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

Aarav Pharma Ltd departs from an Ind AS requirement because following it would be so misleading as to conflict with the objective of financial statements. Which of the following must be disclosed under Ind AS 1 as part of the departure disclosures?

The entity must disclose the financial effect of the departure on each affected item for each period presented. This is in addition to the Ind AS title, nature of the departure, reason and treatment adopted. Current-period or total-profit-only disclosure is inadequate.

  1. AOnly the title of the Ind AS and the treatment adopted
  2. BThe financial effect of the departure on each affected item for each period presentedCorrect
  3. CThe financial effect for the current period only, in total profit
  4. DThe name of the director who approved the departure

Explanation

Paragraph 20(d) requires disclosure, for each period presented, of the financial effect of the departure on each item that would have been reported had the requirement been complied with. Title alone is insufficient, and the effect is not limited to the current period or total profit.

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