IAS 8Workpapers (Step 4 of 5)

Workpaper template

Step 4 of 5

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors — wording before IFRS 18Applicable today

Applies to annual periods beginning before January 1, 2027.

WorkpaperIAS 8 — Accounting Policies, Changes in Accounting Estimates and ErrorsL1 · L2 · L3

Change in estimate: prospective calculation

4 missions11 sections to document35 min

Prepared by: AI-assisted draft
Reviewed by: Not reviewed — human review required
Status: Published

Objective of the workpaper

For a revised estimate (useful life, residual value, loss allowance, provision), confirm that it is a change in accounting estimate, start from the carrying amount at the date of change, compute the new charge or the adjustment of the carrying amount, the effect on the period and on future periods, post the entry of the period and prepare the disclosure of the nature and amount of the change.

11 sections · 32 blocks · 6 calculations · 4 entries

IAS 8 §5
IAS 8 §32
IAS 8 §32A
IAS 8 §34
IAS 8 §34A
IAS 8 §35
IAS 8 §36
IAS 8 §37
IAS 8 §38
IAS 8 §39
IAS 8 §40

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

4 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity

Revision of the useful life and residual value of a vehicle fleet

Case tasks documented here

Compute the carrying amount of the fleet at the date of change.
Compute the revised annual charge.
Post the 20X5 charge.
Quantify the effect of the change on 20X5 and on future periods, to be disclosed in the notes.

Inputs

Revised estimate: item, previous and new assumption, origin
TextRequired
FLEET_LIFE_7_YEARS_RESIDUAL_REVISED
Date of the change
DateRequired
20X5-01-01
Cost of the asset
Number
1,440,000
Accumulated depreciation at the date of change
Number
450,000
Accumulated impairment at the date of change
Number
New residual value
Number
150,000
Remaining useful life at the date of change
Number
4 years
Annual charge before the change
Number
150,000
Revised loss allowance
Number
Loss allowance recognised before revision
Number
Revised provision
Number
Provision recognised before revision
Number

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Nature of the change and recognition

Analysis

IAS 8 §5IAS 8 §32IAS 8 §32AIAS 8 §34IAS 8 §34AIAS 8 §35IAS 8 §36IAS 8 §37

Points reviewed
ChecklistRequired
- Monetary amount subject to measurement uncertainty
- Estimate serving the policy (for example: depreciation charge)
- Measurement technique and inputs identified
- New information or new circumstances: not an error
- Change in input or technique: change in estimate
- No change in measurement basis
- Effect in profit or loss of the period and of the future periods affected
- Change in an asset or liability: carrying amount adjusted

Revised charge (asset)

Calculations

IAS 8 §36IAS 8 §38

Carrying amount at the date of change
Calculation
990,000
Cost of the asset ; − Accumulated depreciation at the date of change ; − Accumulated impairment at the date of change
Revised annual charge
Calculation
210,000
Carrying amount at the date of change ; New residual value ; Remaining useful life at the date of change
IFRS rule: prospective recognition (para. 36). Calculation assumption: the carrying amount at the date of change, less the new residual value, is spread over the remaining life (straight-line method chosen by the case).
Effect on the charge of each period affected (revised − previous)
Calculation
60,000
Revised annual charge ; − Annual charge before the change

Revision of a loss allowance or a provision

Calculations

IAS 8 §36IAS 8 §37

Increase in the loss allowance
Calculation
0
Revised loss allowance ; − Loss allowance recognised before revision
Increase in the provision
Calculation
0
Revised provision ; − Provision recognised before revision
Decrease in the provision (reversal)
Calculation
0
Revised provision ; − Provision recognised before revision

