Departure from a requirement, an extremely rare case

Learning objectives

• Assess whether the conditions for a departure are met in a given case and what disclosures to provide.L3

Normative references

• IAS 1 §19In the extremely rare circumstances in which management concludes that compliance with a requirement would be so misleading that it would conflict with the objective of financial statements set out in the Conceptual Framework, the entity departs from that requirement if the relevant regulatory framework requires, or otherwise does not prohibit, such a departure; the disclosures about the departure are set by paras. 20 to 22, and para. 23 deals with the case in which the regulatory framework prohibits the departure.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• After a documented analysis, Vela SA's management concludes that compliance with a requirement of an IFRS Accounting Standard, for a particular transaction, would be so misleading that it would conflict with the objective of financial statements set out in the Conceptual Framework (judgement given by the case). The regulatory framework applicable to Vela does not prohibit a departure (case data). What does IAS 1 require?L3