Mar 31, 2011
A) Fundamental Accounting Assumptions
The Financial statements of the Company are prepared under the
historical cost convention on going concern basis in accordance with
generally accepted accounting principles applicable in India. The said
financial statements comply with the relevant provisions of the
Companies Act and applicable Accounting Standards issued by ICAI.
b) Method of Accounting
The company generally follows the mercantile system of accounting and
recognizes income and expenditure on accrual basis.
c) Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affects the reported amount of assets
and liabilities, the disclosure of contingent liabilities on the date
of the financial statements and the reported amount of revenues and
expenses during the reported period. Actual results differ from
Estimates. Adjustment as a result of difference between actual and
estimates are made prospectively in the period in which results are
known /dematerialized.
d) Fixed / Intangible Assets and Depreciation
a) Fixed assets are stated at their original cost of acquisition
including taxes, freight and other incidental expenses related to
acquisition and installation of the concerned assets less depreciation
till date.
b) Fixed assets are retired from active use or held for disposal are
stated at lower of their net book value and net realizable value and
are shown separately in the financial statements. Any profit or losses
arising on disposal are generally recognized in profit and loss
account.
c) Goodwill arising on acquisition of the division at foreign country
is stated at cost and it is amortized over five years being the useful
life of the business undertaken.
d) Depreciation on Fixed Assets is provided on written down value
method at the rates prescribed in Schedule XIV of the Companies Act,
1956 on monthly pro rata basis.
e) Individual assets costing less than Rs. 5000/- are provided at 100%
depreciation in the year of acquisition.
e) Inventory
The company deals with software development business. The company does
not carry any inventory of finished good of software except
Work-in-progress as on the balance sheet date.
Work-in-progress is valued at the cumulative cost of expenses incurred
pertaining to the project
f) Revenue Recognition
The Company derives income from rendering services and the revenue has
been recognized as follows:
a) Revenue from Software Education services are recognized in full, on
accrual basis, upon registration for the courses.
b) Revenue from Consultancy services are recognized in full, on accrual
basis upon completion of services.
g) Investments
All Investments, being long term in nature, are stated at cost.
h) Retirement Benefits
Retirement benefits in the form of provident fund is a defined
contribution scheme, is charged to profit and loss account of the year,
when the contribution to the respective fund accrues.
Gratuity and Leave Encashment benefits pertaining to Indian operations
are charged in the profit and loss account on the basis of actuarial
valuation.
i) Borrowing Cost
Borrowing Cost directly attributable to the acquisition or construction
of qualifying assets capitalised. Other borrowing costs are recognized
as expenses in the period in which they are incurred.
j) Lease
The company has taken office premises on lease under cancellable
operating lease agreements that are renewable on periodic basis at the
option of lessor and lessee. Payments in the form of rental advances
are grouped under loans and advances and monthly rentals are charged to
profit and loss account. k) Taxes on Income
Provision for income tax is made on the taxable income for the year at
current rates. Tax expense comprises of current tax, fringe benefit tax
and deferred tax at the applicable enacted or substantively enacted
rates. Current tax represents the amount of income tax payable for the
reporting period.
Deferred tax represents the effect of timing difference between taxable
income and accounting income for the reporting period that originate in
one period and are capable of reversal in one or more subsequent
periods.
Deferred tax assets is recognized and carried forward only to the
extent that there is a reasonable certainty that the assets will be
realized in future. However, where there is unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets are
recognized only if there is virtual certainty of realization of assets.
k) Interim Financial Reporting
The company has adopted same accounting policies in preparation of
interim financial statements as they followed in preparation of annual
financial statements.
l) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when there is a present obligation as a
result of past vents and it is probable that an outflow of resources
will be required to settle the obligations, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet and adjusted to reflect the current best estimates.
Contingent Liability is disclosed for possible obligation which will be
confirmed only by future events not wholly within the control of the
company (or) Present obligation arising from past events where it is
not probable that an outflow of resources will be required to settle
the obligation or reliable estimate of the amount of obligation cannot
be made.
Contingent asset not recognized in the financial statements since this
may result in the recognition of income that may never be realized.
