FAQ on IND AS 1 - PowerPoint PPT Presentation

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FAQ on IND AS 1

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What is IND AS 1? Ans. IND AS 1 is the Indian Accounting Standard that sets out the rules for presentation of financial statements. – PowerPoint PPT presentation

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Title: FAQ on IND AS 1


1
FAQ on IND AS 1
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  • Q.1 What is IND AS 1? Ans. IND AS 1 is the Indian
    Accounting Standard that sets out the rules for
    presentation of financial statements.
  • Q.2 Who is required to comply with IND AS 1?
  • Ans. Companies in India that are listed on the
    stock exchange, as well as unlisted companies
    with a net worth of Rs. 500 crore or more, are
    required to comply with IND AS 1.
  • Q.3 What are the key requirements of IND AS 1?
  • Ans. IND AS 1 requires companies to present
    their financial statements in a certain format,
    including a statement of financial position
    (balance sheet), statement of profit and loss
    (income statement), statement of changes in
    equity (if applicable), and statement of cash
    flows. The standard also requires companies to
    disclose certain information in the financial
    statements, such as significant accounting
    policies and key assumptions used in preparing
    the financial statements.
  • Q.4 Are there any specific rules for the
    presentation of financial statements under IND AS
    1?
  • Ans. Yes, IND AS 1 sets out specific rules for
    the presentation of financial statements. For
    example, it requires that assets and liabilities
    be presented in order of liquidity (i.e., how
    quickly they can be converted into cash). It also
    requires that expenses be presented by function
    (i.e., the nature of the expense) rather than by
    the type of expense (e.g., salaries, rent, etc.).
  • Q.5 When did IND AS 1 become effective?
  • Ans. IND AS 1 became effective on April 1, 2015,
    for companies in India that are required to
    comply with the standard.

3
  • Q.6 What is the objective of IND AS 1?
  • Ans. The objective of IND AS 1 is to ensure that
    financial statements are presented in a way that
    provides users with information that is relevant,
    reliable, comparable, and understandable.
  • Q.7 How does IND AS 1 differ from the previous
    accounting standards in India?
  • Ans. IND AS 1 is based on the International
    Financial Reporting Standards (IFRS), which are
    used in many countries around the world. The
    previous accounting standards in India were based
    on the Indian Generally Accepted Accounting
    Principles (GAAP), which were not as closely
    aligned with the IFRS.
  • Q.8 What are some of the challenges that
    companies face when transitioning to IND AS 1?
  • Ans. Companies may face challenges in areas such
    as preparing financial statements in the required
    format, determining the appropriate accounting
    policies to use, and identifying the necessary
    disclosures to include in the financial
    statements. Companies may also need to invest in
    training for their accounting staff and in
    upgrading their accounting systems to comply with
    IND AS 1.
  • Q.9 Is there any guidance available for companies
    on how to implement IND AS 1?
  • Ans. Yes, the Institute of Chartered Accountants
    of India (ICAI) has issued guidance on how to
    implement IND AS 1, as well as other IND AS
    standards. Companies may also seek guidance from
    their auditors or accounting advisors.
  • Q.10  What are the benefits of complying with IND
    AS 1?
  • Ans. Complying with IND AS 1 can provide
    companies with several benefits, such as
    increased transparency and comparability of
    financial statements, improved access to capital
    markets, and enhanced credibility with investors
    and other stakeholders.

