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

Tarang Textiles Ltd is preparing its first Ind AS financial statements. Its finance head claims that, because the Conceptual Framework for Financial Reporting under Ind AS describes the concepts of general purpose financial reporting, a Conceptual Framework concept may be used to override a specific recognition requirement of an applicable Ind AS where he thinks the concept gives a better result. According to the Conceptual Framework's own statement of status, which position is correct?

The Conceptual Framework is not an Ind AS, and nothing in it overrides any Ind AS or any requirement within an Ind AS. A specific standard's requirement therefore prevails over a framework concept, so the finance head cannot use a concept to set aside an applicable recognition requirement.

1. AThe Conceptual Framework is not an Ind AS, and nothing in it overrides any Ind AS or any requirement in an Ind ASCorrect
2. BThe Conceptual Framework overrides an Ind AS whenever the entity's auditor agrees that the concept gives a fairer presentation
3. CThe Conceptual Framework overrides an Ind AS only for entities whose net worth is above the prescribed threshold
4. DThe Conceptual Framework is itself an Ind AS and ranks equally with other Ind AS, so the entity may choose between them