This confusion has implications when an entity applies the requirements of IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, to a change in a policy or an estimate.
Changes proposed by the International Accounting Standards Board (the Board) are aimed at removing this confusion by clarifying the definition of accounting policies and their relationship with accounting estimates and by adding a definition of accounting estimates.
While the changes go a long way in improving the clarity of the standard, they may create further and different confusion. My suggestions are that:
- the distinction between judgements made at different stages of the financial statement preparation process be explained explicitly in the standard itself; and
- the definition of accounting estimates be amended.
My comment letter can be found here.
rhodespc.ca 