CMA Intermediate · Corporate Accounting and Auditing · Conceptual Framework
Mehta Textiles Ltd's accountant argues that the Conceptual Framework permits ignoring a specific Ind AS requirement because the Framework's concepts give a more faithful picture. What is the correct position under the Framework's status?
The Conceptual Framework is not itself an Ind AS, and nothing in it overrides any Ind AS or any requirement within an Ind AS. So Mehta Textiles must follow the specific Ind AS requirement even if the accountant feels the Framework's concepts suggest a better treatment.
- AThe Framework prevails over the Ind AS when the two conflict
- BThe Framework is not an Ind AS and nothing in it overrides any Ind AS or any requirement in an Ind ASCorrect
- CThe Framework prevails only where the Ind AS gives the company a choice of policy and the auditor agrees
- DThe Framework prevails if the company's management considers the Ind AS to be outdated
Explanation
Paragraph SP1.2 says the Framework is not an Ind AS and nothing in it overrides any Ind AS or requirement in an Ind AS. The accountant must therefore follow the Ind AS. The option that lets the Framework prevail is the reverse of the stated rule.
Did you get it right without looking?
One question tells you little. A timed set on Conceptual Framework shows your real accuracy, how long you take and where you lose marks.
More Conceptual Framework questions
- Sundaram Traders defers Rs 2,00,000 of staff training costs as an asset, arguing that this matches the cost with the benefits expected in fu…
- A company reports in the currency of a hyperinflationary economy. How does the Conceptual Framework's stance on the accounting model apply t…
- The ICAI issues an Ind AS whose requirement departs from an aspect of the Conceptual Framework in order to meet the objective of general pur…
- A company's management says that a certain Ind AS requirement conflicts with a qualitative characteristic in the Conceptual Framework, so it…
- Following a revision of the Conceptual Framework by the ICAI, a company argues that its measurement basis for an asset must change immediate…
- Which of the following is an enhancing qualitative characteristic of useful financial information under the Conceptual Framework under Ind A…