Journal entries

Entries

Charge of the period under the new estimate
Entry
Account Debit Credit
Depreciation expense 210,000
Accumulated depreciation 210,000
Increase in the loss allowance on receivables
Entry
Debit Impairment loss on receivables ← Increase in the loss allowance ; Credit Loss allowance ← Increase in the loss allowance
Increase in the provision
Entry
Debit Provision expense ← Increase in the provision ; Credit Provision ← Increase in the provision
Reversal of the provision
Entry
Debit Provision ← Decrease in the provision (reversal) ; Credit Reversal of provision (income) ← Decrease in the provision (reversal)

Account	Debit	Credit
Depreciation expense	210,000
Accumulated depreciation		210,000

Qualification of the change

Judgment

IAS 8 §5IAS 8 §34IAS 8 §34AIAS 8 §35

Origin of the revision
JudgmentRequired
New information or more experience
Change in an input / Change in a measurement technique / New information or more experience
Professional judgement: the choice of inputs (lives, rates, statistics) is a management matter based on the facts of the case; IAS 8 imposes no value.
Rationale: facts relied on, analysis, alternative rejected
TextRequired
MORE_INTENSIVE_USE_AND_LOWER_RESALE_PRICES
Classification
JudgmentRequired
Change in accounting estimate
Change in accounting estimate / Change in accounting policy / Prior period error
Rationale: facts relied on, analysis, alternative rejected
TextRequired
SAME_METHOD_NEW_ESTIMATES_NO_RESTATEMENT

Disclosure of the change in estimate

Disclosure

IAS 8 §39IAS 8 §40

Points reviewed
ChecklistRequired
- Nature of the change
- Amount of the effect on the period
- Expected effect on future periods
- Statement of impracticability if the future effect is not estimated

Conclusion

Change in estimate, entry and disclosure
ConclusionRequired

Effect on the financial statements

FS impact

Effect of the entries, line by line (derived from the entries)
TableRequired

Normative references

References

Normative references
References

Checks and financial statement impact

Origin of the revision documentedPass
Classification documentedPass
Balanced entryPass
Balanced entryNot evaluated
Balanced entryNot evaluated
Balanced entryNot evaluated

Assets: -210,000
Liabilities: 0
Profit or loss: -210,000
OCI: 0
Equity: -210,000

File and entity

Receivables impairment: change in technique, revision of a provision or error? Classification and disclosure

Case tasks documented here

Quantify the effect of revisions (a) and (b).
Post the entries for (a), (b) and (c).
Draft the disclosure of the changes in estimates and identify the missing information.

Inputs

Revised estimate: item, previous and new assumption, origin
TextRequired
LOSS_ALLOWANCE_ROLL_RATE_MODEL
Date of the change
DateRequired
20X5-12-31
Cost of the asset
Number
Accumulated depreciation at the date of change
Number
Accumulated impairment at the date of change
Number
New residual value
Number
Remaining useful life at the date of change
Number
Annual charge before the change
Number
Revised loss allowance
Number
312,000
Loss allowance recognised before revision
Number
268,000
Revised provision
Number
Provision recognised before revision
Number

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Nature of the change and recognition

Analysis

IAS 8 §5IAS 8 §32IAS 8 §32AIAS 8 §34IAS 8 §34AIAS 8 §35IAS 8 §36IAS 8 §37

Points reviewed
ChecklistRequired
- Monetary amount subject to measurement uncertainty
- Estimate serving the policy (for example: depreciation charge)
- Measurement technique and inputs identified
- New information or new circumstances: not an error
- Change in input or technique: change in estimate
- No change in measurement basis
- Effect in profit or loss of the period and of the future periods affected
- Change in an asset or liability: carrying amount adjusted

Revised charge (asset)

Calculations

IAS 8 §36IAS 8 §38

Carrying amount at the date of change
Calculation
0
Cost of the asset ; − Accumulated depreciation at the date of change ; − Accumulated impairment at the date of change
Revised annual charge
Calculation
Carrying amount at the date of change ; New residual value ; Remaining useful life at the date of change
IFRS rule: prospective recognition (para. 36). Calculation assumption: the carrying amount at the date of change, less the new residual value, is spread over the remaining life (straight-line method chosen by the case).
Effect on the charge of each period affected (revised − previous)
Calculation
0
Revised annual charge ; − Annual charge before the change

