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CA Final · Financial Reporting · Financial Instruments: Disclosures

Sagar Textiles Ltd is preparing its first Ind AS 107 disclosures. The finance manager notes that IFRS 7 presents gains and losses in a separate income statement where a two-statement approach is used. As per the comparison of Ind AS 107 with IFRS 7, why are the requirements for describing gains and losses presented in a separate income statement deleted in Ind AS 107?

The requirement was deleted because Ind AS 1 no longer allows the two-statement approach. Components of profit or loss and other comprehensive income must be presented within a single statement of profit and loss, so describing gains and losses in a separate income statement is irrelevant in Ind AS 107.

  1. ABecause Ind AS 1 removed the two-statement option and requires profit or loss and OCI components to be presented in one statement of profit and lossCorrect
  2. BBecause Ind AS 107 applies only to financial instruments measured at amortised cost
  3. CBecause separate income statements are permitted only for banks under Ind AS
  4. DBecause disclosure of gains and losses is now covered only under Ind AS 109

Explanation

The comparison with IFRS 7 states the deletion is consequential to removal of the two-statement approach option in Ind AS 1. Ind AS 1 requires components of profit or loss and OCI to be presented as part of the statement of profit and loss. The other options give reasons that are not stated in the comparison.

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