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Accounting Estimates and Errors Accounting Policies ...

IAS 8 Accounting Policies , Changes inAccounting Estimates and ErrorsIn April 2001 the International Accounting Standards Board (Board) adopted IAS 8 NetProfit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies , which hadoriginally been issued by the International Accounting Standards Committee inDecember 1993. IAS 8 Net Profit or Loss for the Period, Fundamental Errors and Changes inAccounting Policies replaced IAS 8 Unusual and Prior Period Items and Changes in AccountingPolicies (issued in February 1978).In December 2003 the Board issued a revised IAS 8 with a new title Accounting Policies ,Changes in Accounting Estimates and Errors .

Accounting Estimates and Errors In April 2001 the International Accounting Standards Board (Board) adopted IAS 8 Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies, which had originally been issued by the International Accounting Standards Committee in December 1993.

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Transcription of Accounting Estimates and Errors Accounting Policies ...

1 IAS 8 Accounting Policies , Changes inAccounting Estimates and ErrorsIn April 2001 the International Accounting Standards Board (Board) adopted IAS 8 NetProfit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies , which hadoriginally been issued by the International Accounting Standards Committee inDecember 1993. IAS 8 Net Profit or Loss for the Period, Fundamental Errors and Changes inAccounting Policies replaced IAS 8 Unusual and Prior Period Items and Changes in AccountingPolicies (issued in February 1978).In December 2003 the Board issued a revised IAS 8 with a new title Accounting Policies ,Changes in Accounting Estimates and Errors .

2 This revised IAS 8 was part of the Board s initialagenda of technical projects. The revised IAS 8 also incorporated the guidance containedin two related Interpretations (SIC-2 Consistency Capitalisation of Borrowing Costs and SIC-18 Consistency Alternative Methods).In October 2018 the Board issued Definition of Material (Amendments to IAS 1 and IAS 8).This amendment clarified the definition of material and how it should be applied by (a)including in the definition guidance that until now has featured elsewhere in IFRSS tandards; (b) improving the explanations accompanying the definition; and (c) ensuringthat the definition of material is consistent across all IFRS Standards have made minor consequential amendments to IAS 8.

3 They includeIFRS 13 Fair Value Measurement (issued May 2011), IFRS 9 Financial Instruments (HedgeAccounting and amendments to IFRS 9, IFRS 7 and IAS 39) (issued November 2013),IFRS 9 Financial Instruments (issued July 2014) and Amendments to References to the ConceptualFramework in IFRS Standards (issued March 2018).IAS 8 IFRS FoundationA1053 CONTENTS from paragraphINTERNATIONAL Accounting STANDARD 8 Accounting Policies , CHANGES IN ACCOUNTINGESTIMATES AND ERRORSOBJECTIVE1 SCOPE3 DEFINITIONS5 Accounting POLICIES7 Selection and application of Accounting policies7 Consistency of Accounting policies13 Changes in Accounting policies14 CHANGES IN Accounting ESTIMATES32 Disclosure39 ERRORS41 Limitations on retrospective restatement43 Disclosure of prior period errors49 IMPRACTICABILITY IN RESPECT OF RETROSPECTIVE APPLICATION ANDRETROSPECTIVE RESTATEMENT50 EFFECTIVE DATE AND TRANSITION54 WITHDRAWAL OF OTHER PRONOUNCEMENTS55 APPENDIXA mendments to other pronouncementsAPPROVAL BY THE BOARD OF IAS 8 ISSUED IN DECEMBER 2003 APPROVAL BY THE BOARD OF

4 DEFINITION OF MATERIAL (AMENDMENTSTO IAS 1 AND IAS 8) ISSUED IN OCTOBER 2018 FOR THE ACCOMPANYING GUIDANCE LISTED BELOW, SEE PART B OF THIS EDITIONIMPLEMENTATION GUIDANCEFOR THE BASIS FOR CONCLUSIONS, SEE PART C OF THIS EDITIONBASIS FOR CONCLUSIONSIAS 8A1054 IFRS FoundationInternational Accounting Standard 8 Accounting Policies , Changes in Accounting Estimatesand Errors (IAS 8) is set out in paragraphs 1 56 and the Appendix. All the paragraphshave equal authority but retain the IASC format of the Standard when it was adoptedby the IASB. IAS 8 should be read in the context of its objective and the Basis forConclusions, the Preface to IFRS Standards and the Conceptual Framework for 8 IFRS FoundationA1055 International Accounting Standard 8 Accounting Policies , Changes in Accounting Estimates andErrorsObjectiveThe objective of this Standard is to prescribe the criteria for selecting andchanging Accounting Policies , together with the Accounting treatment anddisclosure of changes in Accounting Policies , changes in Accounting estimatesand corrections of Errors .

