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CMA Final · Corporate Financial Reporting · Accounting Policies, Changes in Accounting Estimates and Errors (Ind AS 8)

Under Ind AS 8, an accounting estimate is best described as:

An accounting estimate is a monetary amount in the financial statements that is subject to measurement uncertainty, such as an allowance for doubtful debts. Principles, bases and conventions are accounting policies, which are distinct from estimates under Ind AS 8.

  1. AA specific principle or convention applied in preparing financial statements
  2. BA monetary amount in the financial statements that is subject to measurement uncertaintyCorrect
  3. CA prior period omission arising from failure to use reliable information
  4. DA Standard prescribed under the Companies Act, 2013

Explanation

Ind AS 8 defines accounting estimates as monetary amounts in financial statements that are subject to measurement uncertainty. Specific principles and conventions are accounting policies, so the first option is wrong.

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