Disclosures on changes in policies

Learning objectives

• Identify the disclosures required on initial application of an IFRS and on a voluntary change.L2, L3
• Explain the information required about an IFRS that has been issued but is not yet effective.L2

Normative references

• IAS 8When initial application of an IFRS has an effect on the current period or any prior period (or would have such an effect except that it is impracticable to determine the amount) or might have an effect on future periods, the entity discloses in particular: the title of the IFRS; when applicable, that the change is made in accordance with its transitional provisions and a description of them; the nature of the change; for the current period and each prior period presented, to the extent practicable, the amount of the adjustment for each financial statement line item affected and, if IAS 33 applies, for basic and diluted earnings per share; and information on prior periods and on impracticability.
• IAS 8 §29When a voluntary change in accounting policy has an effect on the current period or any prior period, the entity discloses in particular the nature of the change, the reasons why applying the new policy provides reliable and more relevant information and, to the extent practicable, the amount of the adjustment for each line item affected.
• IAS 8 §30When a new IFRS has been issued but is not yet effective and has not been applied, the entity discloses that fact and known or reasonably estimable information relevant to assessing the possible impact that its initial application will have.
• IAS 8 §31To comply with para. 30, the entity considers disclosing in particular: the title of the new IFRS; the nature of the expected change or changes in accounting policy; the date by which application is required; the date as at which it plans to apply it first; and either a discussion of the impact that first application is expected to have on its financial statements or, if that impact is not known or reasonably estimable, a statement to that effect.

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

10 questions

• When initial application of an IFRS has an effect on the current period or a prior period, the entity discloses, among other things, the title of that IFRS.L2
• For a voluntary change in policy, the entity explains why the new policy provides reliable and more relevant information.L2
• An entity has nothing to disclose about a new IFRS that has been issued but is not yet effective, as long as it does not apply it.L2
• Which of the following disclosures is specific to a voluntary change in accounting policy?L2
• Gridal, listed and subject to IAS 33, applies for the first time an IFRS that changes several line items. What amount must it disclose for the current period and each prior period presented, to the extent practicable?L3
• An issued IFRS will become effective in two years; Raitard does not yet apply it. What does it disclose in its notes?L2
• To meet the disclosure on an issued IFRS not yet applied, which items does the entity consider disclosing?L2
• On initial application of an IFRS affecting the period, which disclosures are among those required?L3
• Pomenne's note on its voluntary change in policy discloses the nature of the change, its reasons and the total effect on 2024 profit. What gap do you note?L3
• An IFRS issued during the year will significantly change the presentation of Lotine's income statement from 2027. The 2025 notes say nothing about it, 'since it is not yet applicable'. What is the error?L2