4
  • Multiple choice Question Q.1. What is IND AS 1?
  • Indian Accounting Standard for Revenue
    Recognition
  • Indian Accounting Standard for Financial
    Instruments
  • Indian Accounting Standard for Presentation of
    Financial Statements
  • Indian Accounting Standard for Leases
  • Answer c) Indian Accounting Standard for
    Presentation of Financial Statements
  • Q.2. Who is required to comply with IND AS 1?
  • a) Only listed companies in India b) Unlisted
    companies with a net worth of Rs. 100 crore or
    more c) Companies in India that are listed on the
    stock exchange and unlisted companies with a net
    worth of Rs. 500 crore or more d) All companies
    in India
  • Answer c) Companies in India that are listed on
    the stock exchange and unlisted companies with a
    net worth of Rs. 500 crore or more
  • Q.3. What are the key requirements of IND AS 1?
  • a) Rules for recognition of revenue b) Rules for
    measurement of financial instruments c) Rules for
    presentation of financial statements d) Rules for
    accounting for leases
  • Answer c) Rules for presentation of financial
    statements

5
  • Q.4. When did IND AS 1 become effective? a) April
    1, 2015 b) April 1, 2016 c) April 1, 2017 d)
    April 1, 2018
  • Answer a) April 1, 2015
  • Q.5. What is the objective of IND AS 1? a) To
    ensure that financial statements are presented in
    a way that provides users with information that
    is relevant, reliable, comparable, and
    understandable b) To ensure that companies
    recognize revenue in a manner that reflects the
    substance of the transaction c) To ensure that
    companies account for financial instruments at
    fair value d) To ensure that companies account
    for leases in a manner that reflects the
    substance of the transaction
  • Answer a) To ensure that financial statements
    are presented in a way that provides users with
    information that is relevant, reliable,
    comparable, and understandable
  • Q.6. What are some of the challenges that
    companies face when transitioning to IND AS 1? a)
    Preparing financial statements in the required
    format b) Determining the appropriate accounting
    policies to use c) Identifying the necessary
    disclosures to include in the financial
    statements d) All of the above
  • Answer d) All of the above

6
  • Q.7. Is there any guidance available for
    companies on how to implement IND AS 1? a) No,
    there is no guidance available b) Yes, the
    Institute of Chartered Accountants of India
    (ICAI) has issued guidance c) Yes, companies can
    seek guidance from their auditors or accounting
    advisors d) Both b and c
  • Answer d) Both b and c
  • Q.8. What are the benefits of complying with IND
    AS 1? a) Increased transparency and comparability
    of financial statements b) Improved access to
    capital markets c) Enhanced credibility with
    investors and other stakeholders d) All of the
    above
  • Answer d) All of the above
  • Q.9. What is the minimum set of financial
    statements required to be presented under IND AS
    1? a) Balance sheet, income statement, cash flow
    statement b) Balance sheet, income statement,
    statement of changes in equity, cash flow
    statement c) Balance sheet, income statement,
    statement of retained earnings, cash flow
    statement d) Balance sheet, statement of
    comprehensive income, statement of changes in
    equity, cash flow statement
  • Answer b) Balance sheet, income statement,
    statement of changes in equity, cash flow
    statement

7
  • Q.10. Under IND AS 1, what is the requirement for
    the presentation of non-current assets held for
    sale and discontinued operations? a) They should
    be presented as a separate line item in the
    balance sheet b) They should be presented as a
    separate line item in the income statement c)
    They should be presented as a separate category
    in the statement of cash flows d) They should be
    disclosed in the notes to the financial
    statements
  • Answer a) They should be presented as a separate
    line item in the balance sheet
  • Q.11. What is the requirement for the
    presentation of related party transactions under
    IND AS 1? a) They should be disclosed in the
    notes to the financial statements b) They should
    be presented as a separate line item in the
    income statement c) They should be presented as a
    separate category in the statement of cash flows
    d) They should be presented as a separate line
    item in the balance sheet
  • Answer a) They should be disclosed in the notes
    to the financial statements
  • Q.12. What is the requirement for the
    presentation of earnings per share under IND AS
    1? a) It should be presented as a separate line
    item in the balance sheet b) It should be
    presented as a separate line item in the income
    statement c) It should be presented as a separate
    category in the statement of cash flows d) It
    should be disclosed in the notes to the financial
    statements
  • Answer d) It should be disclosed in the notes
    to the financial statements
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