Revision of a loss allowance or a provision

Calculations

IAS 8 §36IAS 8 §37

Increase in the loss allowance
Calculation
44,000
Revised loss allowance ; − Loss allowance recognised before revision
Increase in the provision
Calculation
0
Revised provision ; − Provision recognised before revision
Decrease in the provision (reversal)
Calculation
0
Revised provision ; − Provision recognised before revision

Journal entries

Entries

Charge of the period under the new estimate
Entry
Debit Depreciation expense ← Revised annual charge ; Credit Accumulated depreciation ← Revised annual charge
Increase in the loss allowance on receivables
Entry
Account Debit Credit
Impairment loss on receivables 44,000
Loss allowance 44,000
Increase in the provision
Entry
Debit Provision expense ← Increase in the provision ; Credit Provision ← Increase in the provision
Reversal of the provision
Entry
Debit Provision ← Decrease in the provision (reversal) ; Credit Reversal of provision (income) ← Decrease in the provision (reversal)

Account	Debit	Credit
Impairment loss on receivables	44,000
Loss allowance		44,000

Qualification of the change

Judgment

IAS 8 §5IAS 8 §34IAS 8 §34AIAS 8 §35

Origin of the revision
JudgmentRequired
Change in a measurement technique
Change in an input / Change in a measurement technique / New information or more experience
Professional judgement: the choice of inputs (lives, rates, statistics) is a management matter based on the facts of the case; IAS 8 imposes no value.
Rationale: facts relied on, analysis, alternative rejected
TextRequired
NEW_DATA_ENABLE_ROLL_RATE_TECHNIQUE
Classification
JudgmentRequired
Change in accounting estimate
Change in accounting estimate / Change in accounting policy / Prior period error
Rationale: facts relied on, analysis, alternative rejected
TextRequired
SAME_MEASUREMENT_OBJECTIVE_NEW_TECHNIQUE

Disclosure of the change in estimate

Disclosure

IAS 8 §39IAS 8 §40

Points reviewed
ChecklistRequired
- Nature of the change
- Amount of the effect on the period
- Expected effect on future periods
- Statement of impracticability if the future effect is not estimated

Conclusion

Change in estimate, entry and disclosure
ConclusionRequired

Effect on the financial statements

FS impact

Effect of the entries, line by line (derived from the entries)
TableRequired

Normative references

References

Normative references
References

Checks and financial statement impact

Origin of the revision documentedPass
Classification documentedPass
Balanced entryNot evaluated
Balanced entryPass
Balanced entryNot evaluated
Balanced entryNot evaluated

Assets: -44,000
Liabilities: 0
Profit or loss: -44,000
OCI: 0
Equity: -44,000

File and entity

Receivables impairment: change in technique, revision of a provision or error? Classification and disclosure

Case tasks documented here

Quantify the effect of revisions (a) and (b).
Post the entries for (a), (b) and (c).
Draft the disclosure of the changes in estimates and identify the missing information.

Inputs

Revised estimate: item, previous and new assumption, origin
TextRequired
RETURNS_PROVISION_NEW_STATISTICS
Date of the change
DateRequired
20X5-12-31
Cost of the asset
Number
Accumulated depreciation at the date of change
Number
Accumulated impairment at the date of change
Number
New residual value
Number
Remaining useful life at the date of change
Number
Annual charge before the change
Number
Revised loss allowance
Number
Loss allowance recognised before revision
Number
Revised provision
Number
118,000
Provision recognised before revision
Number
150,000

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Nature of the change and recognition

Analysis

IAS 8 §5IAS 8 §32IAS 8 §32AIAS 8 §34IAS 8 §34AIAS 8 §35IAS 8 §36IAS 8 §37

Points reviewed
ChecklistRequired
- Monetary amount subject to measurement uncertainty
- Estimate serving the policy (for example: depreciation charge)
- Measurement technique and inputs identified
- New information or new circumstances: not an error
- Change in input or technique: change in estimate
- No change in measurement basis
- Effect in profit or loss of the period and of the future periods affected
- Change in an asset or liability: carrying amount adjusted

