Scope of " Accounting Effec PAS8 Description treatment adjustment 1. Change in > Changein a. Transitional | > On the accounting measurement provision beginning policy basis. b. Retrospective| balance of application retained c. If (b)is earnings, if impracticable] accountedfor prospective retrospect- application’ i . Change in > Changes inthe > Prospective > In profit or accounting realization (or application Joss of current estimate incurrence) of periodor expected inflow current and (or outflow) of eo future periods economic a if the change benefits from ' affects both. assets (or liabilities). > Intentional and a. Retrospective | >On unintentional restatement beginning misapplication of | b. If (b)is balance of principles, impracticable retained misinterpretation prospective earnings, if of facts and application accounted for mathematical retrospect- mistakes tively.‘Objective and Scope of PAS 8 ‘PAS 8 prescries the criteria fr selecting. applying. and changing accounting policies and the ‘accounting and disclosure of changes in accounting policies, changes in accounting estimates and Correcton of prior period ens. ‘Accounting policies ‘Accounting policies are the speci principles, bases, convention, rules and practices applied by an ‘nity in preparing and presenting financial statements. Thos are the relevant PFRSs adopted by an ‘nity n preparing and presenting is fancial statements, + When itis ificut to sistingush a change in accountng pale ram a change in accounting estimate, the change is teated as a change nan accountng estimate. “his document isthe property of PHINMA EDUCATION. Qc: sepenemnoatsin mina comin see “ snack cee » Section: ‘Schedules Date: + Anenity shall change an accounting poy only ifthe change “ts requied by a PFRS, oF 2 reais oa mote relevant and rele information about an entiy’sNrancial positon, Performance, and eash Rows Examples of changes In accounting policy ‘Change tom FIFO cost formula for vento othe Average cost formula, Change in method af recognizing reveruo trem longterm constuction contact. (Change to anew poli resulting fom the requrement of nev” PFRS, Change of faancaraparing ramevork such a fom PFRS for SMEs to compliance wh ull PERS. Intl edoption of the evaluation model or proper, plan, and equipment and intangible assets. Change from the cost modelo the far vlve model of measuring investment propery. Change in business model for assyng finan asrotsfesling to relassikcaon between franc asset catogores (@cemscannerExamples of changes in accounting estimate Change in depreciation or amortization methods ‘Change in estimated useful lives of depreciable assets ‘Change in estimated residual values of depreciable assets Change in required allowances for impairment losses and uncollectible accounts ‘Changes in fair values less cost to sell on non-current assets held for sale and biological assets Changes in currency exchange rates for foreign currency denominated cash and receivables, Posen Errors + Errors include the effects of: 1. Mathematical mistakes 2. Mistakes in applying accounting policies 3. Oversights or misinterpretations of facts; and 4. Fraud Counterbalancing vs. Non-counterbalancing errors 1. Counterbalancing errors are errors which, if remained uncorrected, are automatically corrected or offset in the next accounting period. Their effect on the financial statements automatically reverses (counterbalance) in the next accounting period. 2. Non-counterbalancing errors are errors which, if remained uncorrected, are not automatically corrected or offset in the next accounting period. (@cemscanner