Accounting Standards explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
An Accounting Standard is a written rule on how a class of transactions is recognised, measured, presented and disclosed in financial statements. This guide lists every standard in force, explains how the Institute of Chartered Accountants of India (ICAI) makes them, and tells you which set your entity follows, a check our books of accounts compliance team makes at every year-end.
Accounting Standards as on 1 April 2025 (ICAI compendium), read with the Companies (Accounting Standards) Rules, 2021 as amended up to G.S.R. 169(E) of 10 March 2026. Later amendments should be checked on icai.org and mca.gov.in.
India has two sets of standards: the Accounting Standards (AS) and the Indian Accounting Standards (Ind AS). A company that is not required to follow Ind AS applies AS under the Companies (Accounting Standards) Rules, 2021, with relaxations for small and medium sized companies. A non-company entity (firm, proprietorship, LLP, trust) applies the AS issued by ICAI, with relief by size. There are 27 standards in the compendium, numbered AS 1 to AS 29 with no AS 6 and no AS 8.
How the standards are made
The ICAI formed the Accounting Standards Board (ASB) in 1977 to harmonise the different accounting practices then in use. The Board has members from outside the profession as well: nominees of the Central Government, the Reserve Bank of India, the Securities and Exchange Board of India, industry bodies, academic institutions and financial institutions.
The Preface describes the route a standard takes (paragraphs 5.1 to 5.11):
- The Board picks the subject and a study group prepares a draft covering objective, scope, definitions, recognition and measurement, and disclosure.
- An exposure draft is released to members, the public, stock exchanges and other interest groups for comment.
- The Board finalises the draft and sends it to the ICAI Council, which issues the standard.
- A substantive revision follows the same route; a limited revision, which is not substantive, follows a similar but lighter one.
Two points of status matter in practice. A standard is mandatory from the date stated in it, and financial statements cannot be described as complying with the standards unless they meet every requirement of each applicable standard (Preface, paragraph 6.3). The standards also do not override law: where a standard conflicts with an applicable law, the law prevails (paragraph 4.1). Bold italic and plain type paragraphs carry equal authority (paragraph 4.6).
For companies, the legal hook is section 133 of the Companies Act, 2013, under which the Central Government notifies the standards. Read our post on section 133 and accounting standards for that route.
The list as in force
The compendium prints these standards. Where a standard has been revised the compendium adds "(Revised)", but the number stays.
| AS | Title | What it covers | Live guide |
|---|---|---|---|
| AS 1 | Disclosure of Accounting Policies | Assumptions, selection and disclosure of policies | AS 1 |
| AS 2 | Valuation of Inventories | Cost and net realisable value of stock | AS 2 |
| AS 3 | Cash Flow Statements | Operating, investing and financing flows | AS 3 |
| AS 4 | Contingencies and Events Occurring after the Balance Sheet Date | Events up to approval of accounts | AS 4 |
| AS 5 | Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies | Prior period items, estimates, policy changes | AS 5 |
| AS 7 | Construction Contracts | Contract revenue and costs | AS 7 guide |
| AS 9 | Revenue Recognition | Sale of goods, services, interest, royalties | AS 9 |
| AS 10 | Property, Plant and Equipment | Cost, depreciation and disposal | AS 10 |
| AS 11 | Effects of Changes in Foreign Exchange Rates | Foreign currency items | AS 11 |
| AS 12 | Accounting for Government Grants | Grants and their presentation | AS 12 |
| AS 13 | Accounting for Investments | Classification and carrying amount | AS 13 |
| AS 14 | Accounting for Amalgamations | Merger and purchase methods | AS 14 guide |
| AS 15 | Employee Benefits | Short-term, post-employment, other benefits | AS 15 |
| AS 16 | Borrowing Costs | Capitalising interest on qualifying assets | AS 16 |
| AS 17 | Segment Reporting | Business and geographical segments | AS 17 |
| AS 18 | Related Party Disclosures | Related parties and transactions | AS 18 |
| AS 19 | Leases | Finance and operating leases | AS 19 |
| AS 20 | Earnings Per Share | Basic and diluted EPS | AS 20 guide |
| AS 21 | Consolidated Financial Statements | Group accounts | AS 21 |
| AS 22 | Accounting for Taxes on Income | Current and deferred tax | AS 22 guide |
| AS 23 | Accounting for Investments in Associates in Consolidated Financial Statements | Equity method | AS 23 |
| AS 24 | Discontinuing Operations | Disposal of a line of business | AS 24 |
| AS 25 | Interim Financial Reporting | Quarterly and half-yearly reports | AS 25 |
| AS 26 | Intangible Assets | Recognition and amortisation | AS 26 |
| AS 27 | Financial Reporting of Interests in Joint Ventures | Jointly controlled operations, assets, entities | AS 27 |
| AS 28 | Impairment of Assets | Recoverable amount | AS 28 |
| AS 29 | Provisions, Contingent Liabilities and Contingent Assets | When to provide | AS 29 |
Two numbers are missing on purpose. There is no AS 6 and no AS 8 in the compendium. Depreciation is dealt with in AS 10 and research and development in AS 26, so do not look for either number. Also do not look for AS 30, 31 or 32: they are not in force.
