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1. Valuation of Inventories:(AS 2)

Joint costs that are incurred till the split-off point should be shared by the joint products on a suitable basis.

Lesson: All the expenses that are incurred by the parents on the children should be shared by the children proportionately based on their respective earning capacity (preferably)

2. Revenue Recognition:(AS9)

Revenues should be recognised only when all the relevant risks n rewards are transferred and there is no known uncertainty regarding collectability of revenue

Lesson: Don't count the chicken before they hatch ,Don't build castles in the air

3. Property, Plant &Equipment:(AS10)

Expenditure that are incurred which do not enhance the previously assessed productivity should be charged off

Lesson: Any efforts that do not bring any value addition should be dispensed with

4. Qualifying Assets:(AS16)

Assets that take substantially long time to come into existence are qualifying assets. Capitalisation of interest on loan taken for such an asset shall cease, once the asset is ready for use

Lesson: CA/CMA/CS students take a substantially long period of time to be qualified and once we are qualified, the assistance from parents ceases

5. Self-Generated Goodwill (AS26)

Self-generated Goodwill should not be shown on the balance sheet. Should show only purchased goodwill.

Lesson: We should not blow our trumpet. We should quote only those things which we can substantiate and which have inherent value

6. Reversal of Impairment Loss(AS28)

While reversing impairment loss we have to restore the WDV to the same amount that would have been there had we not recognized any impairment loss in the past

Lesson: SUBAH KA BHOOLA SHAAM KO WAAPAS AA JAYE TO USE BHULA NAHIN KEHTE

If we sever our ties with anyone for any wrongdoing by the latter and if he /she realizes his/her mistake we should accept them back and resume the bonding as if no estrangement ever happened

7. Fictitious Assets should be written off the earliest

Fictitious assets inflate the assets but bring no value, hence should be removed from balance sheet the earliest

Lesson: Negative emotions such as Ego, grudge etc... do not have any value should be dispensed with the earliest

8. Periodical revaluation of PPE(AS 10)

Periodical revaluation should be made of an entire asset class form time to time

Lesson: We need to review our methods and approaches form time to time in the light of prevailing circumstances

9. Restated EPS(AS20)

Whenever there is a right issue or bonus issue, we adjust the past year EPS with the current No. of shares

Lesson: When we compare different performances/eras, we need to evaluate the past situations in the light of present circumstances.

10. Conservatism concept

We should provide for all possible losses but should not recognize any anticipated gains

Lesson: We should always be prepared for all possible negative outcomes , but should not celebrate anything before it occurs

The author is a practicing Chartered Accountant ,Passionate writer and teacher with experience of seven years

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