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CA Intermediate · Advanced Accounting · Introduction to Accounting Standards

Ananya Retail Ltd. is a company whose equity shares are not listed and which is not a bank or insurer. Its turnover is ₹80 crore, borrowings are ₹10 crore, and it has no listed securities in process of listing. Under the Companies (Accounting Standards) Rules, which description fits it for accounting standards compliance?

Ananya Retail qualifies as a Small and Medium sized Company because it is unlisted, not a bank or insurer, and its turnover of ₹80 crore and borrowings of ₹10 crore are within the prescribed limits. It can therefore use the exemptions and relaxations, but must still follow the remaining standards.

  1. AA Small and Medium sized Company, eligible for exemptions and relaxationsCorrect
  2. BA Level I enterprise required to comply fully with all standards
  3. CA company exempt from all accounting standards
  4. DA company required to follow only AS 1 to AS 5

Explanation

A Small and Medium sized Company is unlisted and not a bank or financial institution, with turnover up to ₹250 crore (excluding other income) and borrowings up to ₹50 crore. Ananya has ₹80 crore turnover and ₹10 crore borrowings, so it qualifies and may claim relaxations, though it is not exempt from all standards.

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