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

Meenakshi Foods Ltd's finance team is drafting its first Ind AS financial statements and wants to title the primary statements as 'Statement of Financial Position' and 'Statement of Profit or Loss and Other Comprehensive Income', as used in IAS 1, saying IAS 1 lets entities choose titles. Which statement is correct under Ind AS 1?

Ind AS 1 prescribes one terminology for all entities: Balance Sheet and Statement of Profit and Loss. The IAS 1 flexibility to choose different titles is removed, so Meenakshi Foods cannot use Statement of Financial Position or the IAS 1 combined title.

  1. AInd AS 1 uses one terminology for all entities: 'Balance Sheet' and 'Statement of Profit and Loss'Correct
  2. BEntities may choose any titles provided they are disclosed in the accounting policies
  3. CInd AS 1 requires the IAS 1 titles for entities with foreign investors
  4. DThe balance sheet title is mandatory but the profit and loss title is optional

Explanation

IAS 1 lets entities use different titles. Ind AS 1 removes this alternative and gives one terminology to be used by all entities, namely 'Balance Sheet' and 'Statement of Profit and Loss'. Paragraph 8 is retained only for numbering. Disclosing chosen titles in policies is therefore not an available route.

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