How IAS 8 Handles Accounting Policies, Changes in Accounting Estimates and Errors

IAS 8 prescribes the criteria for selecting and changing accounting policies, together with the accounting treatment and disclosure of changes in accounting policies, changes in accounting estimates, and corrections of errors. When there is no specific standard that applies to a transaction, other events, or condition, IAS 8 requires that Management apply judgment. But just exactly how do you do it?

Guessing will not suffice, nor will management’s insistence on adopting a significant change. So knowing if the criteria to be applied are acceptable under IAS 8 is critical to satisfying the auditor and management to proceed with changes in accounting policies, changes in accounting estimates, and corrections of prior period errors, that do not contradict IFRS.

Course Key Concepts: IFRS, Accounting Policies, Changes in Accounting Estimates, Errors.