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CMA Final · Corporate Financial Reporting · Accounting Policies, Changes in Accounting Estimates and Errors (Ind AS 8)

Meera Auto Ltd wants to know what meaning of 'material' applies when it applies Ind AS 8. Which is correct?

Under Ind AS 8, the word material carries the same meaning as given in paragraph 7 of Ind AS 1. The standard does not set its own numerical threshold, nor does it leave the term undefined for management to decide.

  1. AInd AS 8 gives its own separate numerical threshold for materiality
  2. BThe term has the same meaning as assigned to it in paragraph 7 of Ind AS 1Correct
  3. CThe term has the meaning given in Section 133 of the Companies Act, 2013
  4. DThe term is left undefined, so management chooses a meaning

Explanation

Ind AS 8 states that 'Material' has the same meaning as in paragraph 7 of Ind AS 1. It sets no numerical threshold of its own, and section 133 deals with prescribing Ind AS, not defining materiality.

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