IASB Publishes Amendments to IAS 1 and IFRS Practice Statement 2, and Amendments to IAS 8

Today, the IASB has issued two amendments: Disclosure of Accounting Policies, which amends IAS 1 and IFRS Practice Statement 2, and Definition of Accounting Estimates, which amends IAS 8.

The amendments to IAS 1 require entities to disclose their material accounting policies (instead of their significant accounting policies). The amendments are intended to help entities improve accounting policy disclosures so that they provide more useful information to investors and other primary users of the financial statements. In addition, the IASB has published amendments to IFRS Practice Statement 2 Making Materiality Judgements. These amendments provide guidance on how to apply the concept of materiality to accounting policy disclosures.

The amendments to IAS 8 clarify how entities should distinguish changes in accounting policies from changes in accounting estimates. That distinction is important because changes in accounting estimates are applied prospectively only to future transactions and other future events, but changes in accounting policies are generally also applied retrospectively to past transactions and other 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.

The amendments are available from the IASB only, and subject to charges (further information).