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CMA Intermediate · Corporate Accounting and Auditing · Presentation of Financial Statements (Ind AS 1)

Sunrise Textiles Ltd prepares financial statements that comply with most Ind ASs but has not applied one applicable Ind AS requirement, without invoking any departure for true and fair view. What does Ind AS 1 say about describing its statements?

The company must not describe its statements as complying with Ind AS, because an entity can make that claim only when it complies with all the requirements of Ind ASs. Partial compliance, disclosure of the lapse or auditor agreement does not permit an unreserved compliance statement.

  1. AIt may state compliance with Ind AS if the departure is immaterial to profit only
  2. BIt may state compliance with Ind AS if the notes disclose the non-compliance
  3. CIt must not describe the statements as complying with Ind AS unless all requirements of Ind AS are metCorrect
  4. DIt may state compliance with Ind AS if the auditor agrees to the departure

Explanation

Paragraph 16 says an entity shall not describe financial statements as complying with Ind ASs unless they comply with all the requirements of Ind ASs. Disclosure or auditor consent does not change this.

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