alleryStart learning →Replacing ad hoc retirement payments with a formal gratuity scheme is
AA change in policy
BA prior period item
CAn extraordinary item
DNot a policy change
Answer & Solution
Correct answer: D. Not a policy change
The new scheme covers transactions that differ in substance from earlier ad hoc payments, so it is a new policy rather than a change.
Keep practising AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies
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