The IASB Proposes an Amendment to IAS 8 re: Accounting Policy Changes

On March 27th, the IASB issued an Exposure Draft (ED) proposing a narrow scope amendment to IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors.

The ED proposes an amendment to guidance on the accounting for a change in accounting policy resulting from a decision to adopt a position expressed in an agenda decision by the IFRS Interpretations Committee (the IFRIC).

As explained on the IASB’s website, currently, “companies may decide to change an accounting policy as a result of an agenda decision published by the IFRS Interpretations Committee.  [IFRIC agenda] decisions explain why the Interpretations Committee concludes that there is no need to amend or add to requirements in IFRS Standards after considering an application question. Agenda decisions are non-authoritative but often contain helpful explanatory information about how to apply IFRS Standards.”

In accordance with IAS 8, when a company changes an accounting policy, it is currently required to apply the new policy as if it had always applied this policy―unless this is not practicable.  In the ED, the IASB “is proposing that in deciding how far back to go in applying a change in accounting policy that results from an [IFRIC[ agenda decision, a company will consider not only whether it is practicable but also the benefits to users and costs to the company of making the change.”

Comments on the ED are due to the IASB no later than July 27, 2018.

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