Accounting Standards (ASs) are written policy documents issued by the Government with the support of other regulatory bodies. Accounting standards apply to the full breadth of an entity’s financial picture, including assets, liabilities, revenue, expenses, and shareholders' equity.
ICAI has huge affinity towards the Accounting Standards. An average of 20 marks come in the exam almost, if not in every, all the attempts. The topic seems to be easy to understand when you start studying it but the problem arises when you have to convert all the theoretical knowledge and put it into paper for practical problem solving.
Following the principle of being as close as possible to source, learning accounting standards directly from the Accounting Pronouncements of ICAI is highly recommended. Though the book appears to be huge, learning everything from the first-hand makes you understandall the nuances of the standard,peculiarities of the standard,all the reasons for its principles andexact meaning the standard intends to convey.
This is of utmost importance if you are looking at conceptual clarity. Reading the bare Accounting Standards helps you to cover the entire content. You just need to read a particular standard like you read a novel or a newspaper. The aim here is not to memorize anything. It is just to familiarize yourself with the terminologies and the crux of what each Accounting Standard is saying.
Whenever you start studying the ASs, Go sequentially. As AS-1 is the base so start with that rather than going directly to the last AS. Try to understand the standards, their practical applications and don't just read it for fetching marks. Also, solve the questions for the relevant AS simultaneously.
Understanding an accounting standard directly from the pronouncements’ material requires initial readings, immediate revisions and solving some comprehension problems at the same time. Take ample time to comprehend the standard.
Comprehension problems require special mention. Practice as many as you can immediately after your first reading and immediate revision. Mark their difficulty and necessity to revise in the margin for future reference.
Presentation plays a key role in the exam. Refer old question papers, compilations, practice manuals for knowing the way of presentation. A preferred way is to present an AS related Application question identifying the following:
In the exam, you are expected to write the precise AS numbers, definitions, basic terminology and principles. So, read them keenly while preparing.
To make your preparation regarding Accounting Standards complete, it is essential that you look up at the RTPs, MTPs and Past Papers of the ICAI and practice questions from there. You need to know what is the level of questions you are up against and what more you need to do in order to be able to successfully answer such questions.