Topic 11- Other standards IAS 8 Accounting policies, change in accounting estimates and errors

Question 1

what issues does IAS 8 address

Answer 1

Selection of accounting policies
Changes in accounting policies
Changes in accounting estimates
Correction of prior period errors

Question 2

IAS 8 requires an enterprise to select and apply appropriate accounting policies complying with IFRS standards and interpretations to ensure that the financial statement provide information that is

what?

Answer 2

1) Relevant to the decision making needs of users and

2) Represents faithfully the results and financial position of the entity

Question 3

when can you change accounting policies

Answer 3

• If it is by a change to the IFRS standard

* If it will provide the users with more reliable and relevant information

Question 4

how should a change in accounting Policy be reflected in the statements

list the steps

Answer 4

Retrospectively

1) New policy is applied
2) Restate retained earnings
3) Disclose in SOCIE
4) Restate comparative

Question 5

how should a change in accounting estimate be reflected in the statements

Answer 5

Prospective

1) Change current and future periods
2) Disclose if change is material

Question 6

how should prior period errors be reflected in the statements

Answer 6

Retrospectively

Material prior period errors should be corrected retrospectively through the SOCIE by adjustment against the opening balance of retained earnings in the statement of changes in equity.

1) Restate opening assets/liab/equity as if error never occured
2) Adjust retained earnings
3) Disclose in SOCIE
4) Restate comparative

Question 7

Give an example of an accounting policy change

Answer 7

A change to reporting depreciation charges as cost of sales rather than as administrative expenses