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CA Intermediate · Advanced Accounting · AS 1 Disclosure of Accounting Policies

Under AS 1, which statement about where accounting policies are disclosed is correct for Mehta Steels Ltd.?

All significant accounting policies adopted in preparing financial statements should be disclosed, forming part of the financial statements and normally shown together in one place. They are not confined to the Directors' Report or only to policies that changed.

  1. AAccounting policies may be scattered across the notes without any single place
  2. BAll significant accounting policies should be disclosed as one part of the financial statements, normally in one placeCorrect
  3. CPolicies need be disclosed only if they differ from the previous year
  4. DPolicies are to be disclosed only in the Directors' Report

Explanation

AS 1 requires disclosure of all significant accounting policies adopted in preparing and presenting the financial statements. This disclosure should form part of the financial statements and normally be in one place. Options A and D conflict with this.

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