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WorkpaperIAS 8 — Accounting Policies, Changes in Accounting Estimates and ErrorsL2 · L3 · L4

Accounting policy memo

3 missions8 sections to document40 min
Prepared by
AI-assisted draft
Reviewed by
Not reviewed — human review required
Status
Published

Objective of the workpaper

Describe the transaction, look for the IFRS that specifically applies to it and the effect of materiality; where no IFRS applies, document in order the sources consulted (IFRSs dealing with similar issues, Conceptual Framework, other consistent pronouncements), check consistency by category, then write the policy adopted and its rationale.

8 sections · 16 blocks · 0 calculations · 0 entries

  • IAS 8 §5
  • IAS 8 §7
  • IAS 8 §8
  • IAS 8 §10
  • IAS 8 §11
  • IAS 8 §12
  • IAS 8 §13

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.

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

File and entity
Transaction with no applicable standard: developing and documenting an accounting policy
Case tasks documented here
  • Does an IFRS specifically apply to the certificates? Which approach must be followed?
  • Assess approach (A) adopted by management against the hierarchy of sources and the required qualities.
  • What should be done with the practices of Halvenor Nord and Halvenor Sud on consolidation?
  • Post the 20X5 closing entries under the group's policy.
1

Inputs

Inputs

  • Description of the transaction and of its economic effects

    TextRequired

    FREE_TRANSFERABLE_CERTIFICATES_AND_SURRENDER_OBLIGATION

  • IFRSs and Conceptual Framework consulted

    TextRequired

    NO_SPECIFIC_IFRS_SIMILAR_IFRS_AND_FRAMEWORK_REVIEWED

  • Pronouncements and practices examined

    Text

    FOREIGN_STANDARD_SETTER_NET_APPROACH

  • Amount at stake

    Number

    42,000

  • Materiality threshold set by management

    Number

    25,000

    Case data: IAS 8 sets no numerical threshold; the threshold is a management input.

2

Supporting evidence

Evidence

  • Evidence obtained and referenced (category, document reference)

    EvidenceRequired

3

Applicable IFRS and materiality

Analysis

IAS 8 §5IAS 8 §7IAS 8 §8

  • Points reviewed

    ChecklistRequired

    • Search for an IFRS that specifically applies
    • Policy determined by that IFRS where it exists
    • Immaterial effect: IFRS policy need not be applied
    • No deliberate departure to achieve a particular presentation
4

Developing a policy where no IFRS applies

Analysis

IAS 8 §10IAS 8 §11IAS 8 §12

  • Points reviewed

    ChecklistRequired

    • Relevant and reliable information (faithful representation, neutrality, prudence, completeness)
    • Economic substance, not legal form only
    • First: IFRSs dealing with similar and related issues
    • Then: definitions, criteria and concepts of the Conceptual Framework
    • Possibly: other standard-setters, literature and industry practice
    • No conflict with the higher sources
5

Consistency by category

Analysis

IAS 8 §13

  • Points reviewed

    ChecklistRequired

    • Same policy for similar transactions
    • Categorisation required or permitted by an IFRS
    • Consistent application within each category
6

Policy and materiality

Judgment

IAS 8 §8IAS 8 §10IAS 8 §11IAS 8 §12

  • Basis of the policy

    JudgmentRequired

    Analogy with an IFRS dealing with similar issues

    IFRS that specifically applies / Analogy with an IFRS dealing with similar issues / Definitions and concepts of the Conceptual Framework / Consistent pronouncement of another standard-setter

    Management's professional judgement (para. 10): the policy chosen in the case is not presented as required by the standard.

  • Rationale: facts relied on, analysis, alternative rejected

    TextRequired

    NET_OBLIGATION_REFLECTS_SUBSTANCE_CONSISTENT_WITH_FRAMEWORK

  • Departure from IFRSs

    JudgmentRequired

    No departure

    No departure / Immaterial departure, not deliberate: acceptable / Material or deliberate departure: to be corrected

  • Rationale: facts relied on, analysis, alternative rejected

    TextRequired

    GROUP_POLICY_APPLIED_TO_ALL_SITES

7

Conclusion

Conclusion

  • Wording of the accounting policy

    TextRequired

    NET_LIABILITY_APPROACH_AT_MARKET_PRICE

  • Policy approved, scope and points submitted to the reviewer

    ConclusionRequired

8

Normative references

References

  • Normative references

    References

9

Checks and financial statement impact

  • Basis of the policy documentedPass
  • Possible departure assessedPass
Assets
0
Liabilities
0
Profit or loss
0
OCI
0
Equity
0