Accruals, Materiality and aggregation of Accounting - Ind AS - Indian Accounting Standards - Companies Law

Accruals, Materiality and aggregation of Accounting Accrual An entity shall prepare its financial statements, except for cash flow information, using the accrual basis of accounting. When the accrual basis of accounting is used, an entity recognises items as assets, liabilities, equity, income and expenses (the elements of financial statements) when they satisfy the definitions and recognition criteria for those elements in the Conceptual Framework. Materiality and Aggregation An entity shall present separately each material class of similar items. An entity shall present separately items of a dissimilar nature or function unless they are immaterial except when required by law. If a line item is not individually material, it is aggregated with other items either in those statements or in the notes. An item that is not sufficiently material to warrant separate presentation in those statements may warrant separate presentation in the notes. An entity shall not reduce the understandability of its financial statements by obscuring material information with immaterial information or by aggregating material items that have different natures or functions. Every IndAS gives a list of disclosures to be presented in notes to accounts but if the information is immaterial, it need not disclose the same. The disclosure requirements in each Ind AS are MINIMUM. If the disclosures as required by Ind AS are insufficient to understand the financial statement, entity should provide additional disclosures.