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CA Final · Financial Reporting · Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Godavari Foods Ltd's trainee states: 'Ind AS 8 uses the term Material in its own special way, defined separately within Ind AS 8.' The financial controller wants to correct this using the Standard. What is the correct position?

In Ind AS 8, the term Material has the same meaning as assigned to it in paragraph 7 of Ind AS 1. Ind AS 8 gives no separate definition, and Section 133 only concerns prescription of the Standards, so the trainee's statement is incorrect.

  1. AMaterial has the meaning assigned to it in paragraph 7 of Ind AS 1Correct
  2. BMaterial has a meaning set out only in Ind AS 8 and differs from Ind AS 1
  3. CMaterial is defined by reference to Section 133 of the Companies Act, 2013
  4. DMaterial is not defined and is left to auditors' discretion

Explanation

Ind AS 8 states that the term 'Material' used in it has the same meaning as assigned in paragraph 7 of Ind AS 1. So there is no separate Ind AS 8 definition. Section 133 relates to the prescription of Ind AS, not the definition of materiality.

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