CFAS_ PAS 8 Changes in Accounting Policies, Changes in Estimates and Errors

Question 1

standard’s transitional provision, if any.

Answer 1

On initial application of an IFRS, apply the change in accordance with the

Question 2

retrospectively

Answer 2

Correction of material prior period errors shall be dealt with

Question 3

True

Answer 3

(True or False) A error is exempted from retrospective application if the determination of the cumulative effect of the error in the prior periods is impracticable.

Question 4

new information, new developments, or more experience

Answer 4

An entity may change their estimates if changes occur in the circumstances surrounding the estimates resulting from

Question 5

Accounts receivable - estimated credit loss (bad debts)
Inventories - net realizable value
Property, plant and equipment - depreciation calculation
(depreciation method, useful life, residual value)
Fair value measurement (based on valuation techniques)
Provisions and contingent liabilities

Answer 5

Examples of Accounting Estimates

Question 6

Objective of PAS 8

Answer 6

Prescribe the criteria for selecting and changing accounting policies.
Prescribe the accounting treatment and disclosure of changes in accounting policies, changes in accounting estimates and corrections of errors.

Question 7

Management shall refer to the following sources in decending order:
Requirements of a PFRS dealing with similar and related issues
Conceptual Framework for Financial Reporting
Recent pronouncement of other standard-setting body
Accounting literature and acceptable industry practices

Answer 7

Where does management refer in the absence of an accounting policy?

Question 8

currently and prospectively

Answer 8

Changes in accouting estimates are applied

Question 9

consistently

Answer 9

An entity shall select and apply its accounting policies ____________ for similar transactions, other events and condition, unless PFRS requires or permits a different policy.

Question 10

True

Answer 10

(True or False) If a PFRS specifically applies to a transaction, event or condition, the
policies applied to that item shall be determined by applying the PFRS.

Question 11

Accounting estimates

Answer 11

are monetary amounts in financial statements that are subject to measurement uncertainty.

Question 12

Accounting policies

Answer 12

are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements.

Question 13

apply the change retrospectively.

Answer 13

In the absence of transitional provision, or when the change is voluntary,

Question 14

Scope of PAS 8

Answer 14

applies in selecting and applying accounting policies, and accounting for changes in accounting policies, changes in accounting estimates and corrections of prior period errors