CERTYNEX IFRS ACADEMY

Kastia accumulates five small departures from IFRSs, each immaterial (case data). Together, they bring the gearing ratio just below the ceiling of a bank covenant. Management refuses to correct them. Which analysis is right?

The departures are acceptable since each one, on its own, is immaterial.

The departures are inappropriate: they are kept to achieve a particular presentation.

The departures are acceptable if the bank is not informed.

The departures become changes in accounting estimates.