Page 19 - Finac1 Test 1 slides - 6. IAS 8

IAS 8

Accounting estimates

• The effect of a change in accounting estimate should be
included in the determination of net profit or loss

prospectively in

• the period of the change, if the change effects that period only; or

• the period of the change and future periods, if the change affects both
(IAS 8.36).

• The useful life of any item of property, plant and equipment and the
depreciation method that is applied, should be revised periodically.

• When it is apparent that an adjustment is required in either of the two
cases, the adjustment is treated as a change in estimate in agreement
with IAS 8.

• The depreciation charges for the current and future periods are

adjusted and no adjustment is made to the depreciation charges of
prior years.

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