# Accounting Standards — Section 133

## Process of Notification of AS / Ind AS

The Central Government prescribes Accounting Standards (AS) or Indian Accounting Standards (Ind AS) as recommended by ICAI, after consultation with NFRA.

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ICAI → Recommends standards

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NFRA ← Central Govt consults NFRA

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Central Government → Notifies the AS / Ind AS

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## Key Points

Recommender: ICAI
Consultative body: NFRA
Notifying authority: Central Government
Notified standards are binding on all companies preparing financial statements under the Companies Act, 2013.

⚠️ Common exam mistakes

Stating that ICAI notifies AS under the Companies Act — ICAI only recommends; notification is by Central Government.
Forgetting that NFRA must be consulted before notification.
Confusing 'recommendation' (ICAI) with 'consultation' (NFRA) — both are distinct stages.

Bare-Act text Section 133 · Companies Act, 2013 · click to expand

Section 133 — Central Government to prescribe accounting standards: The Central Government may prescribe the standards of accounting or any addendum thereto, as recommended by the Institute of Chartered Accountants of India, constituted under section 3 of the Chartered Accountants Act, 1949, in consultation with and after examination of the recommendations made by the National Financial Reporting Authority.

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Accounting Standards — Section 133

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⚠️ Common exam mistakes