CAF-1 · Chapter 10 · Question 11 of 15
When a company finds it difficult to distinguish whether a change is a change in accounting policy or a change in accounting estimate, how must it treat the change?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) As a change in accounting estimate.
Explanation
IAS 8 explicitly states that when it is difficult to distinguish a change in an accounting policy from a change in an accounting estimate, the change is treated as a change in an accounting estimate.
More IAS 8 Accounting Policies, Estimates and Errors MCQs
- Q13If a change in accounting estimate gives rise to changes in assets, liabilities, or equity, when should this adjustment be recognized?
- Q14Which of the following details must be disclosed when a voluntary change in accounting policy is made?
- Q15During the current year, a company discovers that it accidentally completely omitted a material sales invoice from the previous year's…
- Q1Under IAS 8, which of the following situations qualifies as a valid reason to voluntarily change an accounting policy?
- Q2How should an entity account for a change in the depreciation method of a machine from straight-line to reducing balance?