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CMA Final · Corporate Financial Reporting · Accounting Policies, Changes in Accounting Estimates and Errors (Ind AS 8)

In the absence of an Ind AS that specifically applies to a transaction, Ind AS 8 as notified in India differs from IAS 8 in one respect regarding sources management may consult. Which is it?

Where no Ind AS specifically applies, Ind AS 8 permits management to first consider the most recent pronouncements of the International Accounting Standards Board. It does not require waiting for a new Ind AS, restricting to the Companies Act, or ignoring the transaction.

  1. AManagement may first consider the most recent pronouncements of the International Accounting Standards BoardCorrect
  2. BManagement must apply only the Companies Act, 2013 and may not consider any other framework
  3. CManagement must wait for ICAI to issue a specific Ind AS before recognising the transaction
  4. DManagement may ignore the transaction until it becomes material to the financial statements

Explanation

The comparison with IAS 8 notes that in paragraph 12 of Ind AS 8, management may first consider the most recent pronouncements of the IASB when no Ind AS applies. The other options contradict the requirement to develop an appropriate policy and are not supported by the text.

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