BUSINESS ADMINISTRATION
BUSINESS POLICY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
An entity shall account for a change in accounting policy resulting from the initial application of an IFRS in accordance with the specific transitional provisions, if any, in that IFRS.
|
|
|
When an entity changes an accounting policy upon initial application of an IFRS that does not include specific transitional provisions applying to that change, or changes an accounting policy voluntarily, it shall apply the change retrospectively.
|
|
|
Early application of an IFRS is a voluntary change in accounting policy.
|
|
|
When it is impracticable to determine the period-specific effects of changing an accounting policy on comparative information for one or more prior periods presented, the entity shall apply the new accounting policy to the carrying amounts of assets and liabilities as at the beginning of the earliest period for which retrospective application is practicable.
|
Detailed explanation-1: -A voluntary change in accounting policy is accounted for by retrospective application. Early application of a PFRS is not a voluntary change in accounting policy.
Detailed explanation-2: -Voluntary changes in accounting policy are applied retrospectively, with restatement of comparative information. However relief is available if retrospective application is impracticable as defined by IAS 8. When this is the case, a company applies the new policy from the earliest date practicable.
Detailed explanation-3: -1. An entity shall prepare and present an opening IFRS statement of financial position at the date of transition to IFRSs. This is the starting point for its accounting under IFRSs.
Detailed explanation-4: -Answer and Explanation: The correct answer is d. A change to a different method of depreciation for plant assets. A change to a different method of depreciation for plant assets is not a change in accounting principles.