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CMA Intermediate · Corporate Accounting and Auditing · Conceptual Framework

A company's management says that a certain Ind AS requirement conflicts with a qualitative characteristic in the Conceptual Framework, so it will follow the Framework instead. What is the correct position?

The Ind AS prevails. The Conceptual Framework is not itself an Ind AS, and nothing in it overrides any Ind AS or any requirement within an Ind AS. So the company cannot choose the Framework's qualitative characteristics over a specific Ind AS requirement.

  1. AThe Framework prevails because it contains the fundamental concepts
  2. BThe Framework prevails if the departure improves comparability
  3. CThe Framework prevails only for items that are material
  4. DThe Ind AS prevails because the Framework is not an Ind AS and does not override any Ind AS requirementCorrect

Explanation

Paragraph SP1.2 states that the Conceptual Framework is not an Ind AS and nothing in it overrides any Ind AS or any requirement in an Ind AS. Hence the company must follow the Ind AS, whatever the qualitative characteristics suggest.

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