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Statement of Changes in Equity, Accounting Policies, Changes in Accounting Estimates and Errors
Statement of Changes in Equity – IAS 1
1. Statement of changes in equity shows the movement in the elements of equity during the reporting period.
2. An entity shall present a statement of changes in equity showing on the face of the statement:
a. Profit or loss for the period;
b. Each item of income and expense for the period that, as required by other standards or interpretations, is recognized directly in equity, and the total of these items

c. Total income and expense for the period (calculated as sum of a and b), showing separately

d. The total amounts attributable to equity holders of the parent and to minority interest; and
e. For each component of equity, the effects of changes in accounting policies and corrections of errors recognized in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”
3. An entity shall also present, either on the face of the statement of changes in equity or in the notes: a. The amount of transactions with equity holders acting in their capacity as equity holders, showing separately distributions to equity holders;
b. The balance retained earnings (i.e. accumulated profit or loss) at the beginning of the period and at the balance sheet date, and the changes during the period; and
c. Reconciliation between the carrying amount of each class of contributed equity and each reserve at the beginning and the end of the period, separately disclosing each change.
IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors
The material on accounting policies has been transferred in to IAS 8 from IAS 1.
Where there is no applicable IFRS / IAS management should use its Judgment in developing and applying an accounting policy that results in information that is relevant and reliable.

Management should refer to:
a) The requirements and guidance in IFRS dealing with similar and related issues.
b) The definitions, recognition criteria and measurement concepts for assets, liabilities and expenses in the framework.
4. Management may also consider the most recent pronouncements of other standard setting bodies that use a similar conceptual framework to develop standards, other accounting literature and accepted industry practices if these do not conflict with the sources above.
• This standard is applied in selecting and applying accounting policies, and accounting for changes in accounting estimates and corrections of prior period errors.
5. The same accounting policies are usually adopted from period to period, to allow users to analyze trends over time in profit, cash flows and financial position. Changes in accounting policy will therefore be rare and should be made only if required by one of three things.
a) By statue
b) By an accounting standard setting body
c) If the change will result in a more appropriate presentation of events or transactions in the financial statements of the entity.
6. The standard highlights two types of event which do not constitute changes in accounting policy.

a) Adopting an accounting policy for a new type of transaction or event not deal with previously by the entity.
b) Adopting a new accounting policy for a transaction or event which has not occurred in the past or which was not material.
7. In the case of tangible non-current assets, if a policy of revaluation is adopted for the first time then this is treated, not as a change of accounting policy under IAS 8, but as a revaluation under IAS 16 Property, plant and equipment. The following paragraphs do not therefore apply to changes in policy to adopt revaluations.
Selection and Application of Accounting Policies – IAS 8

• When a Standard or an Interpretation specifically applies to a transaction, other event or condition, the accounting policy or policies applied to that item shall be determined by applying the Standard or Interpretation and considering any relevant Implication Guidance issued by IASB for the standard or interpretation.
• In the absence of a Standard or an Interpretation that specifically applies to a transaction, other event or condition, management shall use its judgment in developing and applying an accounting policy that results in information that is:

a. Relevant to the economic decision making needs of the user; and
b. Reliable, in that the financial statements;

• Represents faithfully the financial position, financial performance and cash flow of the entity;
• Reflects the economic substance of transactions, other events and conditions, and not merely the legal form;
• Are neutral, i.e. free from bias;
• Are prudent; and
• Are complete in all material respects.

Consistency of Accounting Policies – IAS 8

• An entity shall select and apply its accounting policies consistently for similar transactions,
• Other events and conditions, unless a Standard or an Interpretation specifically requires or permits categorization of items for which different policies may be appropriate. • If a standard or an interpretation requires or permits such categorization, an appropriate accounting policy shall be selected and applied consistently to each category.

Changes in Accounting Policies – IAS 8
• An entity shall change an accounting policy only if the change:
a. Is required by a standard or an interpretation; or
b. Results in financial statements providing reliable and more relevant information about the effects of transactions, other events or contributions on the entity’s financial position, financial performance or cash
flows.
• The following are not changes in accounting policies:
a. The application of an accounting policy for transactions, other events or conditions that differ in substance from those previously occurring; and
b. The application of a new accounting policy for transactions, other events or conditions that did not occur previously or were immaterial. • The initial application of a policy to revalue assets in accordance with IAS 16 “Property Plant and Equipment” or IAS 38 “Intangible Assets” is a change in accounting policy to be dealt with as revaluation in accordance with IAS 16 or IAS 38, rather than in accordance with this Standard Certain disclosures are required when a change in accounting policy has a material effect on the current period or any prior period presented, or when it may have a material effect in subsequent periods.

a) Reason for the change

b) Amount of the adjustment for the current period and for each period presented.
c) Amount of the adjustment relating to periods prior to those included in the comparative information.
d) The fact that comparative information has been restated or that it is impracticable to do so.
The entity should also disclose information relevant to assessing the impact of new IFRS on the financial statements where these have not yet come in to force.