IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
Accounting Policies Accounting Estimates Accounting Errors
(Prior Period)
Definition Specific principles, Judgements for Omissions from and
bases, conventions, rules amounts misstatements in the
and practices entity’s financial
statements
Basis Based mostly on IFRS; if Based on latest Based on mathematical
not judgement available reliable mistakes, mistakes in
information and applying accounting
experience policies, oversights or
misinterpretation of
facts, fraud
Example Inventory valuation Depreciation rates, Inaccurate depreciation
allowance for amount booked
receivables
Change Yes, ONLY IF required by Yes, based on Yes, whenever the error
permitted? / IFRS or change results in information and is identified and is
Correction more reliable & relevant experience; material
required? information;
Not treated as the
Change in recognition, correction of errors
presentation or
measurement basis
Effect of Retrospective Prospective Retrospective
change/ Effective from past Effective from Effective from past
correction Adjust opening present Adjust opening
balance of equity and balance of equity and
Restate comparatives Restate comparatives
Disclosure Yes Yes Yes
required?
