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

Veda Textiles Ltd's finance team is drafting its accounting policy note. A junior accountant defines 'accounting policies' for the notes. Which definition matches Ind AS 8?

Accounting policies are the specific principles, bases, conventions, rules and practices an entity applies in preparing and presenting its financial statements. The definition of monetary amounts subject to measurement uncertainty describes accounting estimates, not policies.

  1. AMonetary amounts in financial statements that are subject to measurement uncertainty
  2. BThe specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statementsCorrect
  3. CStandards prescribed under Section 133 of the Companies Act, 2013
  4. DAmounts that could influence the economic decisions of primary users of the financial statements

Explanation

Ind AS 8 defines accounting policies as the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. The first option is the definition of accounting estimates, so it is wrong. The third describes Ind ASs themselves, and the fourth relates to materiality.

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