The transactions and results under this category are to be disclosed separately in financial statements. Example: – Profit on sale of fixed assets, Loss due to theft. Profit or loss from extraordinary activities is such which do not arise under the normal course of business. The transactions and results under this category are shown as usual items in the financial statements for the accounting period. Examples: Profit/loss on sale of goods, services. These activities are a part of business and related activities. Profit or loss from ordinary activities is such which arise in the normal course of business. Two broad categories of net profit and loss for the period are Profit or loss from ordinary activities and Profit or loss from extraordinary activities. The standard particularly deals with following four specific items: Net Profit or Loss for the Period Also, the financial statements of different enterprises can be compared over time when the standard is applied properly. Why apply – Applying this standard helps in comparison of financial statements among various enterprises. The standard doesn’t deal with tax implication on account of such changes as mentioned above. The standard also describes the treatment of changes in accounting estimates and disclosures to be made on account of such changes. AS 5 specifies the method of classification and disclosure for the following items:Ĭ.
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