Category Archives: 2 Processes

Changing an accounting policy

According to International Financial Reporting Standards (“IFRS”) an accounting policy should only be change when the change is either required by a standard or interpretation or when it means that the financial statements give more relevant and reliable information about the effects of transactions, other events or conditions on the entity’s financial position, performance or cash flows. The reason I quote IFRS is because it’s the basis for most accounting standards in the world. Obviously one should consult their local legislation, but something as fundamental as changing an accounting policy is most probably treated the same way.  Continue reading