5 The Standard is intended to enhance the relevanceand reliability of an entity s financial statements, and the comparability ofthose financial statements over time and with the financial statements ofother requirements for Accounting Policies , except those for changes inaccounting Policies , are set out in IAS 1 Presentation of Financial Standard shall be applied in selecting and applying accountingpolicies, and Accounting for changes in Accounting Policies , changes inaccounting Estimates and corrections of prior period tax effects of corrections of prior period Errors and of retrospectiveadjustments made to apply changes in Accounting Policies are accounted forand disclosed in accordance with IAS 12 Income following terms are used in this Standard with the meanings specified.

6 Accounting Policies are the specific principles, bases, conventions, rules andpractices applied by an entity in preparing and presenting change in Accounting estimate is an adjustment of the carrying amount ofan asset or a liability, or the amount of the periodic consumption of anasset, that results from the assessment of the present status of, andexpected future benefits and obligations associated with, assets andliabilities. Changes in Accounting Estimates result from new information ornew developments and, accordingly, are not corrections of Financial Reporting Standards (IFRSs) are Standards andInterpretations issued by the International Accounting Standards Board(IASB).

7 They comprise:(a)International Financial Reporting Standards;(b)International Accounting Standards;(c)IFRIC Interpretations; and12345 IAS 8A1056 IFRS Foundation(d)SIC is defined in paragraph 7 of IAS 1 and is used in this Standard withthe same period Errors are omissions from, and misstatements in, the entity sfinancial statements for one or more prior periods arising from a failure touse, or misuse of, reliable information that:(a)was available when financial statements for those periods wereauthorised for issue; and(b)could reasonably be expected to have been obtained and taken intoaccount in the preparation and presentation of those Errors include the effects of mathematical mistakes, mistakes inapplying Accounting Policies , oversights or misinterpretations of facts, application is applying a new Accounting policy to transactions,other events and conditions as if that policy had always been restatement is correcting the recognition.

8 Measurement anddisclosure of amounts of elements of financial statements as if a priorperiod error had never Applying a requirement is impracticable when the entitycannot apply it after making every reasonable effort to do so. For aparticular prior period, it is impracticable to apply a change in anaccounting policy retrospectively or to make a retrospective restatement tocorrect an error if:(a)the effects of the retrospective application or retrospectiverestatement are not determinable;(b)the retrospective application or retrospective restatement requiresassumptions about what management s intent would have been inthat period.

9 Or(c)the retrospective application or retrospective restatement requiressignificant Estimates of amounts and it is impossible to distinguishobjectively information about those Estimates that:(i)provides evidence of circumstances that existed on thedate(s) as at which those amounts are to be recognised,measured or disclosed; and(ii)would have been available when the financial statements forthat prior period were authorised for issue from of IFRSs amended after the name changes introduced by the revised Constitution of theIFRS Foundation in 8 IFRS FoundationA1057 Prospective application of a change in Accounting policy and of recognisingthe effect of a change in an Accounting estimate, respectively, are:(a)applying the new Accounting policy to transactions, other eventsand conditions occurring after the date as at which the policy ischanged.

10 And(b)recognising the effect of the change in the Accounting estimate inthe current and future periods affected by the change.[Deleted] Accounting policiesSelection and application of Accounting policiesWhen an IFRS specifically applies to a transaction, other event orcondition, the Accounting policy or Policies applied to that item shall bedetermined by applying the set out Accounting Policies that the IASB has concluded result infinancial statements containing relevant and reliable information about thetransactions, other events and conditions to which they apply.


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