IAS 8 - Accounting policies, changes in accounting estimates and errors

Question 1

Accounting Policies, Changes, Errors (IFRS)

Answer 1

Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. Changes in accounting estimates result from new information or new developments and, accordingly, are not corrections of errors.

Only change a policy if:
* Standard/interpretation requires it, or
* Change will provide more relevant and reliable information to users
Apply changes to policy retrospectively unless it is impractical.

Changes to accounting estimates should be applied prospectively.

Corrections to errors should be applied retrospectively unless it is impractical

Reference: IAS 8