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CMA Intermediate · Corporate Accounting and Auditing · Presentation of Financial Statements (Ind AS 1)

Under Ind AS 1, financial statements are required to present a true and fair view. Which statement correctly reflects the standard on this requirement?

A true and fair view needs faithful representation of transactions, events and conditions under the Conceptual Framework definitions and recognition criteria. Applying Ind ASs, with additional disclosure when necessary, is presumed to produce financial statements that present a true and fair view of position, performance and cash flows.

  1. APresenting a true and fair view requires faithful representation of the effects of transactions, events and conditions as per the Conceptual Framework definitions and recognition criteria; applying Ind ASs with additional disclosure where necessary is presumed to achieve thisCorrect
  2. BPresenting a true and fair view requires the entity to ignore the Conceptual Framework definitions of assets and liabilities
  3. CApplying Ind ASs is presumed to give a true and fair view only if no additional disclosure is ever made
  4. DA true and fair view is achieved only when the entity departs from at least one Ind AS requirement

Explanation

The standard links true and fair view to faithful representation under the Conceptual Framework definitions and recognition criteria for assets, liabilities, income and expenses. Application of Ind ASs, with additional disclosure when necessary, is presumed to result in a true and fair view. The distractor on disclosure reverses this, as additional disclosure is allowed when necessary.

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