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

Arjun Industries Ltd's accountant argues that a policy based on the Conceptual Framework should be followed for the treatment of a particular item, although a specific Ind AS requirement on that item gives a different treatment. The CFO also notes that the Ind AS allows a choice between two policies. Which conclusion is consistent with the Framework's stated status and purpose?

The Ind AS requirement prevails because the Conceptual Framework is not an Ind AS and nothing in it overrides any Ind AS requirement. However, where an Ind AS allows a choice of accounting policy, the Framework may help the preparer develop a consistent policy.

1. AFollow the Framework's concept because it prevails over the Ind AS requirement; it also cannot be used to choose between the two permitted policies
2. BFollow the Ind AS requirement because nothing in the Framework overrides any Ind AS; the Framework may however help the company develop a consistent policy when choosing between the policies the Ind AS allowsCorrect
3. CFollow the Ind AS requirement, and the Framework has no role even where the Ind AS allows a choice of policy
4. DFollow the Framework because the ICAI will always explain any difference in the Appendix to the Ind AS, so the company may depart on its own