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CA Final · Financial Reporting · Ind AS 1 Presentation of Financial Statements

Himalaya Textiles Ltd, an Indian company reporting under Ind AS, is preparing its financial statements. The finance head suggests (a) calling the primary statement 'Statement of Financial Position' and (b) presenting profit or loss in one statement and comprehensive income in a separate following statement. Which approach is consistent with Ind AS 1 as notified in India?

Ind AS 1 prescribes one terminology, so the entity must use 'Balance Sheet' and 'Statement of Profit and Loss'. It permits only the single statement approach, with other comprehensive income inside that statement. The IAS 1 options on titles and a separate two-statement presentation were removed for Indian reporting.

  1. ABoth titles and the two-statement approach are permitted as alternatives
  2. BUse 'Balance Sheet' and a single Statement of Profit and Loss including other comprehensive incomeCorrect
  3. CUse 'Statement of Financial Position' with a single statement approach
  4. DUse 'Balance Sheet' but choose between single or two statement approach

Explanation

Ind AS 1 removes the IAS 1 alternatives on terminology and uses 'balance sheet' and 'Statement of Profit and Loss'. It allows only the single statement approach, so the two-statement option in IAS 1 is not available. The option allowing a choice of approach is wrong because paragraph 10A was modified to remove it.

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