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

Under Ind AS 8, the term 'material' has the meaning given in Ind AS 1. Where in Ind AS 8 the entity has no Ind AS that specifically applies to a transaction, management may first consider which of the following in exercising judgement?

Management may first consider the most recent pronouncements of the International Accounting Standards Board. Ind AS 8 names this source where no Ind AS specifically applies. Peer practice, tax return treatment or shareholder preference are not the sources the Standard points to for this judgement.

  1. AThe most recent pronouncements of the International Accounting Standards BoardCorrect
  2. BOnly the practices followed by the largest listed Indian company in the industry
  3. CThe tax treatment prescribed in the income-tax return
  4. DThe preference of the majority shareholders

Explanation

Ind AS 8, in the absence of an Ind AS, lets management first consider the most recent pronouncements of the International Accounting Standards Board in making its judgement. The other sources are not named for this purpose and none gives the required basis for relevance and reliability.

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