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IAS 8 Accounting Policies Exam Questions & Answers 2024/2025
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IAS 8 Accounting Policies Exam Questions & Answers 2024/2025
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IAS 8 Accounting Policies ExamQuestions & Answers 2024/2025
How are accounting policies specifically chosen - ANSWERSWhen IFRS specifically applies it must be
used.
In the absence of IFRS standard management uses their judgement in developing and applying a policy
When can management use judgement in choosing an accounting policy - ANSWERSin the abscence of
an IFRS criteria:
Choice must result in information that is
- relevant to decision making
- reliable (reflect accurately financial position, reflect economic substance of transaction, prudent,
complete)
Accounting policies must be - ANSWERSconsistent. Once chosen it must be used for all similar types of
transactions
When can you change a policy (IFRS) - ANSWERS- when the change is required under IFRS
- when the change results in the FS being more reliable and relevant
RELIABLE and RELEVANTA are the key criteria
How are changes in accounting policies applied - ANSWERS- if there are provisions under IFRS follow
those
- if none, apply the change retrospectively
*retrospective application may not be necessary if can prove that it's impractical to do so
- must make decent effort to determine effects. When impractical entity applies change to earliest
period possible
- Restate comparative figures. At very least adjust opening R/E
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