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CA Intermediate · Advanced Accounting · AS 1 Disclosure of Accounting Policies

Gomti Pharma Ltd. discloses its significant accounting policies in Note 1 to its financial statements. Which of the following statements about the disclosure of accounting policies is correct under AS 1?

AS 1 requires significant accounting policies to be disclosed as part of the financial statements, and ordinarily in one place. Scattering them, limiting disclosure to changed policies, or treating it as optional does not comply with the standard.

  1. APolicies may be disclosed in any manner, including scattered across the directors' report
  2. BSignificant accounting policies should form part of the financial statements and be disclosed in one placeCorrect
  3. COnly policies differing from the previous year need to be disclosed
  4. DPolicy disclosure is optional if the notes already show the figures

Explanation

AS 1 requires that all significant accounting policies adopted in the preparation and presentation of financial statements be disclosed, forming part of the financial statements, and ordinarily disclosed in one place. Disclosure only of changed policies or in the directors' report does not satisfy the standard.

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