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CA Final · Financial Reporting · Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Veda Textiles Ltd is preparing its financial statements under Ind AS. For a specific transaction, no Ind AS applies directly, and the management wants to refer to external guidance. Based on the comparison of Ind AS 8 with IAS 8, which source may management first consider under the absence of an applicable Ind AS?

Where no Ind AS applies to a transaction, Ind AS 8 permits management to first consider the most recent pronouncements of the International Accounting Standards Board. This is the Indian-specific wording noted in the comparison with IAS 8, so competitor practice, tax law or board preference do not take precedence.

  1. AThe most recent pronouncements of the International Accounting Standards BoardCorrect
  2. BOnly the accounting practices followed by the largest competitor in India
  3. CThe guidance issued by the entity's own board without reference to any standard
  4. DThe Income-tax Act treatment of the same transaction

Explanation

The comparison with IAS 8 notes that in paragraph 12 of Ind AS 8, in the absence of an Ind AS, management may first consider the most recent pronouncements of the International Accounting Standards Board. The other options are not the sources named in the text. Competitor practice and tax treatment are not the stated first reference.

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