In almost every accounting framework there is in the world there are areas where company\u2019s management has the right to choose between methods and approaches. Whether they\u2019re important to the company or not, the options are there.\u00a0<\/p>\n
For an example if there are two choices on how one can treat investment property \u2013 at cost or at fair value \u2013 one ought to disclose the method they\u2019ve chosen.\u00a0 Disclosing the choice made means that it includes all relevant aspects that are driven from it. In case you\u2019ve chosen the fair value you should also explain to the readers how exactly this fair value is measured, which sources are used and so on.<\/p>\n
As it happens, there\u2019s always the factor of significance meaning that only those judgements made that have a significant impact on the statements should be disclosed. For an example if the investment property is insignificant the users of the report would hardly be interested in the approach used for its treatment.<\/p>\n
I know it may seem like it\u2019s nothing and it\u2019s already part of the rule that says you should disclose all relevant accounting policies applied. Whilst it\u2019s true I still believe it\u2019s worth mentioning as for some areas it may not seem so apparent you\u2019ve actually made a choice. And since it\u2019s not just the choice but also all relevant treatments and \u201csub-choices\u201d if you may, it does become relevant.<\/p>\n","protected":false},"excerpt":{"rendered":"
In almost every accounting framework there is in the world there are areas where company\u2019s management has the right to choose between methods and approaches. Whether they\u2019re important to the company or not, the options are there.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,46],"tags":[],"class_list":["post-3879","post","type-post","status-publish","format-standard","hentry","category-4-reporting","category-4-1-annual-report"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3879","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=3879"}],"version-history":[{"count":1,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3879\/revisions"}],"predecessor-version":[{"id":3880,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3879\/revisions\/3880"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=3879"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=3879"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=3879"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}