Accounting Standards in India: The Complete JAIIB AFM Guide (2026) - List of AS

Accounting Standards in India are the single most-tested gateway topic in the JAIIB Accounting &. Financial Management for Bankers (AFM) paper. Get this chapter right and you unlock easy, repeatable marks. Get it wrong. The rest of AFM feels like a foreign language.

This 2026 guide rewrites the classic Learning Sessions notes into one complete. Exam-ready resource. We cover the definition and scope of accounting.

The role of ICAI and the Accounting Standards Board (ASB). The full list of AS 1 to AS 29. The recommendatory standards, and the US GAAP principles you must know.

Read it once. Revise the tables before the exam. And you will walk into the hall confident. Let us begin.

What Is Accounting? The Language of Business

Accounting is popularly called the language of business. Like any language, its core job is communication. It tells owners.

Lenders. Regulators. Investors how a business is performing and how financially healthy it is.

The basic function of accounting is to report the operations of a business. Its financial position over a period. Without it. A bank could never judge whether a borrower is safe or risky.

Features of Accounting

Accounting is essentially an art through which business transactions are recorded. Classified and summarised. It does this in an orderly, structured way.

• Recording: every monetary transaction is entered in the books.
• Classifying: transactions are grouped by their nature before posting.
• Summarising: data is condensed so it can be presented clearly.

Summarised accounting data is usually presented in three forms:

• Trial Balance
• Profit and Loss Account
• Balance Sheet

The Money Measurement Concept

In accounting, transactions are recorded only in terms of money. Money is the single common unit of measurement. Anything that cannot be expressed in money - staff morale. Brand loyalty. A skilled team - simply does not enter the books of accounts.

Two important truths follow from this:

• Accounting records exist because transactions have a financial character.
• Accounting interprets data in financial terms only.

Purpose and Objectives of Accounting

Why do businesses bother with formal accounting at all? Because it serves clear, practical goals. The main objectives are:

1. To maintain records in a systematic way.
2. To find out the results of business operations (profit or loss).
3. To find out where the business stands financially at a point in time.
4. To help managers and owners make rational, data-driven decisions.
5. To fulfil legal duties under the Companies Act. The Income Tax Act, the Societies Act and other laws.

For a banker, that fourth point is gold. Loan appraisal, credit monitoring and ratio analysis all sit on top of sound accounting. You can sharpen this further with our free guides on financial statement analysis.

Types of Accounting You Must Know

Accounting is applied across many areas of a business. The JAIIB AFM syllabus expects you to recognise each branch. What it focuses on.

Accounting Standards in India: Definition and Scope

Now to the heart of this chapter. Accounting Standards in India are written policy documents. They lay down rules for the recognition. Measurement, presentation and disclosure of accounting transactions in financial statements.

Their purpose is simple but powerful: to make financial statements uniform. Reliable and comparable across different companies. Without them, every firm could present its profits however it liked.

Why Accounting Standards Matter

• They reduce confusion by setting one accepted treatment for each item.
• They make statements comparable between companies and over time.
• They improve reliability for investors, lenders and regulators.
• They reduce the scope for manipulation and fraud.

The Birth of the Accounting Standards Board (ASB)

In 1977. The need to harmonise the many different accounting policies. Practices was formally recognised by ICAI - The Institute of Chartered Accountants of India. As a result, the Accounting Standards Board (ASB) came into existence.

The main function of the ASB is to formulate accounting standards. The ICAI Council can issue them as mandatory standards. The Board decides the areas in. Standards are needed and sets the priority for taking them up.

How an Accounting Standard Is Made

The standard-setting process is careful and consultative. Here is the flow you should remember for the exam.

1. The ASB identifies the area that needs a standard and assigns priority.
2. Study groups examine the specific subject in detail.
3. These groups hold dialogues with public-sector. Private-sector industry representatives and other organisations.
4. Based on the inputs. An Exposure Draft of the proposed standard is prepared.
5. The draft is circulated to ASB members and the public for comments.
6. After considering the feedback. The ASB finalises the draft. Submits it to the ICAI Council for issue.

What Happens If Standards Are Not Followed

A mandatory accounting standard is not a polite suggestion. If a company does not follow it. Or there is any inconsistency.

Auditors (members of ICAI) must qualify their audit reports. If auditors fail to report such deficiencies. They are guilty of professional misconduct.

This requirement to qualify non-conforming audit reports is backed by both SEBI. The Companies Act. 2013.

Two key sections of the Companies Act drive this home:

• Section 134(5): places responsibility on the Board of Directors to comply with the mandatory accounting standards.
• Section 129(5): if standards are not followed when preparing financial statements. The company must disclose three things.

Under Section 129(5), the required disclosures are:

• The deviation from the accounting standards.
• The reason why the deviation was made.
• The financial effect, if any, arising from such deviation.

For exact. Up-to-date section wording and any amendments. Always confirm on the latest official IIBF notification. ICAI material before the exam.

List of Accounting Standards: AS 1 to AS 29 (Mandatory)

So far, ICAI has issued 29 mandatory accounting standards. This table is the most frequently asked part of the chapter. Memorise the numbers and names - direct one-mark questions are common.

Note: AS 8 has been deleted. And some standards have been revised or merged over time. Always cross-check the current applicable list on the latest official ICAI. IIBF notification before your exam.

