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    PAS 8 Accounting Policies, Changes in Accounting

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    De Nev Oel
    This document discusses accounting policies, changes in accounting estimates and errors according to PAS 8. It outlines that accounting policies are the specific principles, bases, conventions, rules and practices applied in preparing financial statements. Changes in accounting policies are only permitted if required by a PFRS or result in more relevant information. Common changes include changes in cost formulas, measurement models, and revenue recognition methods. Changes are accounted for using transitional provisions, retrospective, or prospective application based on priority.

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    PAS 8 Accounting Policies, Changes in Accounting

    Uploaded by

    De Nev Oel
    3K views7 pages
    This document discusses accounting policies, changes in accounting estimates and errors according to PAS 8. It outlines that accounting policies are the specific principles, bases, conventions, rules and practices applied in preparing financial statements. Changes in accounting policies are only permitted if required by a PFRS or result in more relevant information. Common changes include changes in cost formulas, measurement models, and revenue recognition methods. Changes are accounted for using transitional provisions, retrospective, or prospective application based on priority.

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    PAS 8 Acounting Policies, Changes in Accounting Procedures

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    This document discusses accounting policies, changes in accounting estimates and errors according to PAS 8. It outlines that accounting policies are the specific principles, bases, conventions, rules and practices applied in preparing financial statements. Changes in accounting policies are only permitted if required by a PFRS or result in more relevant information. Common changes include changes in cost formulas, measurement models, and revenue recognition methods. Changes are accounted for using transitional provisions, retrospective, or prospective application based on priority.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    3K views7 pages

    PAS 8 Accounting Policies, Changes in Accounting

    Uploaded by

    De Nev Oel
    This document discusses accounting policies, changes in accounting estimates and errors according to PAS 8. It outlines that accounting policies are the specific principles, bases, conventions, rules and practices applied in preparing financial statements. Changes in accounting policies are only permitted if required by a PFRS or result in more relevant information. Common changes include changes in cost formulas, measurement models, and revenue recognition methods. Changes are accounted for using transitional provisions, retrospective, or prospective application based on priority.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7
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    The key takeaways are the definitions of accounting policies and the requirements for selecting, changing, and accounting for changes in accounting policies according to PAS 8.

    Accounting policies must be selected according to the hierarchy of reporting standards, which are PFRSs first and management judgment considering other PFRS requirements, conceptual framework, and other sources second.

    An accounting policy can only be changed if the change is required by a PFRS or results in more relevant and reliable information.

    PAS 8 Accounting Policies,

    Changes in Accounting
    Estimates and Errors
    E DV E N L EO M . D E L A P E Ñ A BSA-1
    Accounting Policies
    “ The specific principles, bases, conventions, rules and practices
    applied by an entity in preparing financial statements” (PAS 8.5)

    ◦ Selection and application of accounting policies


    ◦ Changes in Accounting Policies
    ◦ Accounting for Changes in Accounting Policies
    Selection and Application of Accounting Policies
    Hierarchy of reporting standards
    1. PFRSs
    2. Judgment
    When making the judgment:
     Management shall consider the following:
    a. Requirements in other PFRSs dealing with similar transactions
    b. Conceptual Framework
     Management may consider the following:
    a. Pronouncements issued by other standard-setting bodies
    b. Other accounting literature and industry practices
    Changes in Accounting Policies
    PAS 8 requires the consistent selection and application of accounting policies.

    PAS 8 permits a change in accounting policy only if the change:


    a. is required by a PFRS; or
    b. results in reliable and more relevant information
    Changes in Accounting Policies
    A change in accounting policy usually results from a change in measurement
    basis. Examples of changes in accounting policies:
    a. Change from FIFO to the Weighted Average cost formula for inventories.
    b. Change from the cost model to the fair value model of measuring investment property.
    c. Change from the cost model to the revaluation model of measuring property, plant and
    equipment and intangible assets.
    d. Change in business model for classifying financial assets,
    e. Change in the method of recognizing revenue from long-term construction contracts.
    f. Change to a new policy resulting from the requirement of a new PFRS.
    g. Change in financial reporting framework, such as from PFRS for SMEs to full PFRSs.
    Changes in Accounting Policies
    The following are not changes in accounting policies:
    a. The application of an accounting policy for transactions, other events or conditions that
    differ in substance from those previously occurring.
    b. The application new accounting policy for transactions, other events or conditions that
    did not occur previously or were immaterial.
    Accounting for Changes in Accounting Policies
    Changes in accounting policies are accounted for using the following order of priority:
    1. Transitional provision in a PFRS
    2. Retrospective Application
    3 Prospective Application

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