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.
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.
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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.
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**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!
CAclubindia
