It is important that disclosure be made of the accounting policies adopted in preparing a financial report:
A)because they have to be disclosed under AASB 108
B)because they can have a significant effect on the items recognised, how they are measured and the disclosure made about them
C)only to the extent that they are material in understanding the financial report
D)even if they are not material, they are necessary to explain the events and transactions of the entity

Question

Quizplus · Accepted Answer

Accounting policies can have a significant impact on financial reports as they dictate how items are recognized, measured, and disclosed. Therefore, it is essential to disclose them in financial reports to ensure transparency and clarity for stakeholders. AASB 108 also mandates the disclosure of accounting policies. Materiality is not the only factor to consider when disclosing accounting policies, as even immaterial policies may affect the overall understanding of the financial report.

It Is Important That Disclosure Be Made of the Accounting