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CMA Intermediate · Corporate Accounting and Auditing · Provisions, Contingent Liabilities and Contingent Assets (Ind AS 37)

Meera Pharma Ltd's liability arises from an item that is specifically dealt with by another Ind AS. Under the scope of Ind AS 37, what is the correct approach?

Ind AS 37 does not apply to an item covered by another Standard. The scope paragraph expressly excludes those items, so the specific Ind AS dealing with the item governs its recognition and measurement.

  1. AInd AS 37 does not apply; the other Standard governs the itemCorrect
  2. BInd AS 37 applies in addition to the other Standard
  3. CInd AS 37 applies only if the amount exceeds materiality
  4. DInd AS 37 applies only to disclosure, not to recognition

Explanation

The scope excludes provisions, contingent liabilities and contingent assets covered by another Standard. Hence the other Standard governs the item, and Ind AS 37 is not applied to it.

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