summary financial statement (week 11).docx

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SUMMARY FINANCIAL STATEMENT Change in accounting policy occurs where there is any change to any one of the components of: Recognition criteria: when and whether the element is recognised Measurement basis: how much of the element is recognised Method of presentation: how the element is presented in financial statement Accounting policies must be applied consistently for similar items Changes in accounting policies are allowed if one of two following circumstance is fulfilled: (a) Initial application of HKFRS (b) Voluntary changes: provide reliable and more relevant information after change An entity should distinguish whether the changes is under either one of the following two circumstance: the change is resulted from an initial application of HKFRS and there are specific transitional provision in the HKFRS other circumstance: (1) the initial application of HKFRS but the HKFRS has no specific transitional provision (2) voluntary changes in accounting policy retrospective application Retrospective application is applying a new accounting policy to transactions, other events and conditions as if that policy had always been applied requirement to apply: (1) the opening balance of each affected component of equity for the earliest prior period presented (2) the other comparative amounts disclosed for each prior presented as if the new
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Christopher Reinemann
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