Amendments to
IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors
GROUP B:
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Burato, Melanie
Cabawatan, Christine
Castillo, Rod Stephen
Castro, Mae Lalaine
Catanduanes, Niña
IAS 8
Accounting Estimates
Accounting Policies
Prior Period Error
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Reason for amendments
The amendments are to clarify the distinction
between the changes in accounting estimates
and changes in accounting policies and
correction of errors.
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The main matters the Board considered in developing the definition and
related requirements included:
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the relationship between accounting policies and accounting
estimates
- the amendments clarify the relationship between accounting
policies and estimates by specifying that an entity develops an
accounting estimate to achieve the objective set out by an accounting
policy.
● Judgment and assumptions
- accounting estimates are the output of measurement techniques
that require an entity to use judgments or assumptions and that the
judgments or assumptions are not accounting estimates themselves.
●
The main matters the Board considered in developing the definition and
related requirements included:
Measurement uncertainty
- uncertainty that arises when monetary amounts in financial
reports cannot be observed directly and must instead be estimated.
● Monetary amounts
- the Board concluded that it was unnecessary to also include nonmonetary amounts in the definition of accounting estimates
● Scope
- The Board concluded that the amendments should not change the
scope of IAS 8.
●
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OLD:
NEW:
● The current IAS do not provide the
● In the amended standard, it defines
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definition of accounting estimates.
● The
definition
of
change
in
accounting estimate result from new
information or new developments
and, accordingly, are not corrections
of errors.
● Accounting policies are “the specific
principle bases, conventions, rules,
and practices applied by an entity in
preparing and presenting financial
statements”.
Accounting Estimate as “ monetary
amounts in financial statements that
are
subject
to
measurement
uncertainty
● The Board concluded that it would be
helpful to retain this aspect of the
previous definition
● The board concluded that changing
the definition of accounting policies
was unnecessary.
Effective date and transition
●
The amendments become effective for annual reporting
periods beginning on or after 1 January 2023 and apply to
changes in accounting policies and changes in accounting
estimates that occur on or after the start of that period.
Earlier application is permitted.
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