Steps of Simulation


Simulation is a quantitative procedure which describes a process by developing a model of that process and then conducting a series of organised trial and error experiments to predict the behaviour of the process over time.

Steps in the Simulation Process

  • Define the problem or system you intend to simulate.
  • Formulate the model you intend to use.
  • Test the model; compare its behaviour with the behaviour of the actual problem environment.
  • Identify and collect the data needed to test the model.
  • Run the simulation.
  • Analyse the results of the simulation and, if desired, change the solution you are evaluating.
  • Rerun the simulation to test the new solution.
  • Validate the simulation, that is, increase the chances that any inferences you draw about the real situation from running the simulation will be valid.

List of Accounting Standards

Accounting Standards
AS-01     Disclosure of Accounting Policies (Accounting Policy)
AS-02    Valuation of Inventories (Inventory)
AS-03    Cash Flow Statements (CFS)
AS-04    Contingencies and Events occurring after the balance sheet date (Events)
AS-05    Net profit or Loss for the Period, Prior-Period Items, & Changes in Accounting
Policies (PPI)

AS-06    Depreciation Accounting (Depreciation)
AS-07    Construction Contracts (Construction)
AS-08    Research & Development (Withdrawn)
AS-09    Revenue Recognition (Revenue)
AS-10    Accounting for Fixed Assets (Fixed Assets)
AS-11    The Effects of Changes in Foreign Exchange Rates (Forex)
AS-12    Accounting for Fixed Assets (Fixed Assets)
AS-13    Accounting for Investments (Investment)
AS-14    Accounting for Amalgamations (Amalgamation)
AS-15    Employees Benefits (Employee)
AS-16    Borrowing Costs (Loan)
AS-17    Segment Reporting (Segment)
AS-18    Related party Disclosures (Related party)
AS-19    Leases (Leases)
AS-20    Earnings per Share (EPS)
AS-21    Consolidated Financial Statements
AS-22    Taxes on Income (DTA)
AS-23    Accounting for Investments in Associations in Consolidated Financial Statement

AS-24    Discontinuing Operations (DCO)
AS-25    Interim Financial Reporting (IFR)
AS-26    Intangible Assets (Intangible)
AS-27    Financial Reporting of Interest of Joint Ventures (Joint Venture)
AS-28    Impairment of Assets (Impairment)
AS-29    Provisions, Contingent Liabilities and Contingent Assets (Contingency)
AS-30    Financial Instruments: Recognition and Measurements (FI:Recognition)
AS-31    Financial Instruments: presentation (FI:Presentation)
AS-32    Financial Instruments: Disclosures (FI:Disclosures)



Highlights of the Bill

  • The Bill amends the Constitution to introduce the goods and services tax (GST).
  • Parliament and state legislatures will have concurrent powers to make laws on GST.  Only the centre may levy an integrated GST (IGST) on the interstate supply of goods and services, and imports.
  • Alcohol for human consumption has been exempted from the purview of GST.   GST will apply to five petroleum products at a later date.
  • The GST Council will recommend rates of tax, period of levy of additional tax, principles of supply, special provisions to certain states etc.  The GST Council will consist of the Union Finance Minister, Union Minister of State for Revenue, and state Finance Ministers.
  • The Bill empowers the centre to impose an additional tax of up to 1%, on the inter-state supply of goods for two years or more. This tax will accrue to states from where the supply originates.
  • Parliament may, by law, provide compensation to states for any loss of revenue from the introduction of GST, up to a five year period.

Key Issues and Analysis

  • An ideal GST regime intends to create a harmonised system of taxation by subsuming all indirect taxes under one tax.  It seeks to address challenges with the current indirect tax regime by broadening the tax base, eliminating cascading of taxes, increasing compliance, and reducing economic distortions caused by inter-state variations in taxes.
  • The provisions of this Bill do not fully conform to an ideal GST regime.  Deferring the levy of GST on five petroleum products could lead to cascading of taxes.
  • The additional 1% tax levied on goods that are transported across states dilutes the objective of creating a harmonised national market for goods and services.  Inter-state trade of a good would be more expensive than intra-state trade, with the burden being borne by retail consumers.  Further, cascading of taxes will continue.
  • The Bill permits the centre to levy and collect GST in the course of inter-state trade and commerce.  Instead, some experts have recommended a modified bank model for inter-state transactions to ease tax compliance and administrative burden.

An overview of Central Excise

Levy – Section 3 of CEA 1944

Section 3. Duties specified in First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 to be levied. –

(1) There shall be levied and collected in such manner as may be prescribed –
(a)  a duty of excise to be called the Central Value Added Tax (CENVAT) on all excisable goods (excluding goods produced or manufactured in special economic zones) which are produced or  manufactured in India as, and at the rates, set forth in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);
(b) a special duty of excise, in addition to the duty of excise specified in clause (a) above, on excisable goods excluding goods produced or manufactured in special economic zones specified in the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which are produced or manufactured in India, as, and at the rates, set forth in the said Second Schedule.
Provided that the duties of excise which shall be levied and collected on any excisable goods which are produced or manufactured,-
(i) Omitted.
(ii) by a hundred per cent export-oriented undertaking and brought to any other place in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under  the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwithstanding anything contained in any other provision of this Act, be determined in accordance with the provisions of the Customs Act, 1962 (52 of 1962) and the Customs Tariff Act, 1975 (51 of 1975).
Explanation 1. – Where in respect of any such like goods, any duty of customs leviable for the time being in force is leviable at different rates, then, such duty shall, for the purposes of this proviso, be deemed to be leviable at the highest of those rates.
Explanation 2. – In this proviso, –
(i)   Omitted.
(ii)  “hundred per cent export-oriented undertaking” means an undertaking which has been approved as a hundred per cent export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), and the rules made under that Act.;
(iii)  “Special Economic Zone” has the meaning assigned to it in clause (ZA) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).
(1A) The provisions of sub-section (1) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by,  or on behalf of, Government, as they apply in respect of goods which are not produced or manufactured by Government.
(2) The Central Government may, by notification in the Official Gazette, fix, for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as chargeable with duty ad valorem and may alter any tariff values for the time being in force.
(3) Different tariff values may be fixed –
(a) for different classes or descriptions of the same excisable goods; or
(b) for excisable goods of the same class or description –
(i)    produced or manufactured by different classes of producers or manufacturers; or
(ii)   sold to different classes of buyers :
Provided that in fixing different tariff values in respect of excisable goods falling under sub-clause (i) or sub-clause (ii), regard shall be had to the sale prices charged by the different classes of producers or manufacturers or, as the case may be, the normal practice of the wholesale trade in such goods