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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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How standards trackers work

Financial Reporting Faculty members get full access. Login to get the version of the standard relevant to specific time periods via eIFRS.

ICAEW members and non-members can view a brief synopsis, amendments and details of current proposals.

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.

Synopsis

  • Accounting policies should be determined by reference to the relevant IFRS
  • If there is no relevant IFRS, management should use judgement to select a policy which results in reliable and relevant financial information
  • A change in an accounting policy is permitted only where it is required by an IFRS or it results in more relevant and reliable information
  • Changes in accounting policy should be applied retrospectively
  • Changes in accounting estimate should be applied prospectively
  • Errors should be corrected retrospectively

Which version of the standard?

'Which version of the standard?' is only available to members of the Financial Reporting Faculty. Please note that to access electronic versions of IFRS through the links in these standard trackers you need to have first logged into eIFRS.

Recent amendments

Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.

1. IFRS 9 Financial Instruments amendment to IAS 8

Effective for annual periods beginning on or after 1 January 2018. Earlier application is permitted.

The issue of IFRS 9 amends IAS 8 to delete an example of a prior period error relating to an item classified in accordance with IAS 39.

2. Amendments to References to the Conceptual Framework in IFRS Standards – amendment to IAS 8*

Effective for annual periods beginning on or after 1 January 2020. Earlier application is permitted, if at the same time an entity also applies the amendments to other IFRS Standards.

IAS 8 is amended to refer to the 2018 Conceptual Framework rather than the Framework in respect of definitions of items, recognition criteria and measurement concepts.

3 Definition of Material amendments to IAS 8*

To be applied to annual periods beginning on or after 1 January 2020. Earlier application is permitted.

The definition of material is amended to be that given in IAS 1 (as amended):

Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.

*Not EU endorsed as at 25 March 2019. Read more on EU Endorsement

The following interpretations refer to IAS 8

Current proposals

As a result of the IASB’s ongoing Disclosure Initiative, two projects are active in relation to 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.

Disclosure exemptions

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.

This page was last updated 25 March 2019