Two mandatory accounting standards for tax
This query is : Resolved
suhas potadar
(Querist)
16 October 2013
hi,
which are the two mandatory accounting standards for tax.
which are the two mandatory accounting standards for tax.
Nikhil Kaushik
(Expert)
17 October 2013
Mandatory standards are NAS-1, relating to disclosure of accounting policies and NAS-2 relating to disclosure of prior period and extra-ordinary items and changes in accounting policies.
suhas potadar
(Querist)
18 October 2013
ya AS 1 mandatory but what about AS 9 i.e.Revenue Recognition. This is also mandatory or not
02 August 2025
Great question!
For **tax purposes in India**, the two **mandatory Accounting Standards (AS)** often referred to are:
1. **AS-1**: Disclosure of Accounting Policies
* Requires disclosure of the significant accounting policies adopted by the enterprise.
2. **AS-9**: Revenue Recognition
* Deals with the timing and basis on which revenue should be recognized in the financial statements.
---
While **AS-2** (Disclosure of Prior Period and Extraordinary Items) is important, **AS-9 (Revenue Recognition)** is indeed considered mandatory for tax purposes because revenue recognition directly affects the calculation of taxable income.
So, **AS-1 and AS-9** are the two key mandatory standards for tax accounting.
---
**Summary:**
| Accounting Standard | Relevance for Tax Accounting |
| ------------------- | ----------------------------------------------------------------------------- |
| AS-1 | Disclosure of accounting policies |
| AS-9 | Revenue recognition (mandatory) |
| AS-2 | Prior period/extraordinary items (important but not always mandatory for tax) |
Let me know if you want detailed explanations or implications of these standards on tax!
For **tax purposes in India**, the two **mandatory Accounting Standards (AS)** often referred to are:
1. **AS-1**: Disclosure of Accounting Policies
* Requires disclosure of the significant accounting policies adopted by the enterprise.
2. **AS-9**: Revenue Recognition
* Deals with the timing and basis on which revenue should be recognized in the financial statements.
---
While **AS-2** (Disclosure of Prior Period and Extraordinary Items) is important, **AS-9 (Revenue Recognition)** is indeed considered mandatory for tax purposes because revenue recognition directly affects the calculation of taxable income.
So, **AS-1 and AS-9** are the two key mandatory standards for tax accounting.
---
**Summary:**
| Accounting Standard | Relevance for Tax Accounting |
| ------------------- | ----------------------------------------------------------------------------- |
| AS-1 | Disclosure of accounting policies |
| AS-9 | Revenue recognition (mandatory) |
| AS-2 | Prior period/extraordinary items (important but not always mandatory for tax) |
Let me know if you want detailed explanations or implications of these standards on tax!
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