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CMA Intermediate · Corporate Accounting and Auditing · Conceptual Framework

The ICAI specifies in an Ind AS a measurement requirement that departs from an aspect of the Conceptual Framework in order to meet the objective of general purpose financial reporting. What will the ICAI do about the departure?

When the ICAI sets a requirement that departs from an aspect of the Conceptual Framework, it explains the departure in the Appendix to the relevant Ind AS. The framework is not automatically amended, and entities are not told to disclose the departure themselves.

  1. AExplain the departure in the Appendix to the relevant Ind ASCorrect
  2. BAmend the Conceptual Framework immediately and automatically
  3. CLeave the departure unexplained since the Ind AS prevails
  4. DRequire entities to disclose the departure in each balance sheet

Explanation

Paragraph SP1.3 says the ICAI may sometimes specify requirements departing from aspects of the Conceptual Framework, and if so it will explain the departure in the Appendix to the relevant Ind AS. Revisions to the framework do not automatically change Ind ASs, and the reverse is not stated to be automatic either. No entity-level disclosure duty is stated.

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