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CA Intermediate · Advanced Accounting · Applicability of Accounting Standards

Anand Pharma Ltd, a company with turnover Rs 300 crore, is listed on a stock exchange. Which of the following is true about applying Accounting Standards to its consolidated financial statements?

Anand Pharma is a Level I entity because it is listed and its turnover exceeds Rs 250 crore. It must therefore comply in full with all Accounting Standards, including segment reporting under AS 17 and earnings per share under AS 20, without any exemption.

  1. AIt is Level I and must apply all Accounting Standards in full, including AS 17 and AS 20Correct
  2. BIt is Level II and may skip AS 17
  3. CIt is Level III and may skip AS 20
  4. DIt may follow only recognition principles, not disclosure norms

Explanation

A listed company with turnover above Rs 250 crore is a Level I entity. Level I entities must comply fully with all Accounting Standards, including AS 17 Segment Reporting and AS 20 Earnings Per Share, which apply to listed or to-be-listed entities. Options naming Level II or III are wrong because listing alone fixes Level I.

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