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CMA Intermediate · Financial Accounting · Introduction to Accounting Standards (GAAP, AS and Convergence to Ind AS)

A non-company entity that is not required to present consolidated financial statements has chosen to prepare them voluntarily. Under the applicability note in the Compendium, what follows for AS 21?

AS 21 applies. The Compendium states that such standards do not compel a non-company entity to present consolidated statements, but the relevant standard applies if the entity is required or elects to prepare them, and this entity has elected to do so.

  1. AAS 21 never applies to non-company entities
  2. BAS 21 applies because the entity elects to prepare consolidated statementsCorrect
  3. CAS 21 applies only if the entity is listed
  4. DAS 21 applies only if turnover exceeds Rs 250 crore

Explanation

The note says AS 21, 23, 27 and 25 do not require a non-company entity to present consolidated financial statements or interim reports. The relevant AS applies only if the entity is required or elects to prepare them. Here it elects, so AS 21 applies.

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