AS 1 Disclosure of Accounting Policies One Shot | CMA Inter Group 1

AS 1 (Disclosure of Accounting Policies) One Shot Revision for CMA Inter Group 1, Paper 6 Financial Accounting. A small standard with big marks and the base of every other accounting standard. This video covers the complete standard: the 3 Fundamental Accounting Assumptions (Going Concern, Consistency, Accrual), meaning of Accounting Policy, how to select one (Prudence, Substance over Form, Materiality), the 3 disclosure requirements, and the most frequently asked exam question: drafting Notes to Accounts for changes in accounting policy. 📚 What you'll learn in this One Shot: ✔ What AS 1 is and why it is the base of all accounting standards ✔ The 3 Fundamental Accounting Assumptions: Going Concern, Consistency, Accrual (GCA) ✔ When disclosure is required and when it is not for each assumption ✔ Memory trick: Income is Earned, Expense is Incurred ✔ Definition of Accounting Policy (the keywords examiners look for) ✔ Examples of areas needing accounting policies (inventory, cash flow, contracts, PPE, foreign exchange, government grants, investments) ✔ How to select an accounting policy: True and Fair View as the primary consideration ✔ Secondary considerations: Prudence, Substance over Form, Materiality ✔ The 3 disclosure requirements in Notes to Accounts ✔ Fact of change and effect of change, and what to do when the effect cannot be quantified ✔ Solved illustration: changes in inventory valuation, depreciation method, warranty provision and provision for permanent fall in investments ✔ How to write the Notes to Accounts answer in the exam 👨‍🏫 Taught by: Abhimanyyu Agarrwal 📖 Course: CMA Intermediate Group 1 📄 Paper: Paper 6 – Financial Accounting 🙋 Frequently Asked Questions: Q1. What are the Fundamental Accounting Assumptions in AS 1? A. Three: Going Concern, Consistency and Accrual (remembered as GCA). Q2. What is the Going Concern assumption? A. The enterprise is viewed as continuing in operation for the foreseeable future, with no intention or necessity to liquidate or curtail the scale of its operations. Q3. Is disclosure required if the fundamental assumptions are followed? A. No. If any one of them is not followed, the fact must be disclosed in the Notes to Accounts. Q4. What does the Consistency assumption mean? A. Accounting policies are followed consistently from one accounting period to another. A change in policy is allowed but the fact and effect must be disclosed. Q5. What is the Accrual basis? A. Income is recorded when earned and expenses when incurred, not when cash is received or paid. Q6. What is an Accounting Policy? A. The specific accounting principles and the methods of applying those principles adopted by an enterprise in the preparation and presentation of financial statements. Q7. How should an accounting policy be selected? A. The primary consideration is that the policy gives a True and Fair View. The secondary considerations are Prudence, Substance over Form and Materiality. Q8. What must be disclosed under AS 1? A. (1) All significant accounting policies in one place, in Notes to Accounts. (2) Any change in accounting policy with a material effect: the fact of change and its effect on current and future periods, and at least the fact if the effect cannot be fully quantified. (3) The fact if any fundamental assumption is not followed. ⏱ Timestamps: 0:00 Introduction & Roadmap 2:27 Fundamental Accounting Assumptions (GCA) 15:15 Meaning of Accounting Policy 20:07 Selection of Accounting Policy: Prudence, Substance over Form, Materiality 27:42 Disclosure Requirements 31:39 Full Recap 33:34 Illustration: Notes to Accounts (4 Changes) 42:37 Closing 🔔 Subscribe for more One Shot Revisions of CMA Inter Group 1 & Group 2: Financial Accounting, Corporate Accounting & more, only on this channel! 📲 Notes download and updates: Disclaimer: This video is for educational purposes to help CMA Intermediate students revise for their exams. 📚 Join Our CA/ CMA Foundation & Intermediate Classes 👉 Modes: Face-to-Face (Kolkata), Live Online, Google Drive, and Pendrive 📞 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩: / 🌐 𝐕𝐢𝐬𝐢𝐭: ‎🌐 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩 𝐂𝐡𝐚𝐧𝐧𝐞𝐥: 🌐 𝐓𝐞𝐥𝐞𝐠𝐫𝐚𝐦: 🌐 𝐈𝐧𝐬𝐭𝐚𝐠𝐫𝐚𝐦: #CMAInter #AS1 #FinancialAccounting #AccountingStandards #CMAInterGroup1 #CMAIntermediate #OneShotRevision #CMAInterPaper6 #ICMAI