Skip to content

CA Final · Financial Reporting · Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS)

Surya Infra Ltd is a listed Ind AS company. Its board discusses a new standard issued by ICAI whose requirement conflicts with a concept stated in the Conceptual Framework. The finance head proposes to follow the Framework concept in the financial statements because it was applicable to preparers from April 1, 2021, and the standard was issued later. The audit committee chair asks for the correct position. Which view is correct?

The company must follow the new Ind AS. The Conceptual Framework is not an Ind AS, and nothing in it overrides any Ind AS requirement. If ICAI intentionally departed from the Framework, it explains that departure in the Appendix to the Ind AS.

  1. AFollow the Framework, because the Framework is a later-applicable document for preparers than the standard
  2. BFollow the Framework, because ICAI's departures are valid only for standard setting and not for preparers
  3. CFollow the new Ind AS, because the Framework is not an Ind AS and nothing in it overrides any Ind AS requirement; any intentional departure is explained in the Ind AS AppendixCorrect
  4. DChoose between the two on materiality, since the Framework and the Ind AS have equal authority

Explanation

The Framework states it is not an Ind AS and nothing in it overrides any Ind AS or requirement. ICAI may deliberately depart from it and will explain this in the Appendix to the relevant Ind AS. The applicability date of the Framework for preparers does not give it priority over a standard. Equal authority is wrong for the same reason.

Did you get it right without looking?

One question tells you little. A timed set on Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS) shows your real accuracy, how long you take and where you lose marks.

Practise Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS)Free diagnostic mock

More Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS) questions