Transitional provisions, voluntary change, early application

Learning objectives

• Determine how a change is to be applied: the transitional provisions of the standard or, failing those and for a voluntary change, retrospective application.L1, L2
• Analyse whether early application of a standard is a voluntary change.L2, L3

Normative references

• IAS 8 §19A change in accounting policy resulting from the initial application of an IFRS is accounted for in accordance with the specific transitional provisions of that IFRS; when there are no specific transitional provisions, or for a voluntary change, the change is applied retrospectively.
• IAS 8 §20Early application of an IFRS is not a voluntary change in accounting policy.
• IAS 8In the absence of an IFRS that specifically applies to a transaction, an entity may apply a policy drawn from the most recent pronouncements of another standard-setting body (para. 12); if, following an amendment of that pronouncement, it chooses to change its policy, the change is accounted for and disclosed as a voluntary change in accounting policy.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

14 questions

• A change in policy resulting from the initial application of an IFRS is accounted for under the specific transitional provisions of that IFRS, if any.L1
• A voluntary change in accounting policy is applied prospectively, from the date of the change.L1
• Early application of an IFRS, before its mandatory effective date, is a voluntary change in accounting policy.L2
• A new IFRS applied for the first time by Neumine has no specific transitional provisions. How is the change applied?L1
• Gulbore voluntarily moves from one accounting policy to another, more relevant one. How does it apply the change?L1
• A new IFRS allows, in its transitional provisions, the cumulative effect to be recognised at the date of initial application without restating comparatives. Fargenne's finance director nevertheless wants to apply the general retrospective treatment of IAS 8. What should be done?L2
• Taudède early-applies an amendment to a standard that has been issued but is not yet mandatory. How should this application be described?L2
• Which of the following changes are applied under the retrospective treatment of IAS 8?L2
• Which statements about the initial application of an IFRS and its early application are correct?L3
• The Zilvane group applies for the first time an IFRS whose transitional provisions require an adjustment to equity at the date of initial application, without restating comparatives. The team has prepared a full restatement of the two years presented. What is the conclusion?L2
• Gernax early-applies a new IFRS. Its finance director is preparing a note justifying this choice as a voluntary change 'providing more relevant information'. How should this approach be analysed?L2
• Fylvac decides to move from FIFO to weighted average cost, which it considers more representative of its flows. No new IFRS is involved. What must Fylvac do?L1
• A new IFRS, with no specific transitional provisions, applies for the first time to the 2025 accounts of Vélbian, which presents 2025 and 2024. Which treatment should be used?L2
• In the same year, Pailbix (1) early-applies an IFRS that has transitional provisions and (2) voluntarily changes its inventory cost formula. Which combination of treatments is correct?L3