Compliance with Australian Accounting Standards (cont.)
Compliance with A-IFRS by for‑profit entities will not lead to compliance with IFRS where the entity is a for‑profit public sector entity to which AAS 29 “ Financial Reporting by Government Departments” applies and the entity has applied a requirement in that Standard that overrides the requirements in an A-IFRS
Balance Sheet – Information to be presented either on the face of the balance sheet or in the notes (cont.)
shares in the entity held by the entity or by its subsidiaries or associates; and
shares reserved for issue under options and contracts for the sale of shares, including the terms and amounts; and
An entity without share capital is required to disclose information equivalent to that required above , showing changes during the period in each category of equity interest, and the rights, preferences and restrictions attaching to each category of equity interest
a description of the nature and purpose of each reserve within equity.
An entity is permitted to change an accounting policy only if the change:
is required by an Australian Accounting Standard; or
results in the financial report providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity’s financial position, financial performance or cash flows.
When retrospective application is required, a change in accounting policy is required to be applied retrospectively except to the extent that it is impracticable to determine either the period specific effects or the cumulative effect of the change
Discussion Question 4.1 – Change in accounting estimate
Yes – even though the original estimate of the outcome was made several years ago, and the case may continue for an additional year, or more, the change in the estimate of the outcome should be charged to the income statement in the year of the change.
When it is impracticable to determine the period-specific effects of an error on comparative information for one or more prior periods presented, the entity is required to restate the opening balances of assets, liabilities and equity for the earliest period for which retrospective restatement is practicable (which may be the current period)
When it is impracticable to determine the cumulative effect , at the beginning of the current period, of an error on all prior periods, the entity is required to restate the comparative information to correct the error prospectively from the earliest date practicable