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CMA Intermediate · Corporate Accounting and Auditing · Presentation of Financial Statements (Ind AS 1)

A diversified Indian group has a manufacturing division and a finance division. Under Ind AS 1, which presentation is permitted in its balance sheet?

A mixed basis is permitted. Ind AS 1 allows an entity to present some assets and liabilities on a current/non-current basis and others in order of liquidity when that is reliable and more relevant, as may occur when it has diverse operations.

  1. ASome assets and liabilities may use current/non-current classification while others are shown in order of liquidity, if this gives reliable and more relevant informationCorrect
  2. BOnly a single basis may ever be used across the whole balance sheet
  3. CLiquidity order must be used for the manufacturing division and current/non-current for the finance division, as a fixed rule
  4. DA mixed basis is allowed only when approved by the Registrar of Companies

Explanation

Paragraph 64 permits some assets and liabilities to be presented using current/non-current classification and others in order of liquidity when this provides reliable and more relevant information. The need for a mixed basis may arise when the entity has diverse operations. No fixed division-wise rule or external approval is stated.

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