Skip to content

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

Kaveri Pharma Ltd prepares financial statements under Ind AS. Its accountant proposes presenting profit or loss in a separate statement, followed immediately by a second statement beginning with profit and showing other comprehensive income, as IAS 1 allows. What is the correct position under Ind AS 1?

Ind AS 1 allows only the single statement approach, in which the Statement of Profit and Loss presents profit or loss and other comprehensive income together. The two-statement option available under IAS 1 has been removed, so Kaveri Pharma cannot use it.

  1. AEither the one-statement or two-statement approach may be chosen by the entity
  2. BThe two-statement approach is allowed only for entities with material OCI items
  3. COnly the single statement approach is allowed, so the Statement of Profit and Loss includes OCICorrect
  4. DThe two-statement approach is mandatory for listed entities

Explanation

Per the comparison with IAS 1, IAS 1 gives an option between single and two statement approaches, but Ind AS 1 allows only the single statement approach and paragraph 10A was modified accordingly. The two-statement proposal is therefore not permitted, regardless of OCI materiality.

Did you get it right without looking?

One question tells you little. A timed set on Ind AS 1 Presentation of Financial Statements shows your real accuracy, how long you take and where you lose marks.

Practise Ind AS 1 Presentation of Financial StatementsFree diagnostic mock

More Ind AS 1 Presentation of Financial Statements questions