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TMI BlogChanges in Accounting PoliciesX X X X Extracts X X X X X X X X Extracts X X X X ..... ut the effects of transactions, other events or conditions on the entity s financial position, financial performance or cash flows. Users of financial statements need to be able to compare the financial statements of an entity over time to identify trends in its financial position, financial performance and cash flows. Therefore, the same accounting policies are applied within each perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, other events or conditions that differ in substance from those previously occurring; and the application of a new accounting policy for transactions or events which were immaterial or non-existent in previous periods ; like introduction of formal retirement gratuity scheme in the place of an ad hoc policy. The initial application of a policy to revalue assets in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application Retrospective application means the entity should adjust (restate) the current year and previous year financial statements as if the new policy is followed from the beginning. When a change in accounting policy is applied retrospectively, the entity shall adjust the opening balance of each affected component of equity for the earliest prior period presented and the other compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, and shall make a corresponding adjustment to the opening balance of each affected component of equity for that period. When it is impracticable to determine the cumulative effect, at the beginning of the current period, of applying a new accounting policy to all prior periods, the entity shall adjust the comparative information to apply the new accounting policy prospectively from the earl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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