7 accounting policies disclosure of accounting

  • No School
  • AA 1
  • 31

This preview shows page 7 - 17 out of 31 pages.

7
Image of page 7

Subscribe to view the full document.

Accounting policies Disclosure of accounting policies: Second, the note should disclose the measurement basis or bases used in preparing the financial statements. Third, the notes should provide a description of accounting policies. Fourth, the notes should disclose those judgements. 8
Image of page 8
Accounting policies Disclosure of accounting policies: Finally, the notes should disclose information about the assumptions made concerning the future. 9
Image of page 9

Subscribe to view the full document.

Accounting policies Disclosure of changes in accounting policies: Paragraph 13 of AASB 108/IAS 8 requires that an entity must apply accounting policies consistently for similar transactions, events or conditions unless otherwise required by an accounting standard. 10
Image of page 10
Accounting policies Disclosure of changes in accounting policies: Paragraph 14 specifies only two circumstances in which an entity is permitted to change an accounting policy. These are: if the change is required by an accounting standard 11
Image of page 11

Subscribe to view the full document.

Accounting policies Disclosure of changes in accounting policies: Paragraph 14 specifies only two circumstances in which an entity is permitted to change an accounting policy. These are: if the change, made voluntarily, results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity’s financial position, financial performance or cash flows. 12
Image of page 12
Accounting policies Disclosure of changes in accounting policies: Adoption of a new or revised accounting standard: If a change in an accounting policy is made as a result of the adoption of a new or revised accounting standard, paragraph 28 of AASB 108/IAS 8 details the information that the entity is required to disclose. 13
Image of page 13

Subscribe to view the full document.

Accounting policies Disclosure of changes in accounting policies Voluntary changes in accounting policies: Paragraph 29 of AASB 108/IAS 8 provides information about the required disclosures. 14
Image of page 14
Changes in accounting estimates As stated in paragraph 33 of AASB 108/IAS 8: ‘the use of reasonable estimates is an essential part of the preparation of financial statements and does not undermine their reliability’. In business, many estimates are made of accounting information because of the uncertainty of future events. 15
Image of page 15

Subscribe to view the full document.

Changes in accounting estimates Therefore, it is not surprising that companies will revise their accounting estimates as new information becomes available or subsequent developments occur.
Image of page 16
Image of page 17
  • Fall '19

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes