ASCG’s comment letter on the IASB ED/2017/5 (Amendments to IAS 8)

The ASCG has published its comment letter in response to the IASB’s ED/2017/5 Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8) on 3 January 2018. The comment letter was also sent to EFRAG.

In the letter ASCG considers that the IASB proposals will only partially clarify the distinction between a change in accounting policy and a change in an accounting estimate. Therefore the ASCG thinks there is additional need of clarification.

Furthermore the ASCG emphasizes in its letter that providing clarification regarding the terms ‘accounting policy’ and ‘accounting estimate’ is addressing a symptom but not the root cause. The ASCG is of the opinion that the real issue for clarification should be the question in which circumstances retrospective adjustments to prior periods are required to address information needs of users of financial statements. The IASB Exposure Draft does not provide any insights to this question, and the ASCG suggests the IASB consider developing principle based-guidance regarding the circumstances for making retrospective adjustments to prior periods.