CS Executive · Corporate Accounting and Financial Management · Accounting Standards
A preparer finds that no Ind AS applies to a particular transaction of Sundaram Textiles Ltd. Which statement best reflects the role of the Conceptual Framework under Ind AS in this situation?
The Conceptual Framework assists preparers in developing consistent accounting policies when no Ind AS applies to a transaction or event, or when an Ind AS permits a choice. It does not require leaving the transaction unrecorded or using cash accounting.
- AIt assists the preparer in developing consistent accounting policies for that transactionCorrect
- BIt requires the preparer to leave the transaction unrecorded until an Ind AS is issued
- CIt requires the preparer to follow cash accounting for the transaction
- DIt makes the preparer's choice of policy irrelevant because ICAI will decide it later
Explanation
One stated purpose of the Framework is to assist preparers in developing consistent accounting policies when no Ind AS applies to a transaction or other event, or when an Ind AS allows a choice of policy. It does not require omission of the transaction or a switch to cash accounting, both of which would conflict with the accrual concept described in it.
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