IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, retains the ‘impracticability’ criterion for exemption from changing comparative information when changes in accounting policies are applied retrospectively and prior period errors are corrected. The standard now includes a definition of ‘impracticable’ and guidance on its interpretation.
Based on this standard, applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so.
Paragraph 27 IAS 8 stated that when it is impracticable for an entity to apply a new accounting policy retrospectively, because it cannot determine the cumulative effect of applying the policy to all prior periods, the entity, in accordance with paragraph 25, applies the new policy prospectively from the start of the earliest period practicable.
It therefore disregards the portion of the cumulative adjustment to assets, liabilities and equity arising before the date.
Changing an accounting policy is permitted even if it is impracticable to apply the policy prospectively for any prior period.
Paragraphs 50-53 provide guidance on when it is impracticable to apply a new accounting policy to one or more prior periods.
Read the rest of this article in here : When it is impracticable to apply a new accounting policy, how to deal with it ?
Hardi
