Project Objective
The objective of the proposed amendment is to clarify the existing distinction between accounting policies and accounting estimates.
In September 2014 the IFRS Interpretations Committee informed the IASB about divergent practices regarding the assessment of whether an accounting change represents a change in accounting policy, or a change in accounting estimate, in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
In its April 2016 meeting, the Board tentatively decided to amend the definitions of accounting policies and changes in accounting estimates in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors in order to:
- clarify the definitions of accounting policies and of changes in accounting estimates with the objective of making them more concise and distinctive;
- clarify how accounting policies and estimates relate to each other;
- add guidance about whether changes in valuation techniques and in estimation techniques are changes in accounting estimates; and
- update examples of estimates provided in IAS 8.