Skip to content

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

Kaveri Pharma Ltd. operates in India and prepares Ind AS financial statements. Ind AS has no standard that specifically applies to a transaction involving a new type of carbon-credit arrangement. Management wants to develop a policy for it. Per the official text of Ind AS 8 given, which statement is correct about management's reference to International Accounting Standards Board literature?

In the absence of a specific Ind AS, management may first consider the most recent pronouncements of the International Accounting Standards Board. This is permissive, not compulsory and not prohibited, and no ICAI approval is required to consider them when developing a policy.

  1. AManagement must apply IASB pronouncements in preference to any Ind AS
  2. BManagement may first consider the most recent pronouncements of the International Accounting Standards Board in the absence of an Ind ASCorrect
  3. CManagement is prohibited from looking at any IASB pronouncement
  4. DManagement must obtain ICAI approval before considering IASB pronouncements

Explanation

Paragraph 12 of Ind AS 8, as noted in the comparison with IAS 8, says that in the absence of an Ind AS, management may first consider the most recent pronouncements of the IASB. It is permissive, not mandatory, and does not require approval or prohibit reference. Hence the second statement is right.

Did you get it right without looking?

One question tells you little. A timed set on Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors shows your real accuracy, how long you take and where you lose marks.

Practise Ind AS 8 Accounting Policies, Changes in Accounting Estimates and ErrorsFree diagnostic mock

More Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors questions