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Your Notes

CHAPTER
ACCOUNTING POLICIES,
CHANGES IN ACCOUNTING
ESTIMATES AND ERRORS

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OVERVIEW Your Notes

What will you learn?

IAS 8 Accounting policies, Changes in accounting estimates and Errors

The definition of some relevant terminologies

Changes in
Accounting policies Errors
accounting estimates

Selection of
accounting policies

Changes in
accounting policies

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I. SCOPE AND OBJECTIVE Your Notes

1. Scope of IAS 34

2. Objective of IAS 34
IAS 34 prescribes the principles for preparing and reporting information about the financial
position, performance and changes in financial position of an entity for less than a full
financial year or for a 12-month period ending on a date other than the entity's financial
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year end.
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II. CONTENT OF AN INTERIM FINANCIAL REPORTING Your Notes

1. Content of an Interim Financial Reporting

A condensed statement of financial position
should include each of the major components of assets,
liabilities and equity which were presented in the most recent
annual statement of financial position.
A condensed statement of profit or loss and OCI
should include revenue; each component of income and
expense; basic and diluted earnings per share (if the entity is
within the scope of IAS 33).
A condensed statement of changes in equity
should include each of the major components of equity
presented in the most recent annual statement of
changes in equity.
A condensed statement of cash flows
should include the three major subtotals of cash flows
required by IAS 7 Statement of Cash Flows.

Selected note disclosures

should include an explanation of events & transactions
which are significant to an understanding of the changes in
financial position and performance.

KEY POINT
Interim statements provide an update on the latest set of annual financial
statements and so focus on new activities, events and circumstances, and should not
duplicate information previously reported.

Exam advice: The application of IAS 34 is not examinable. 4