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CA Final · Financial Reporting · Introduction to Indian Accounting Standards

Sagar Pharma Ltd (Ind AS applicable) is preparing financial statements. Which of the following is a feature of the Ind AS framework in India as distinct from the IFRS issued by the IASB?

Ind AS are notified by the Ministry of Corporate Affairs and are converged with, but not identical to, IFRS. They include carve-outs from IFRS made to suit Indian legal and economic conditions, so they are not a word-for-word adoption of the IASB standards.

  1. AInd AS are issued directly by the IASB and adopted in India without any change
  2. BInd AS are notified by the Ministry of Corporate Affairs and contain certain carve-outs from IFRS to suit Indian conditionsCorrect
  3. CInd AS allow no departure from IFRS because India is a signatory that has fully adopted IFRS
  4. DInd AS are issued by the Institute of Chartered Accountants of India and are not mandatory under company law

Explanation

Ind AS are converged with IFRS, not identical to it. They are notified by the MCA on the recommendation of NFRA, and include carve-outs, for example in Ind AS 40 or Ind AS 103 and the treatment of certain items, to address Indian conditions. Hence the statement about MCA notification and carve-outs is correct.

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