A separate document, the Framework for the Preparation and Presentation of Financial Statements, sits behind all the standards. It is not itself a standard; see our guide to the Framework.
Who must apply them
Applicability turns on the kind of entity.
| Entity | Set applied | Relief |
|---|---|---|
| Company required to follow Ind AS | Ind AS only | None needed; Ind AS has its own scope |
| Company not on Ind AS | AS notified under the Companies (Accounting Standards) Rules, 2021 | Small and medium sized companies get exemptions and relaxations |
| Firm, proprietorship, LLP, trust, society | AS issued by ICAI | Micro, small and medium level entities get relief by size |
The size tests and the exact exemptions are not repeated here. They are set out in classification of entities for accounting standards, and the companies' side, including the March 2026 amendment, is in our post on Rule 1 to 5 of the Companies (Accounting Standards) Rules, 2021.
AS and Ind AS in one paragraph
Ind AS are converged with the international standards issued by the IASB, with departures only where the Indian economic environment called for them. They carry their own titles and numbers: for example, Ind AS 115 for revenue, Ind AS 116 for leases, Ind AS 103 for business combinations and Ind AS 109 for financial instruments. AS are the older, shorter Indian standards. An entity applies one set, never a mixture. Our sister series on Ind AS starts with the conceptual framework under Ind AS.
Choosing the right standard for a transaction
A practical way to use the list is to start from the transaction and not the number. A purchase of a machine points to AS 10, with AS 16 if borrowings fund it and AS 28 if its value falls. A sale points to AS 9. A year-end stock count points to AS 2. A related party loan points to AS 18. A group structure points to AS 21, and a merger to AS 14. Where two standards seem to apply, read the scope paragraph of each: it says what is left out.
Need help with standards compliance?
If you are unsure whether your company or firm is a small or medium sized entity, or which standards your financial statements must follow, our team can map the applicable standards and the disclosures that follow. Start with books of accounts compliance and we will review the position against your latest accounts.
Key takeaways
- The compendium holds 27 standards numbered AS 1 to AS 29; AS 6 and AS 8 do not exist and AS 30 to 32 are not in force.
- ICAI makes standards through its Accounting Standards Board: draft, exposure draft, Council approval.
- A standard cannot override law; financial statements claim compliance only if every applicable requirement is met.
- Companies not on Ind AS follow the 2021 Rules; non-company entities follow ICAI's AS with relief by size.
- An entity follows AS or Ind AS, not both.
Read next
- Framework for the Preparation and Presentation of Financial Statements
- Accounting concepts, principles and conventions
- AS 1 Disclosure of Accounting Policies
- Section 133: accounting standards under the Companies Act
Disclaimer: Based on the Accounting Standards issued by the Institute of Chartered Accountants of India as on 1 April 2025, the Companies (Accounting Standards) Rules, 2021 as amended up to G.S.R. 169(E) of 10 March 2026, the Companies Act, 2013 and the ICAI guidance named in the article, as consulted on 4 October 2026. The worked example uses invented figures. Later amendments should be checked on icai.org and mca.gov.in. This article is general information, not legal advice; check the official text before acting.