IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
IAS 8 prescribes criteria for the selection of accounting policies. It also clarifies when a change in accounting policy is acceptable and provides guidance on the accounting treatment of such changes, as well as changes in accounting estimates and errors.
Published December 2003. Effective 1 January 2005.
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Synopsis (including link to unaccompanied version of IAS 8)
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As a result of the IASB’s ongoing Disclosure Initiative, three projects are active in relation to IAS 8:
A project to amend IAS 8 to clarify the distinction between a change in accounting policy and a change in accounting estimate. ED/2017/5 Accounting Policies and Accounting Estimates – Proposed amendments to IAS 8 was issued in September 2017. This proposes that the definition of an accounting policy is changed to be clearer and more concise and that the current definition of a change in accounting estimate is changed to be a definition of an accounting estimate. Read ED/2017/5 Accounting Policies and Accounting Estimates – Proposed amendments to IAS 8
A project to refine the definition of materiality and clarify its characteristics. An exposure draft was issued in October 2017 which proposes that the IAS 8 definition of material is modified to refer to the fact that obscuring information has a similar effect as omitting information; change the phrase ‘could influence’ to ‘could reasonably be expected to influence’; and emphasise primary users. Read ED/2017/6 Definition of Material – Proposed Amendments to IAS 1 and IAS 8
UK reduced disclosures
UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.
Amendments to the standard
There are no amendments to IAS 8 in order to comply with the Companies Act and related Regulation.
FRS 101 paragraph 8(i) states that a qualifying entity is exempt from the IAS 8 requirement to disclose details of a new IFRS which has been issued but is not yet effective and has not been applied by the entity.
IAS 8 paragraphs for which exemption is available: 30 and 31.