If an enterprise changes accounting policies, how must this be disclosed per AS 1?
AIt need not be disclosed if immaterial
BDisclose only in subsequent year
COnly oral disclosure to auditors
DDisclose along with reasons and financial impact
Answer & Solution
Correct answer: D. Disclose along with reasons and financial impact
1. Step 1: AS 1 (Disclosure of Accounting Policies) requires disclosure of changes in accounting policies with reasons and financial effect.
2. Step 2: This ensures comparability.
3. Step 3: Hence (C).
_Source: ICAI BoS CA Inter Paper 1, Ch 3 "Applicability of Accounting Standards"_