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CMA Intermediate · Corporate Accounting and Auditing · Presentation of Financial Statements (Ind AS 1)

Which statement best describes the objective of Ind AS 1 Presentation of Financial Statements?

Ind AS 1 prescribes the basis for presenting general purpose financial statements, so that they are comparable with the entity's own statements of earlier periods and with the statements of other entities. It also sets overall requirements, structure guidelines and minimum content, not recognition rules for individual items.

  1. AIt prescribes the basis for presenting general purpose financial statements so that they are comparable with the entity's own earlier statements and with those of other entitiesCorrect
  2. BIt prescribes how each individual asset and liability must be recognised and measured in the books of account
  3. CIt prescribes the format of the tax return to be filed by an entity with the income tax authorities
  4. DIt prescribes the audit procedures to be followed by the statutory auditor while reporting on the financial statements

Explanation

The objective paragraph states that Ind AS 1 prescribes the basis for presentation of general purpose financial statements to ensure comparability with the entity's previous periods and with other entities. It also sets overall requirements, structure guidelines and minimum content. Recognition and measurement are dealt with in other Ind ASs, so the second option is wrong.

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