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CA Final · Financial Reporting · Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS)

Ananya, a finance manager at Bharat Steel Ltd, explains to new staff why the Ind AS Conceptual Framework exists. Which of the following is one of the stated purposes of the Conceptual Framework?

One stated purpose of the Conceptual Framework is to assist all parties to understand and interpret the Ind ASs. It also helps ICAI formulate consistent standards and helps preparers develop consistent policies, but it does not replace Ind AS or prescribe audit procedures.

  1. ATo prescribe the detailed measurement bases for every class of asset
  2. BTo assist all parties to understand and interpret the Ind ASsCorrect
  3. CTo replace the need for Ind AS in industries with complex transactions
  4. DTo set the audit procedures for verifying Ind AS financial statements

Explanation

The stated purposes are to assist ICAI in formulating Ind ASs based on consistent concepts, to assist preparers in developing consistent accounting policies, and to assist all parties in understanding and interpreting Ind ASs. It does not prescribe detailed measurement for every asset, replace Ind AS, or set audit procedures.

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