ABSTRACT:

From the independence the Companies Act, 1956 (“1956 Act”) has been in existence, the corporate and business environment has evolved significantly and hence there was a need to revamp the legislation governing companies. The Companies Act, 2013 (“Act of 2013”) was enacted on 29th August 2013 after President’s assent; however, it will come into effect only upon the notification by the Central Government. The exposure draft of the rules pertaining to the Act of 2013 is expected to be out for public comments very soon.

                The Act of 2013 is more of a rule-based legislation containing only 470 sections, which means that the substantial part of the legislation will be in the form of rules. It is expected that the Act of 2013 will become applicable and the corresponding portion of 1956 Act will be repealed in a phased manner.

                The Act of 2013 intends to promote self-regulation and has also introduced some progressive concepts like One- Person Company, Small Company, Dormant Company, E-governance, etc. The concept of Corporate Social Responsibility has also been introduced to encourage a socially, environmentally and ethically responsible behavior by companies.

Taking into account, the need of the hour, Accounting Standards Board (ASB) also tries to adopt International Accounting Standards/International Financial Reporting Standards. The Board is continuously issuing accounting standards in various areas as applicable to business houses. Thus the present research paper performs an comparative analysis of various facts and figures related with accounting treatment under companies act 1956 and 2013.

Key Words:  Accounting, Financial Ratio Analysis, Liquidity ratio, Comparative study, Petroleum industry.