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CMA Intermediate · Financial Accounting · Disclosure of Accounting Policies (AS 1)

Regarding disclosure of significant accounting policies, which statement is consistent with AS 1?

AS 1 requires that disclosure of significant accounting policies form part of the financial statements, and the list of examples of matters requiring disclosure is not exhaustive, so other significant policies must also be disclosed.

  1. ADisclosure should form part of the financial statements and the list of examples given in the standard is not exhaustiveCorrect
  2. BOnly policies that are changed during the year need disclosure
  3. CDisclosure may be made outside the financial statements, as the list of examples given is exhaustive
  4. DOnly immaterial policies are exempt, and all others need disclosure in the auditor's report only

Explanation

AS 1 requires all significant accounting policies to be disclosed, and such disclosure should form part of the financial statements. The examples of matters needing disclosure are not intended to be exhaustive. The other options contradict these statements.

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