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CMA Final · Corporate Financial Reporting · Accounting Policies, Changes in Accounting Estimates and Errors (Ind AS 8)

As defined in Ind AS 8, which of the following is an 'accounting estimate'?

Under Ind AS 8, an accounting estimate is a monetary amount in the financial statements that is subject to measurement uncertainty. The description of principles, bases and practices defines accounting policies, not estimates, and the other options describe Ind ASs and errors respectively.

  1. AA monetary amount in financial statements that is subject to measurement uncertaintyCorrect
  2. BThe specific principles, bases, conventions, rules and practices applied in preparing financial statements
  3. CA standard prescribed under Section 133 of the Companies Act, 2013
  4. DAn omission from financial statements arising from failure to use reliable information

Explanation

Ind AS 8 defines accounting estimates as monetary amounts in financial statements subject to measurement uncertainty. The second option is the definition of accounting policies, the third describes Ind ASs, and the fourth describes a prior period error, so each is a different term.

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