Revised charge (asset)

Calculations

IAS 8 §36IAS 8 §38

Carrying amount at the date of change
Calculation
0
Cost of the asset ; − Accumulated depreciation at the date of change ; − Accumulated impairment at the date of change
Revised annual charge
Calculation
Carrying amount at the date of change ; New residual value ; Remaining useful life at the date of change
IFRS rule: prospective recognition (para. 36). Calculation assumption: the carrying amount at the date of change, less the new residual value, is spread over the remaining life (straight-line method chosen by the case).
Effect on the charge of each period affected (revised − previous)
Calculation
0
Revised annual charge ; − Annual charge before the change

Revision of a loss allowance or a provision

Calculations

IAS 8 §36IAS 8 §37

Increase in the loss allowance
Calculation
0
Revised loss allowance ; − Loss allowance recognised before revision
Increase in the provision
Calculation
0
Revised provision ; − Provision recognised before revision
Decrease in the provision (reversal)
Calculation
32,000
Revised provision ; − Provision recognised before revision

Journal entries

Entries

Charge of the period under the new estimate
Entry
Debit Depreciation expense ← Revised annual charge ; Credit Accumulated depreciation ← Revised annual charge
Increase in the loss allowance on receivables
Entry
Debit Impairment loss on receivables ← Increase in the loss allowance ; Credit Loss allowance ← Increase in the loss allowance
Increase in the provision
Entry
Debit Provision expense ← Increase in the provision ; Credit Provision ← Increase in the provision
Reversal of the provision
Entry
Account Debit Credit
Provision 32,000
Reversal of provision (income) 32,000

Account	Debit	Credit
Provision	32,000
Reversal of provision (income)		32,000

Qualification of the change

Judgment

IAS 8 §5IAS 8 §34IAS 8 §34AIAS 8 §35

Origin of the revision
JudgmentRequired
New information or more experience
Change in an input / Change in a measurement technique / New information or more experience
Professional judgement: the choice of inputs (lives, rates, statistics) is a management matter based on the facts of the case; IAS 8 imposes no value.
Rationale: facts relied on, analysis, alternative rejected
TextRequired
MORE_DETAILED_RETURN_STATISTICS
Classification
JudgmentRequired
Change in accounting estimate
Change in accounting estimate / Change in accounting policy / Prior period error
Rationale: facts relied on, analysis, alternative rejected
TextRequired
REVISION_FROM_NEW_INFORMATION

Disclosure of the change in estimate

Disclosure

IAS 8 §39IAS 8 §40

Points reviewed
ChecklistRequired
- Nature of the change
- Amount of the effect on the period
- Expected effect on future periods
- Statement of impracticability if the future effect is not estimated

Conclusion

Change in estimate, entry and disclosure
ConclusionRequired

Effect on the financial statements

FS impact

Effect of the entries, line by line (derived from the entries)
TableRequired

Normative references

References

Normative references
References

Checks and financial statement impact

Origin of the revision documentedPass
Classification documentedPass
Balanced entryNot evaluated
Balanced entryNot evaluated
Balanced entryNot evaluated
Balanced entryPass

Assets: 0
Liabilities: -32,000
Profit or loss: 32,000
OCI: 0
Equity: 32,000

File and entity

Review file of accounting changes and restatements of a retail group

Case tasks documented here

Compute the revised racking charge and the effect of the change.
Present the entries: restatements, Vasquerel Jardin adjustment, racking and reuse credits.

