The objectives of IJMFA are to establish an effective channel of communication between policy makers, government agencies, academic and research institutions and persons concerned with the complex role of accounting in advanced manufacturing environments. This standard prescribes the accounting treatment of taxes on income and follows the concept of matching expenses against revenue for the period. The concept of matching is more peculiar in cases of income taxes since in a number of cases, the taxable income may be significantly different from the income reported in the financial statements due to the difference in treatment of certain items under taxation laws and the way it is reflected in accounts. Requirements for presenting information about financial instruments are in Accounting Standard.
AS 23 describes the principles and procedures for recognising investments in associates (in which the investor has significant influence, but not a subsidiary or joint venture of imestor) in the consolidated financial statements of the investor. An investor which presents consolidated financial statements should account for investments in associates as per equity method in accordance with this standard but in its separate financial statements, AS 13 will be applicable. It also lays down the principles for recognition and measurement in a complete or condensed financial statements for an interim period.
An enterprise may be required or may elect to present information at interim dates as compared with its annual financial statements due to timeliness and cost considerations. The standard prescribes the minimum contents of an interim financial report and requires that an enterprise which elects to prepare and present an interim financial report, should comply with this standard.
Timely and reliable interim financial reporting improves the ability of investors, creditors and others to understand an enterprise’s capacity to generate earnings and cash flows, its financial condition and liquidity. The standard prescribes the accounting treatment for intangible assets that are not dealt with specifically under other accounting standards, and requires an enterprise to recognise an intangible asset if, and only if, certain criteria are met. The standard will not apply to provisions/liabilities resulting from executing controls and those covered under any other accounting standard.
An investor in joint venture, which does not have joint control, should report its interest in a joint venture in its consolidated financial statements in accordance with AS 13, AS 21 and AS 23. This standard should be applied in accounting for impairment of all assets except inventories (AS 2), assets arising under construction contracts (AS 7), financial assets including investments covered under AS 13, and deferred tax assets (AS 22). The purpose of Codification is to better organize accounting principles and laws to simplify user access.