Background

BC42 The IFRS Interpretations Committee informed the Board of difficulties entities faced in distinguishing changes in accounting policies from changes in accounting estimates. The Board understood that such difficulties arose because the previous definition of a change in accounting estimate in IAS 8 was not sufficiently clear.

BC43 In February 2021, the Board issued Definition of Accounting Estimates, which amended IAS 8. The amendments introduced the definition of accounting estimates in paragraph 5 and included other amendments to IAS 8 to help entities distinguish changes in accounting estimates from changes in accounting policies.

Definition of accounting estimates

BC44 Before the 2021 amendments, IAS 8 included definitions of ‘accounting policies’ and ‘change in accounting estimate’. The combination of a definition of one item (accounting policies) with a definition of changes in another item (change in accounting estimate) obscured the distinction between acc

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