Skip to content

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

During formulation of a new Ind AS, ICAI decides that a particular requirement should depart from an aspect of the Conceptual Framework for Financial Reporting under Ind AS, because this is needed to meet the objective of general purpose financial reporting. Kiran, a CA, reviews the standard and asks what the Conceptual Framework itself says about such a departure. Which statement is correct?

ICAI may sometimes specify requirements that depart from aspects of the Conceptual Framework in order to meet the objective of general purpose financial reporting. When it does, it explains the departure in the Appendix to the relevant Ind AS. Departure is therefore permitted and does not require prior amendment.

  1. AICAI may specify such a departure, and it will explain the departure in the Appendix to the relevant Ind ASCorrect
  2. BThe departure is invalid unless the Conceptual Framework is first amended
  3. CThe departure is permitted, but the explanation must be given in each entity's notes to accounts and not in the Ind AS
  4. DICAI may not depart from the Conceptual Framework in any circumstance because it is the foundation of all Ind AS

Explanation

The text says that, to meet the objective of general purpose financial reporting, ICAI may sometimes specify requirements that depart from aspects of the Conceptual Framework, and that it will then explain the departure in the Appendix to the relevant Ind AS. So departures are allowed and the explanation sits in the standard's Appendix. The option saying departures are never allowed is therefore wrong.

Did you get it right without looking?

One question tells you little. A timed set on Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS) shows your real accuracy, how long you take and where you lose marks.

Practise Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS)Free diagnostic mock

More Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS) questions