — which in turn facilitates comparison Disclosures beyond
what is required by law
Standardisation
of Alternative
Accounting
Treatments
Benefits of
Accounting
Standards
Comparability Requirements
of Financial for Additional
Statements Disclosures
Fig. 1.11 Benefits of Accounting Standards
1.20.3 Limitations of Accounting Standards
Difficulties in making choice between different treatments: Certain accounting prob-
lems may have alternative solutions. Therefore to make a choice between different
alternative accounting treatments may become difficult.
Restricted scope: The statute cannot be overrided by Accounting Standards. The
standards are required to be framed within the ambit of prevailing statue.
Difficulties in
Limitations
making choice
of accounting between different Restricted scope
standards
treatments
Fig. 1.12 Limitation of Accounting Standards
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