CMA Intermediate · Corporate Accounting and Auditing · Conceptual Framework
The ICAI issues an Ind AS whose requirement departs from an aspect of the Conceptual Framework in order to meet the objective of general purpose financial reporting. What does the Framework say will happen?
When the ICAI specifies an Ind AS requirement that departs from an aspect of the Conceptual Framework to meet the objective of general purpose financial reporting, it explains the departure in the Appendix to the relevant Ind AS. Entities do not explain it, and the Ind AS requirement still applies.
- AThe departure need not be explained anywhere
- BThe Framework is automatically amended and the Ind AS is withdrawn
- CThe ICAI will explain the departure in the Appendix to the relevant Ind ASCorrect
- DThe departure is explained by each reporting entity in its notes to accounts
Explanation
Paragraph SP1.3 says that, to meet the objective, the ICAI may specify requirements that depart from aspects of the Framework, and if so it will explain the departure in the Appendix to the relevant Ind AS. The entity does not make the explanation, and no automatic amendment occurs. Because the Framework does not override Ind AS, the Ind AS requirement still applies.
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