Applicability of accounting standards

Nitin Singhal (Gaining knowledge...) (320 Points)

18 February 2012  

My first Question is What does Commercial, Industrial and Business Reporting means in context of Accounting Standards?


Paragraph 3 to Preface says:

"...Accounting Standards apply in respect of any enterprise (whether organised in corporate, co-operative1 or other forms) engaged in commercial, industrial or business activities, irrespective of whether it is profit oriented or it is established for charitable or religious purposes. Accounting Standards will not, however, apply to enterprises only carrying on the activities which are not of commercial, industrial or business nature, (e.g., an activity of collecting donations and giving them to flood affected people)...."


If I am a sole proprietor having 100 crores turnover doing business from my capital only (i.e. no loans of any kind). Will I have to follow Accounting Standards as I am doing commercial activity? But AS says it is applicable on Reporting Enterprises. As I am Sole proprietor and have no loans I do not report to anybody.