Page 240 - F1 Integrated Workbook STUDENT 2018
P. 240
Chapter 14
Changes in estimates
When preparing financial statements, inherent uncertainties result in estimates
having to be made and subsequently, these estimates may need to be revised.
Distinguishing between changes in accounting policies and accounting estimates
may be difficult. In these circumstances, the change is to be treated as a change in
an accounting estimate.
Changes in accounting estimates should be accounted for prospectively. This means
that the revised estimate should be included in the calculation of net profit or loss for
the current period and future periods if appropriate.
Apply prospectively:
change current and future periods
disclose if change material.
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