IAS 8 – Accounting Policies- Changes in Accounting Estimates & Errors
Objective: to prescribe a criteria for selecting and changing accounting policies, together with accounting treatment and disclosure of changes in accounting policies.
In choosing accounting policies:
(1) Standards and interpretation taking by IASB guidance.
(2) In the absence of a standard, look to the requirement and guidance in IASB standards and interpretations dealing with similar and related issues.
(3) Management may consider the most recent pronouncement of other standard setting bodies that use similar conceptual framework to develop accounting standards.
(4) Apply accounting policies consistently to similar transactions.
(5) Make a change in accounting policy only if it required by a standards or interpretation or as results of more reliable information.
(6) If a change in accounting policy is required by a standard or interpretation, fallow that pronouncement's transition requirements.
Changes in accounting estimates:
For example change in the life of an assets, are accounted for in the current year or future years or both, no restatement allowed.
Errors:
All errors should be corrected by restating comparative" prior period amount" and if errors occurred before the earliest period presented in the financial statement, restating the opening balance sheet.
Disclosures:
Disclosures are required about accounting changes, changes in estimates, and error corrections.
The Differences and Similarities between US GAAP Law and IFRS
Similarities & significant difference
IFRS | US Law GAAP | |
Accounting policies is change as a response to (1) New or revised standard. (2)change in Interpretation (3) If new policy is more appropriate. | Accounting policies is change as a response to (1) New or revised standard. (2)change in Interpretation (3) If new policy is more appropriate. | Change in accounting policy |
Accounting principles changes are made by adjusting opening equity and comparatives, unless impracticable | Un like IFRS errors must be corrected by restating opening equity and comparatives, with no exemption. | Accounting principles changes |
Changes in accounting estimates are accounted for in the current year or future years or both, no restatement allowed. | Changes in accounting estimates are accounted for in the current year or future years or both, no restatement allowed. | Changes in accounting estimates |
When it is difficult to determine whether a change is a change in accounting policy or a change in estimate, it is treated as a change in estimate. | When it is difficult to determine whether a change is a change in accounting policy or a change in estimate, it is treated as a change in estimate. | Changes in accounting policies or changes in estimated. |
אין תגובות:
הוסף רשומת תגובה