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

Meenakshi Retail Ltd states in the notes to its Ind AS financial statements that 'materiality' for Ind AS 8 purposes has been assessed by the management. Which source determines the meaning of 'material' when applying Ind AS 8?

The meaning of material in Ind AS 8 is the same as assigned in paragraph 7 of Ind AS 1. Ind AS 8 gives no separate definition or fixed percentage of profit, and the Income-tax Act plays no role in defining materiality for financial reporting.

  1. AThe meaning in paragraph 7 of Ind AS 1Correct
  2. BA separate definition given only within Ind AS 8
  3. CThe materiality threshold in the Income-tax Act, 1961
  4. DA fixed percentage of profit prescribed in Ind AS 8

Explanation

Ind AS 8 states that the term 'Material' has the same meaning as assigned to it in paragraph 7 of Ind AS 1. It does not give its own separate definition or any fixed percentage threshold. Tax law has no role in defining it.

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