Mar 31, 2010
A) Fundamental Accounting Assumptions
The Financial statements of the Company are prepared under the
historical cost convention on going concern basis in accordance with
generally accepted accounting principles applicable in India. The said
financial statements comply with the relevant provisions of the
Companies Act and applicable Accounting Standards issued by ICAI.
b) Method of Accounting
The company generally follows the mercantile system of accounting and
recognizes income and expenditure on accrual basis.
c) Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affects the reported amount of assets
and liabilities, the disclosure of contingent liabilities on the date
of the financial statements and the reported amount of revenues and
expenses during the reported period. Actual results differ from
Estimates. Adjustment as a result of difference between actual and
estimates are made prospectively in the period in which results are
known /dematerialized.
d) Fixed / Intangible Assets and Depreciation
a) Fixed assets are stated at their original cost of acquisition
including taxes, freight and other incidental expenses related to
acquisition and installation of the concerned assets less depreciation
till date.
b) Fixed assets are retired from active use or held for disposal are
stated at lower of their net book value and net realizable value and
are shown separately in the financial statements. Any profit or losses
arising on disposal are generally recognised in profit and loss
account.
c) Goodwill arising on acquisition of the division at foreign country
is stated at cost and it is amortised over five years being the useful
life of the business undertaken.
d) Depreciation on Fixed Assets is provided on written down value
method at the rates prescribed in Schedule XIV of the Companies Act,
1956 on monthly pro rata basis.
e) Individual assets costing less than Rs. 5000/- are provided at 100%
depreciation in the year of acquisition.
e) Inventory
The company deals with software development business. The company does
not carry any inventory of finished good of software except
Work-in-progress as on the balance sheet date.
Work-in-progress is valued at the cumulative cost of expenses incurred
pertaining to the project
f) Revenue Recognition
The Company derives income from rendering services and the revenue has
been recognised as follows:
a) Revenue from Software Education services are recognised in full, on
accrual basis, upon registration for the courses.
b) Revenue from Consultancy services are recognised in full, on accrual
basis upon completion of services.
g) Investments
All Investments, being long term in nature, are stated at cost.
h) Retirement Benefits
Retirement benefits in the form of provident fund is a defined
contribution scheme, is charged to profit and loss account of the year,
when the contribution to the respective fund accrues.
Gratuity and Leave Encashment benefits pertaining to Indian operations
are charged in the profit and loss account on the basis of actuarial
valuation.
i) Borrowing Cost
Borrowing Cost directly attributabletothe
acquisitionorconstructionofqualifying assets capitalised. Other
borrowing costs are recognisedasexpensesinthe period inwhich they are
incurred.
j) Lease
The company has taken office premises on lease under cancellable
operating lease agreements that are renewable on periodic basis at the
option of lessor and lessee. Payments in the form of rental advances
are grouped under loans and advances and monthly rentals are charged to
profit and loss account.
k) Taxes on Income
Provision for income tax is made on the taxable income for the year at
current rates. Tax expense comprises of current tax, fringe benefit tax
and deferred tax at the applicable enacted or substantively enacted
rates.
Current tax represents the amount of income tax payable for the
reporting period.
Deferred tax represents the effect of timing difference between taxable
income and accounting income for the reporting period that originate in
one period and are capable of reversal in one or more subsequent
periods.
Deferred tax assets is recognized and carried forward only to the
extent that there is a reasonable certainty that the assets will be
realized in future. However, where there is unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets are
recognized only if there is virtual certainty of realization of assets.
l) Interim Financial Reporting
The company has adopted same accounting policies in preparation of
interim financial statements as they followed in preparation of annual
financial statements.
m) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when there is a present obligation as a
result of past vents and it is probable that an outflow of resources
will be required to settle the obligations, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet and adjusted to reflect the current best estimates.
Contingent Liability is disclosed for possible obligation which will be
confirmed only by future events not wholly with in the control of the
company (or) Present obligation arising from past events where it is
not probable that an outflow of resources will be required to settle
the obligation or reliable estimate of the amount of obligation cannot
be made.
Contingent asset not recognized in the financial statements since this
may result in the recognition of income that may never be realized.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article