ACCA Applied Knowledge · Financial Accounting · The regulatory framework
A company wishes to describe its financial statements as 'prepared in accordance with IFRS Accounting Standards'. Which of the following is the only circumstance in which it may do so?
A company may claim IFRS compliance only when it complies with all requirements of every applicable standard and interpretation. Following only the most relevant standards, or just the Conceptual Framework, is not sufficient, because the Framework does not override the standards.
- AIt complies with all the requirements of every applicable standard and interpretationCorrect
- BIt complies with all recognition and measurement requirements but omits disclosure notes it considers immaterial to its own users, without applying materiality
- CIt complies with the standards most relevant to its industry
- DIt complies with the Conceptual Framework only
Explanation
An explicit and unreserved statement of IFRS compliance requires compliance with all applicable standards and interpretations. Selective compliance is not enough. The Conceptual Framework is not a standard and does not override standards. Omitting disclosures is allowed only where truly immaterial, not by choice, so that option does not describe full compliance.
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