Accounting Standards require companies and auditors to apply prescribed standards in preparation of general purpose financial statements. The Central Government prescribes Accounting Standards and requires every company and its auditor(s) to apply them in preparing General Purpose Financial Statements; Accounting Standards 1-7 and 9-29 take effect for accounting periods commencing on or after publication. The rules define key terms including Small and Medium Sized Company and set eligibility conditions and a two period qualification requirement before SMCs may claim exemptions or relaxations.