ICAEW AF · Chapter 1 · Question 8 of 11
In which circumstances does IAS 1 Presentation of Financial Statements allow an entity to depart from a requirement of an IFRS?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) In extremely rare circumstances where management concludes that compliance would be so misleading that it would conflict with the objective of financial statements
Explanation
IAS 1 requires fair presentation, which is normally achieved by complying with IFRS. A departure is allowed only in extremely rare circumstances when compliance would be so misleading that it would conflict with the objective of financial statements set out in the Conceptual Framework. The entity must disclose the departure, the reasons for it and its financial effect. This is the IFRS equivalent of the 'true and fair override' found in UK company law.
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