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

Meridian Infra Ltd's accountant says: 'The Conceptual Framework is meant only to help ICAI write standards, so it cannot guide us when an Ind AS allows a choice of accounting policy, and where it conflicts with an Ind AS we may follow the framework if it gives a better result.' Which assessment is correct?

Both claims are wrong. The Conceptual Framework also assists preparers in developing consistent policies when no Ind AS applies or when an Ind AS allows a choice of policy. However, it never overrides any Ind AS or its requirements, so a conflicting framework treatment cannot be followed.

  1. ABoth parts are correct
  2. BThe first part is correct, the second is incorrect
  3. CThe first part is incorrect because the framework also assists preparers when an Ind AS allows a choice of policy; the second is incorrect because no Ind AS requirement is overridden by the frameworkCorrect
  4. DThe first part is incorrect, but the second is correct because the framework prevails where it gives a better result

Explanation

The framework's purposes include assisting preparers to develop consistent accounting policies when no Ind AS applies or when an Ind AS allows a choice. So the first claim is wrong. Nothing in it overrides any Ind AS requirement, so following the framework against a standard is also wrong.

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