Accounting policies are

• Specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements.
• Essential for a proper understanding of the information contains in the financial statements.
• An entity is required to outline all significant accounting policies applied in preparing financial statements.
• The entity shall select and apply the same accounting policies in order to achieve comparability of financial statements.

It is an adjustment of the carrying amount of an asset or a liability that results from new information or new developments and are not corrections of errors.

• Accounting policies

• Change in accounting policies

• Accounting estimates

• Change in accounting estimate

Changes in accounting estimates result from new information or new developments and are therefore, corrections of errors.

• True
• False

It is essential for the proper understanding of the information included in the financial statements.

• Accounting policies
• Accounting estimates

An entity is required to outline all significant accounting policies applied in preparing financial statements.

• True
• False

The entity may select and choose not to apply the same accounting policies in order to achieve comparability of financial statements.

• True
• False

IFRS, IAS, IFRIC and SIC interpretations are standards and Interpretations issued by the

• International Accounting Standards Board
• Accounting Standards Council

Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.

• True
• False

These are omissions from, and misstatements in, the entity’s financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information.

• Past errors
• Prior errors
• Prior period errors

Prior period errors include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud.

• True
• False