Inputs

Revised estimate: item, previous and new assumption, origin
TextRequired
RACKING_LIFE_AND_RESIDUAL_REVISED
Date of the change
DateRequired
20X5-01-01
Cost of the asset
Number
900,000
Accumulated depreciation at the date of change
Number
360,000
Accumulated impairment at the date of change
Number
New residual value
Number
60,000
Remaining useful life at the date of change
Number
4 years
Annual charge before the change
Number
90,000
Revised loss allowance
Number
Loss allowance recognised before revision
Number
Revised provision
Number
Provision recognised before revision
Number

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Nature of the change and recognition

Analysis

IAS 8 §5IAS 8 §32IAS 8 §32AIAS 8 §34IAS 8 §34AIAS 8 §35IAS 8 §36IAS 8 §37

Points reviewed
ChecklistRequired
- Monetary amount subject to measurement uncertainty
- Estimate serving the policy (for example: depreciation charge)
- Measurement technique and inputs identified
- New information or new circumstances: not an error
- Change in input or technique: change in estimate
- No change in measurement basis
- Effect in profit or loss of the period and of the future periods affected
- Change in an asset or liability: carrying amount adjusted

Revised charge (asset)

Calculations

IAS 8 §36IAS 8 §38

Carrying amount at the date of change
Calculation
540,000
Cost of the asset ; − Accumulated depreciation at the date of change ; − Accumulated impairment at the date of change
Revised annual charge
Calculation
120,000
Carrying amount at the date of change ; New residual value ; Remaining useful life at the date of change
IFRS rule: prospective recognition (para. 36). Calculation assumption: the carrying amount at the date of change, less the new residual value, is spread over the remaining life (straight-line method chosen by the case).
Effect on the charge of each period affected (revised − previous)
Calculation
30,000
Revised annual charge ; − Annual charge before the change

Revision of a loss allowance or a provision

Calculations

IAS 8 §36IAS 8 §37

Increase in the loss allowance
Calculation
0
Revised loss allowance ; − Loss allowance recognised before revision
Increase in the provision
Calculation
0
Revised provision ; − Provision recognised before revision
Decrease in the provision (reversal)
Calculation
0
Revised provision ; − Provision recognised before revision

Journal entries

Entries

Charge of the period under the new estimate
Entry
Account Debit Credit
Depreciation expense 120,000
Accumulated depreciation 120,000
Increase in the loss allowance on receivables
Entry
Debit Impairment loss on receivables ← Increase in the loss allowance ; Credit Loss allowance ← Increase in the loss allowance
Increase in the provision
Entry
Debit Provision expense ← Increase in the provision ; Credit Provision ← Increase in the provision
Reversal of the provision
Entry
Debit Provision ← Decrease in the provision (reversal) ; Credit Reversal of provision (income) ← Decrease in the provision (reversal)

Account	Debit	Credit
Depreciation expense	120,000
Accumulated depreciation		120,000

Qualification of the change

Judgment

IAS 8 §5IAS 8 §34IAS 8 §34AIAS 8 §35

Origin of the revision
JudgmentRequired
New information or more experience
Change in an input / Change in a measurement technique / New information or more experience
Professional judgement: the choice of inputs (lives, rates, statistics) is a management matter based on the facts of the case; IAS 8 imposes no value.
Rationale: facts relied on, analysis, alternative rejected
TextRequired
ACCELERATED_WEAR
Classification
JudgmentRequired
Change in accounting estimate
Change in accounting estimate / Change in accounting policy / Prior period error
Rationale: facts relied on, analysis, alternative rejected
TextRequired
SAME_POLICY_NEW_ESTIMATES

Disclosure of the change in estimate

Disclosure

IAS 8 §39IAS 8 §40

Points reviewed
ChecklistRequired
- Nature of the change
- Amount of the effect on the period
- Expected effect on future periods
- Statement of impracticability if the future effect is not estimated

Conclusion

Change in estimate, entry and disclosure
ConclusionRequired

Effect on the financial statements

FS impact

Effect of the entries, line by line (derived from the entries)
TableRequired

Normative references

References

Normative references
References

Checks and financial statement impact

Origin of the revision documentedPass
Classification documentedPass
Balanced entryPass
Balanced entryNot evaluated
Balanced entryNot evaluated
Balanced entryNot evaluated

