Accounting policies:

  1. Measurement basis of the figure, eg, value the inventory using FIFO but now use weighted average method; use replacement cost rather than historic cost.
  2. Recognition basis of the figure, eg, recognize as an expense before but now for asset(eg,IAS 23 borrowing costs)
  3. Presentation basis of the figure, eg, recognize the depreciation expense into cost of sales now rather than in administrative expenses before.


Accounting estimate:

Something relating to your experience

  1. Allowance for receivables;
  2. Useful life/ depreciation method of the non-current assets;
  3. Warranty provision relating to return of goods from customers.



Retrospective adjusting Prospective adjusting
change in accounting policies Change in accounting estimate
Error found in last year’s account