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CMA Intermediate · Corporate Accounting and Auditing · Presentation of Financial Statements (Ind AS 1)

Entity P concludes that complying with an Ind AS requirement would be misleading. Other entities in similar circumstances comply with that requirement. When management assesses whether compliance would conflict with the objective of financial statements, what is the position under Ind AS 1?

Because other entities in similar circumstances comply with the requirement, there is a rebuttable presumption that Entity P's compliance would not be so misleading that it conflicts with the objective of financial statements. Management must consider why the objective is not met and how its circumstances differ.

  1. AThere is a rebuttable presumption that P's compliance would not be so misleading as to conflict with the objectiveCorrect
  2. BThere is a conclusive presumption that P must depart from the requirement
  3. CThere is no presumption, because P's circumstances are always unique
  4. DThere is a rebuttable presumption that P must depart, because management has formed a view

Explanation

Management considers why the objective is not achieved in the circumstances and how its circumstances differ from other entities that comply. If other entities in similar circumstances comply, there is a rebuttable presumption that compliance would not be so misleading as to conflict with the objective. The presumption is rebuttable, so it is not conclusive, and it points toward compliance, not departure.

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