United States

Proposed narrow-scope amendments to IAS 8


Under International Accounting Standard (IAS) 8, Accounting Policies, Changes in Accounting Estimates and Errors, an entity may change an accounting policy only if the change is required by an International Financial Reporting Standard (IFRS) or results in improving the usefulness of information provided to its financial statement users. A common reason why an entity voluntarily changes an accounting policy is to reflect explanatory material included in agenda decisions published by the IFRS Interpretations Committee. An agenda decision is non-authoritative and, therefore, any resulting change is not required by IFRS Standards.

IAS 8 requires an entity to apply a voluntary change in accounting policy retrospectively as if it had always applied the new policy, except to the extent it is impracticable to do so. To facilitate voluntary changes in accounting policy that result from an agenda decision, the International Accounting Standards Board recently proposed narrow-scope amendments to IAS 8 to lower the impracticability threshold for retrospective application of such changes. The proposed threshold would include consideration of the expected benefits to users of financial statements of applying the new accounting policy retrospectively and the cost to the entity of determining the effects of retrospective application.

The proposal, Accounting Policy Changes – Proposed amendments to IAS 8, is available for comment until July 27, 2018.