Notifies the following accounting standards to be followed by all assessees following the mercantile system of accounting u/s 145(2) - S.O.69(E) - Income Tax

Accounting standards require disclosure of accounting policies and separate reporting of prior period and extraordinary items.

Notification prescribes mandatory accounting standards for assessees under section 145(2) requiring disclosure of all significant accounting policies in the financial statements, aiming to present a true and fair view guided by prudence, substance over form and materiality. Material changes in policies or estimates must be disclosed and their impact shown; effects not ascertainable must be indicated. Prior period items and extraordinary items must be separately disclosed with nature and amount, and questions whether a change is a policy or an estimate are to be referred to the Board.