Assets: -120,000
Liabilities: 0
Profit or loss: -120,000
OCI: 0
Equity: -120,000

Inputs

Revised estimate: item, previous and new assumption, origin
TextRequired
Date of the change
DateRequired
Cost of the asset
Number
Accumulated depreciation at the date of change
Number
Accumulated impairment at the date of change
Number
New residual value
Number
Remaining useful life at the date of change
Number
Annual charge before the change
Number
Revised loss allowance
Number
Loss allowance recognised before revision
Number
Revised provision
Number
Provision recognised before revision
Number

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Nature of the change and recognition

Analysis

IAS 8 §5IAS 8 §32IAS 8 §32AIAS 8 §34IAS 8 §34AIAS 8 §35IAS 8 §36IAS 8 §37

Points reviewed
ChecklistRequired
- Monetary amount subject to measurement uncertainty
- Estimate serving the policy (for example: depreciation charge)
- Measurement technique and inputs identified
- New information or new circumstances: not an error
- Change in input or technique: change in estimate
- No change in measurement basis
- Effect in profit or loss of the period and of the future periods affected
- Change in an asset or liability: carrying amount adjusted

Revised charge (asset)

Calculations

IAS 8 §36IAS 8 §38

Carrying amount at the date of change
Calculation
Cost of the asset ; − Accumulated depreciation at the date of change ; − Accumulated impairment at the date of change
Revised annual charge
Calculation
Carrying amount at the date of change ; New residual value ; Remaining useful life at the date of change
IFRS rule: prospective recognition (para. 36). Calculation assumption: the carrying amount at the date of change, less the new residual value, is spread over the remaining life (straight-line method chosen by the case).
Effect on the charge of each period affected (revised − previous)
Calculation
Revised annual charge ; − Annual charge before the change

Revision of a loss allowance or a provision

Calculations

IAS 8 §36IAS 8 §37

Increase in the loss allowance
Calculation
Revised loss allowance ; − Loss allowance recognised before revision
Increase in the provision
Calculation
Revised provision ; − Provision recognised before revision
Decrease in the provision (reversal)
Calculation
Revised provision ; − Provision recognised before revision

Journal entries

Entries

Charge of the period under the new estimate
Entry
Debit Depreciation expense ← Revised annual charge ; Credit Accumulated depreciation ← Revised annual charge
Increase in the loss allowance on receivables
Entry
Debit Impairment loss on receivables ← Increase in the loss allowance ; Credit Loss allowance ← Increase in the loss allowance
Increase in the provision
Entry
Debit Provision expense ← Increase in the provision ; Credit Provision ← Increase in the provision
Reversal of the provision
Entry
Debit Provision ← Decrease in the provision (reversal) ; Credit Reversal of provision (income) ← Decrease in the provision (reversal)

Qualification of the change

Judgment

IAS 8 §5IAS 8 §34IAS 8 §34AIAS 8 §35

Origin of the revision
JudgmentRequired
Change in an input / Change in a measurement technique / New information or more experience
Professional judgement: the choice of inputs (lives, rates, statistics) is a management matter based on the facts of the case; IAS 8 imposes no value.
Rationale: facts relied on, analysis, alternative rejected
TextRequired
Classification
JudgmentRequired
Change in accounting estimate / Change in accounting policy / Prior period error
Rationale: facts relied on, analysis, alternative rejected
TextRequired

Disclosure of the change in estimate

Disclosure

IAS 8 §39IAS 8 §40

Points reviewed
ChecklistRequired
- Nature of the change
- Amount of the effect on the period
- Expected effect on future periods
- Statement of impracticability if the future effect is not estimated

Conclusion

Change in estimate, entry and disclosure
ConclusionRequired

Effect on the financial statements

FS impact

Effect of the entries, line by line (derived from the entries)
TableRequired

Normative references

References

Normative references
References