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CA Intermediate · Advanced Accounting · AS 1 Disclosure of Accounting Policies

Which of the following is correct about where accounting policies should be disclosed, as per AS 1, for Meenakshi Pharma Ltd.?

Significant accounting policies should be disclosed in one place as part of the financial statements. AS 1 requires them to form a clear statement within the financial statements, not in the Directors' Report or auditor's report, and not scattered randomly.

  1. AIn the Directors' Report only
  2. BAccounting policies may be disclosed in the notes scattered, without a single place, to save space
  3. CIn one place as part of the financial statements, forming a clear statement of significant accounting policiesCorrect
  4. DOnly in the auditor's report

Explanation

AS 1 requires that all significant accounting policies adopted in preparing and presenting the financial statements be disclosed. The disclosure should form part of the financial statements and normally be in one place. Directors' Report or auditor's report is not the correct location.

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