Recommendatory Accounting Standards: AS 30, AS 31 and AS 32

Apart from the mandatory list, there are three non-mandatory (recommendatory) accounting standards. All three deal with financial instruments.

US GAAP: Generally Accepted Accounting Principles of the USA

The JAIIB AFM syllabus also expects basic awareness of US GAAP. GAAP - Generally Accepted Accounting Principles - is the set of rules covering the details. Complexities and legalities of business and corporate accounting in the USA.

GAAP is used as a foundation by the FASB (Financial Accounting Standards Board) for its approved accounting methods. Practices. US law requires that companies whose stocks are traded on stock exchanges release financial statements prepared in line with GAAP.

The 10 Core Principles of US GAAP

These ten principles are highly quotable in the exam. Learn the name and the one-line meaning of each.

1. Principle of Regularity: accountants must strictly follow the established GAAP rules. Regulations.
2. Principle of Consistency: standards are applied consistently throughout the financial reporting process.
3. Principle of Sincerity: accountants follow the standards accurately and with impartiality.
4. Principle of Permanence of Methods: procedures used to prepare all reports must remain consistent.
5. Principle of Non-Compensation: all positives. Negatives of performance must be fully reported. Without offsetting.
6. Principle of Prudence: reported financial data must be fact-based, with no speculation.
7. Principle of Continuity: asset valuation assumes the organisation will keep operating into the near future.
8. Principle of Periodicity: revenues are reported across set time periods such as fiscal quarters or years.
9. Principle of Materiality: reporting discloses all monetary matters that are material in nature.
10. Principle of Utmost Good Faith: all parties preparing the statements are assumed to act honestly.

How to Study Accounting Standards for JAIIB AFM

Knowledge alone does not clear the exam - smart revision does. Use this proven study method for the Accounting Standards chapter.

1. Learn the concept first. Understand what a standard is. Why ICAI made the ASB before touching the list.
2. Memorise the AS table in blocks. Group AS 1 to AS 10, then 11 to 20, then 21 to 29. Small blocks stick better.
3. Use mnemonics for tricky numbers like AS 17 (Segment). AS 18 (Related Party) and AS 22 (Taxes on Income).
4. Link standards to real banking. Connect AS 9 to interest income. AS 13 to bank investments, AS 29 to provisions for bad loans.
5. Practise daily. Attempt topic-wise questions on our mock tests until you score 90 percent or more on this chapter.

Pair this with the structured video lessons and free guides from Learning Sessions, and Accounting Standards becomes one of your strongest scoring areas.

Common Mistakes Students Make

Avoid these frequent errors that cost easy marks in AFM:

• Confusing the standard number with the name. Mixing up AS 16 (Borrowing Costs) and AS 6 (Depreciation) is a classic slip.
• Ignoring AS 30 to AS 32. Many students forget the three recommendatory standards on financial instruments.
• Overlooking the legal sections. Sections 129(5) and 134(5) of the Companies Act are easy targets if revised.
• Memorising without understanding. Rote learning fails the application-based questions now common in JAIIB.
• Skipping US GAAP principles. They look optional - they are very quotable in objective questions.
• Relying on old data. Standards get revised. Always confirm the current list on the latest official IIBF notification.

Frequently Asked Questions (FAQ)

What are Accounting Standards in India?

Accounting Standards in India are written policy documents issued by ICAI that govern the recognition. Measurement, presentation and disclosure of items in financial statements. They make statements uniform, reliable and comparable across companies.

Who issues Accounting Standards in India?

The Accounting Standards Board (ASB) of ICAI formulates the standards. Set up in 1977. The ICAI Council then issues them as mandatory standards for the preparation of financial statements.

How many Accounting Standards are there?

ICAI has issued 29 mandatory standards (AS 1 to AS 29). With AS 8 deleted. Plus three recommendatory standards (AS 30, AS 31, AS 32) on financial instruments. Always confirm the current applicable list on the latest official ICAI. IIBF notification.

What happens if a company does not follow Accounting Standards?

Auditors must qualify the audit report. Failing to do so is professional misconduct. Under Section 129(5) of the Companies Act. The company must disclose the deviation. The reason for it, and any financial effect arising from it.

Is the Accounting Standards topic important for JAIIB AFM?

Yes. It is a high-yield, recurring topic. Direct questions on the AS list.

The role of ICAI and ASB. And US GAAP principles appear regularly. Making it one of the easiest places to secure marks in AFM.

Final Words: Turn This Chapter Into Guaranteed Marks

Accounting Standards in India look like a long list at first glance. But once you understand the why behind the standards. Revise the tables in small blocks. This becomes one of the most reliable scoring chapters in the entire JAIIB AFM paper.

Focus on the definition and scope. The role of ICAI and the ASB. The full AS 1 to AS 29 list. The three recommendatory standards, and the US GAAP principles. Revise, test yourself, repeat.

Stay consistent. Trust the process, and you will clear JAIIB on your first attempt. You have got this - now go and own that exam hall.

Related Guides

For more on Accounting Standards in India. See the official IIBF circulars. Our chapter-wise free notes on iibf.store.

For more on “Accounting Standards in India”, explore our free mock tests and chapter notes on iibf.store.

Bookmark this page — we keep our “Accounting Standards in India” guidance current as IIBF revises its rules.