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CA Final · Financial Reporting · Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Sundaram Textiles Ltd is reviewing its financial reporting policies under Ind AS. The finance head describes the following as 'accounting policies': (A) the specific principles, bases, conventions, rules and practices applied in preparing and presenting financial statements; (B) a monetary amount in the financial statements subject to measurement uncertainty. Which of the following correctly matches the definitions in Ind AS 8?

Statement A defines accounting policies, being the specific principles, bases, conventions, rules and practices applied in preparing and presenting financial statements. Statement B defines accounting estimates, which are monetary amounts in financial statements subject to measurement uncertainty. Therefore A matches policies and B matches estimates under Ind AS 8.

  1. AA is the definition of accounting policies and B is the definition of accounting estimatesCorrect
  2. BA is the definition of accounting estimates and B is the definition of accounting policies
  3. CBoth A and B define accounting policies
  4. DBoth A and B define accounting estimates

Explanation

Ind AS 8 defines accounting policies as the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. Accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. Hence A is accounting policies and B is accounting estimates; the reversed option swaps the definitions.

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