IAS 8Chapter 5Lesson 3
Recognising a change in estimate and explaining it
Step 1 of 9Learning objectives
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The effect of a change in estimate is recognised prospectively in profit or loss: in the period of the change, and also in future periods if they are affected. When it changes an asset, a liability or an item of equity, its carrying amount is adjusted in the period of the change. The notes disclose the nature and amount of the effect, including on future periods, unless impracticable, a fact that must then be disclosed.
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Learning objectives
- Calculate the revised charge after a change in useful life, residual value or method.
- Record the effect of a change in estimate in profit or loss or by adjusting a carrying amount.
- Draft the disclosure of the nature and amount of the change, including the future effect.