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CMA Foundation · Fundamentals of Financial and Cost Accounting · Four Frameworks of Accounting and Forms of Organization

Under the Ind AS framework converged with IFRS, which statement about Ind AS 1 on presentation of financial statements is correct?

Under Ind AS 1, a complete set of financial statements comprises the balance sheet, statement of profit and loss, statement of changes in equity, statement of cash flows and notes, along with comparative information. The statement of changes in equity is a mandatory component, not optional.

  1. AA complete set of financial statements includes a statement of profit and loss and a balance sheet, but no statement of changes in equity
  2. BA complete set includes a balance sheet, statement of profit and loss, statement of changes in equity, statement of cash flows and notesCorrect
  3. COnly listed companies must prepare a statement of cash flows, while all others are exempt
  4. DFinancial statements need only show current year figures, with comparatives shown only if the auditor asks

Explanation

Ind AS 1 requires a balance sheet, a statement of profit and loss (including other comprehensive income), a statement of changes in equity, a statement of cash flows and notes. Comparative information for the previous period is also required. The option excluding the statement of changes in equity is wrong because that statement is a mandatory component.

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