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CA Final · Financial Reporting · Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS)

Meera Pharma Ltd.'s management made the following statements about the Conceptual Framework for Financial Reporting under Ind AS, while reviewing its accounting policy manual. (i) It helps all parties understand and interpret Ind AS. (ii) It can be applied when an Ind AS allows a choice of accounting policy, to help preparers develop a consistent policy. (iii) In a conflict with an Ind AS, the entity may follow the Framework if it considers the result more faithful. (iv) It contributes to accountability by reducing the information gap between capital providers and those entrusted with their money. Which combination is correct?

Statements (i), (ii) and (iv) are correct: the Framework helps parties understand Ind AS, helps preparers develop consistent policies where Ind AS allows a choice, and strengthens accountability. Statement (iii) is wrong because nothing in the Framework overrides any Ind AS or its requirements.

  1. A(i), (ii) and (iii) only
  2. B(ii), (iii) and (iv) only
  3. C(i), (ii) and (iv) onlyCorrect
  4. D(i), (iii) and (iv) only

Explanation

Statements (i), (ii) and (iv) reflect the stated purposes and contributions of the Framework. Statement (iii) is wrong because nothing in the Framework overrides any Ind AS or any requirement in an Ind AS. Options including (iii) therefore fail.

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