What is Accounting Standard (AS)?

Accounting Standards (AS) are a set of authoritative principles and guidelines for financial accounting and reporting in India, issued by the Institute of Chartered Accountants of India (ICAI). They dictate how transactions should be recorded, measured, and presented in the financial statements, ensuring consistency and comparability across different companies.

For Startups: While larger or listed companies are required to follow the more complex Indian Accounting Standards (Ind AS), most startups fall under the purview of the simpler Accounting Standards (AS). Adhering to these standards is not optional; it is a legal requirement. Compliance ensures that a startup's financial statements are credible and will stand up to the scrutiny of an audit or investor due diligence.

Example: Accounting Standard 9 (AS 9) on Revenue Recognition provides specific rules on when a company can record revenue, which is especially critical for SaaS startups with subscription models.