NZ IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

Question 1

Accounting Policies

Answer 1

Specific principles, bases, conventions, rules and practices used by an entity in preparing its financial statements

The principles by which amounts are recognised and measured

if it provides more relevant and reliable information.

Question 2

Changes in accounting estimate

Answer 2

Results from the assessment of present status of assets and liabilities and their expected future benefits and obligations.

New information = asset or liability balance may need to be updated.

A revision of an accounting estimate as new information becomes
known, meaning the original estimate was still correct at the time.
Therefore, they are not corrections of errors.

Question 3

Prior period errors

Answer 3

Misstatements in previous financial statements that arose from misusing or not using reliable information that:
* was available when those financial statements were authorised for issue.
* could reasonably have been expected to be taken into account in preparing those Financial Statements.

ie math mistakes, fraud, misinterpretations of facts

Question 4

Disclosure requirments

Answer 4

1. The nature of the change in accounting policy
2. the reasons why the new policy provides reliable and more relevant information

Question 5

Restating/Disclosure requirements Prior Period Errors

Answer 5

1. Restating the comparative amounts for the prior period
2. For errors before the earliest prior period shown in the financial statements, restating opening balances of assets, liabilities and equity, for the earliest prior period shown
3. Restating historical summaries of financial statements as far back as possible (paragraph 4

disclosures:
1. the nature of the error
2. the amount of the correction for each financial statement line item affected