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CA Final · Financial Reporting · Financial Instruments: Disclosures

Meridian Steels Ltd is reviewing the Ind AS 107 Appendix 1 comparison to explain why its single statement of profit and loss does not carry a separate disclosure found in IFRS 7. Which reasoning matches Appendix 1?

The separate-income-statement disclosure was deleted because Ind AS 1 removed the two-statement option. Components of profit or loss and other comprehensive income must be presented as part of one statement of profit and loss, so the disclosure for a separate income statement became redundant.

  1. AThe requirement to describe gains and losses in a separate income statement was deleted, as a consequence of Ind AS 1 removing the two-statement approach, and components of profit or loss and OCI are presented in one statement of profit and lossCorrect
  2. BThe requirement was deleted because Ind AS 107 does not require any disclosure of gains or losses on financial instruments
  3. CThe requirement was retained but moved to Ind AS 101
  4. DThe requirement was deleted because Ind AS 1 allows entities to choose between one and two statements

Explanation

Appendix 1 notes that the requirement to describe gains and losses in a separate income statement was deleted as a consequence of Ind AS 1 removing the option of the two-statement approach. Ind AS 1 requires components of profit or loss and OCI to be shown in the statement of profit and loss. The last option is wrong because Ind AS 1 removed that choice.

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