On or about 12 February 2021, the International Accounting Standards Board (IASB) has issued narrow-scope amendments to the IFRS Standards to improve accounting policy disclosures and distinguish changes in accounting estimates from changes in accounting policies.
The IASB has issued amendments to:
- IAS 1 Presentation of Financial Statements where companies are now required to disclose their material accounting policy information rather than their significant accounting policies
- IFRS Practice Statement 2 Making Materiality Judgements where the amendments provide guidance on how to apply the concept of materiality to accounting policy disclosures, and
- IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors where the amendments help companies to distinguish between changes in accounting policies and changes in accounting estimates. Changes in accounting estimates are applied prospectively only to future transactions and future events, while changes in accounting policies are generally also applied retrospectively to past transactions and past events.
The amendments to IAS 1 and IAS 8 will be effective for annual reporting periods beginning on or after 1 January 2023, with early application permitted.
Source: IFRS, 13 February 2021