IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors permits a company to change an accounting policy for limited reasons. Which of the following reasons are permitted under the standard? 1) The IASB has issued a standard or interpretation that requires the company to make the change 2) The Finance Director believes a change would improve the amount of profit shown 3) There is a change in the useful economic life of an asset that requires a greater depreciation charge 4) The new policy would improve the reliability and relevance of the financial statements Which is the correct option? a) All of the above b) 1 and 4 only c) 3 and 4 only d) 1 only
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors permits a company to change an accounting policy for limited reasons. Which of the following reasons are permitted under the standard? 1) The IASB has issued a standard or interpretation that requires the company to make the change 2) The Finance Director believes a change would improve the amount of profit shown 3) There is a change in the useful economic life of an asset that requires a greater depreciation charge 4) The new policy would improve the reliability and relevance of the financial statements Which is the correct option? a) All of the above b) 1 and 4 only c) 3 and 4 only d) 1 only
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
permits a company to change an accounting policy for limited reasons. Which of the following reasons are permitted under the standard?
1) The IASB has issued a standard or interpretation that requires the
company to make the change
2) The Finance Director believes a change would improve the amount
of profit shown
3) There is a change in the useful economic life of an asset that
requires a greater
4) The new policy would improve the reliability and relevance of the
financial statements
Which is the correct option?
a) All of the above
b) 1 and 4 only
c) 3 and 4 only
d) 1 only
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