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

Ind AS 8 refers to the term 'Material'. Arjun Pharma Ltd is assessing whether an omitted disclosure about a change in policy is material for its Ind AS financial statements. Which statement correctly reflects the meaning of 'Material' for Ind AS 8?

In Ind AS 8, 'Material' has the same meaning as assigned to it in paragraph 7 of Ind AS 1. The standard does not set a fixed percentage or monetary threshold, and it does not borrow a definition from tax law or define the term separately.

  1. AIt has the meaning assigned in paragraph 7 of Ind AS 1Correct
  2. BIt means any amount exceeding 5% of profit before tax in every case
  3. CIt has the meaning given in the Income-tax Act, 1961
  4. DIt is defined separately within Ind AS 8 with a fixed monetary threshold

Explanation

The text states that the term Material used in Ind AS 8 has the same meaning as assigned to it in paragraph 7 of Ind AS 1. No fixed percentage or tax-law definition is given, and Ind AS 8 does not define it independently.

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