Changes in accounting

Question 1

Changes in accounting

Answer 1

Estimates - prospective

Accounting policy - retrospective

Error - retrospective

Question 2

Changes in estimates

Answer 2

• prospectively
• is a result of new information that was not available at the balance sheet date

Required disclosures:

• the nature and amount of the change in estimate that affects the current period, or is expected to have an effect on future periods
• disclose if not possible to esitmate the effect on future periods

Question 3

Changes in policies

Answer 3

Can only be done when:

• voluntary change - when it results in more reliable and relevant info to the users of the f/s
• mandatory change - change in GAAP standard

Retrospectively - IAS 1 requires

• 3 years b/s are amended
• 2 years i/s, statement of changes in equity, CFS are amended