Take This Quiz & Predict Your Score in the coming CA CS or CMA Exam!
  • How important it is for you to pass the exam in this attempt?
  • What percentage of course you have finished well so far roughly?
  • How many hours you study in a day?
  • How many times you have revised the topics you have finished
  • Have you taken online or pen drive or live class from a renowned faculty?
  • What percentage of the classes you have watched?
  • Have you attempted mock tests or practice tests yet?
  • Are you planning to attempt mock tests conducted by external bodies- ICAI, ICSI, ICMAI or other institute?
  • How many tests you have taken?
  • Did you manage to finish the test papers on time?
  • Are you strictly following study material provided by the exam conducting authority such as ICAI/ICSI/ICMAI/Other Body?
  • How is your health in general?
  • How is your food habit?
  • Any interest in yoga or exercise or play sports regularly?
  • Planning to sleep well nights before the exams?
  • Planning to have light food and water before exams?

IFRS Purpose of accounting policies

IFRS Purpose of accounting policies

IFRS Purpose of accounting policies: The following terms are used in this Standard with the meanings specified: Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. A change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of the periodic consumption of an asset, that results from the assessment of the present status of, and expected future benefits and obligations associated with, assets and liabilities. Changes in accounting estimates result from new information or new developments and, accordingly, are not corrections of errors. International Financial Reporting Standards (IFRSs) are Standards and Interpretations issued by the International Accounting Standards Board (IASB). They comprise:

(a) International Financial Reporting Standards.

(b) International Accounting Standards.

(c) IFRIC Interpretations.

(d) SIC Interpretations.1 Material Omissions or misstatements of items are material if they could, individually or collectively, influence the economic decisions that users make on the basis of the financial statements.

Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances.

IFRS Purpose of accounting policies

IFRS Purpose of accounting policies

IFRS Purpose of accounting policies

The size or nature of the item, or a combination of both, could be the determining factor. Prior period errors are omissions from, and misstatements in, the entity’s financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that:

(a) was available when financial statements for those periods were authorised for issue; and

(b) could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements. Such errors include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud.

Retrospective application is applying a new accounting policy to transactions, other events and conditions as if that policy had always been applied. Retrospective restatement is correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period error had never occurred.

Impracticable Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. For a particular prior period, it is impracticable to apply a change in an accounting policy retrospectively or to make a retrospective restatement to correct an error if:

(a) the effects of the retrospective application or retrospective restatement are not determinable;

(b) the retrospective application or retrospective restatement requires assumptions about what management’s intent would have been in that period; or

(c) the retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that:

(i) provides evidence of circumstances that existed on the date(s) as at which those amounts are to be recognised, measured or disclosed.

(ii) would have been available when the financial statements for that prior period were authorised for issue from other information.

Prospective application of a change in accounting policy and of recognising the effect of a change in an accounting estimate, respectively, are:

(a) applying the new accounting policy to transactions, other events and conditions occurring after the date as at which the policy is changed.

(b) recognising the effect of the change in the accounting estimate in the current and future periods affected by the change.

IFRS Purpose of accounting policies

Project Objective

The objective of the proposed amendment is to clarify the existing distinction between accounting policies and accounting estimates.

In September 2014 the IFRS Interpretations Committee informed the IASB about divergent practices regarding the assessment of whether an accounting change represents a change in accounting policy, or a change in accounting estimate, in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

In its April 2016 meeting, the Board tentatively decided to amend the definitions of accounting policies and changes in accounting estimates in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors in order to:

  1. clarify the definitions of accounting policies and of changes in accounting estimates with the objective of making them more concise and distinctive.
  2. clarify how accounting policies and estimates relate to each other.
  3. add guidance about whether changes in valuation techniques and in estimation techniques are changes in accounting estimates.
  4. update examples of estimates provided in IAS 8.

IFRS Purpose of accounting policies


When initial application of an IFRS has an effect on the current period or any prior period, would have such an effect except that it is impracticable to determine the amount of the adjustment, or might have an effect on future periods, an entity shall disclose:

(a) the title of the IFRS.

(b) when applicable, that the change in accounting policy is made in accordance with its transitional provisions.

(c) the nature of the change in accounting policy.

(d) when applicable, a description of the transitional provisions.

(e) when applicable, the transitional provisions that might have an effect on future periods.

(f) for the current period and each prior period presented, to the extent practicable, the amount of the adjustment:

(i) for each financial statement line item affected.

(ii) if IAS 33 Earnings per Share applies to the entity, for basic and diluted earnings per share.

(g) the amount of the adjustment relating to periods before those presented, to the extent practicable.

(h) if retrospective application required by paragraph 19(a) or (b) is impracticable for a particular prior period, or for periods before those presented, the circumstances that led to the existence of that condition and a description of how and from when the change in accounting policy has been applied. Financial statements of subsequent periods need not repeat these disclosures.

IFRS Identification of inflows and outflows of cash and cash equivalents provides India’s top IFRS faculty video classes – online & in Pen Drive/ DVD – at very cost effective rates. Get IFRS Video classes from  to do a great preparation for primary Student.

Watch IFRS sample video lectures visit
Watch  IFRS  sample lecture books   visit
Watch IFRS free downloads   visit

Leave a comment

Your email address will not be published. Required fields are marked *