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An entity changes its accounting policy for an existing subsidiary in SFS from COST to FAIR VALUE under Ind AS 109. The change is permitted only if it would result in:
ALower deferred tax
BPermission from ICAI
CMore relevant and reliable information (and the policy change is applied retrospectively under Ind AS 8)
DHigher net profit
Answer & Solution
Correct answer: C. More relevant and reliable information (and the policy change is applied retrospectively under Ind AS 8)
Voluntary accounting policy changes require the Ind AS 8 reliability + relevance test, applied retrospectively. The same applies to changes between cost and Ind AS 109 measurement in SFS. The 'more relevant and reliable' threshold must be met.
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