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Changing Accounting Policies in Accordance with AASB 10

In a perfect world, investors, board members, and executives would have full confidence in companies’ financial statements. They could rely on the numbers to make intelligent estimates of the magnitude, timing, and uncertainty of future cash flows and to judge whether the resulting estimate of value was fairly represented in the current stock price. And they could make wise decisions about whether to invest in or acquire a company, thus promoting the efficient allocation of capital. Unfortunately, that’s not what happens in the real world, for several reasons. First, corporate financial statements necessarily depend on estimates and judgment calls that can be widely off the mark, even when made in good faith.....

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Added on  2022-12-05

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This presentation discusses the importance of consistent and comparable accounting policies, criteria for selecting accounting policies, accounting policies and estimation for measuring the PPE, evaluation of professional judgments, and references.

Changing Accounting Policies in Accordance with AASB 10

In a perfect world, investors, board members, and executives would have full confidence in companies’ financial statements. They could rely on the numbers to make intelligent estimates of the magnitude, timing, and uncertainty of future cash flows and to judge whether the resulting estimate of value was fairly represented in the current stock price. And they could make wise decisions about whether to invest in or acquire a company, thus promoting the efficient allocation of capital. Unfortunately, that’s not what happens in the real world, for several reasons. First, corporate financial statements necessarily depend on estimates and judgment calls that can be widely off the mark, even when made in good faith.....

   Added on 2022-12-05

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Financial Accounting
and Reporting
Changing Accounting Policies in Accordance with AASB 10_1
Changing Accounting Policies in
Accordance with AASB 10
The accounting policies followed must be well consistent and
comparable so that the same allows the investors and other
stakeholders of the company, in well comparison of the financial
statements of the company (Lugovskу and Kuter 2019).
In the case of application of an accounting standard, when specially
applied to a transaction or condition, the impact of applicable
accounting policy can be well judged with the help of the changes
observed in the values of that specific asset.
Changing Accounting Policies in Accordance with AASB 10_2
Criteria for Selecting Accounting
Policies
The Accounting policy should be relevant and material enough for the purpose
of economic decision making that is applied by the stakeholders of the
company (Healy 2019).
Reliability would be a key factor when considered showing or reflecting the
faithful representation of the financial position, financial performance and other
financial aspect of the company (Aasb.gov.au 2019).
The economic substance of the transaction should be well reflected in the
given set of events and conditions.
The accounting policies stated should be neutral and must not be prepared on
a biased basis.
Prudence and completeness should be the key qualitative feature should would
be highlighted with the help of the accounting policies selected or given.
Changing Accounting Policies in Accordance with AASB 10_3

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