Submitted by: Submitted by exbobo
Views: 10
Words: 3624
Pages: 15
Category: Business and Industry
Date Submitted: 09/03/2015 01:25 AM
UNIVERSITI TUNKU ABDUL RAHMAN
FACULTY OF ACCOUNTANCY AND MANAGEMENT
MAY 2015 TRIMESTER
ACADEMIC YEAR 2015
BACHELOR OF ACCOUNTING (HONS)
TUTORIAL7 ANSWERS
MFRS 108 ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS
_____________________________________________________________________________
Lazar and Huang (2014).
1. Accounting policies are the specific principles, base, conventions, rules and practise applied by an entity in preparing and presenting financial statements. Examples of accounting policies:
* Valuation of inventory using FIFO, Average Cost or other suitable basis as per IAS 2 (MFRS102)
* Classification, presentation and measurement of financial assets and liabilities under categories specified under MFRS 9 such as measured at amortised cost and at fair value through P&L.
* Timing of recognition of assets, liabilities, expenses and income
* Basis of measurement of non-current assets such as cost model and revaluation model
* Accrual basis of preparation of financial statements
* Depreciation policy
2. In determining an accounting policy in preparing and presenting the financial statements, an entity has no choice but to comply with the following sources or requirements in descending order:
a. An entity should apply the applicable accounting standard or its interpretation; and
b. In case of no such applicable accounting standard or interpretation, an entity should develop and apply an accounting policy that results in information that is more relevant and reliable.
3. In maintain the consistency of an accounting policy, the user of financial statements should be able to compare the financial statements of an entity over time, and therefore the same accounting policies are applied within each period and from one period to the next. In case the entity proposes or is required to change its accounting policy, it must observe the restriction and requirements in MFRS 108.
4. In order to...