ESMA comment letter on the IASB’s Exposure Draft on proposed amendments to IAS 8 regarding accounting policies and accounting estimates

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19 Dec 2017

The European Securities and Markets Authority (ESMA) has issued its comment letter on the IASB’s Exposure Draft, ED/2017/5 Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8).

ESMA “generally agrees” with the clarifications on how accounting estimates and accounting policies relate to each other”. However it believes that improvements are still required.

ESMA indicates that the proposed definition of accounting policy could be enhanced further to explain how the term ‘practices’ shall be understood or by deleting it. It also comments that it is still “challenging” to distinguish between accounting policy and accounting estimate in certain circumstances. Additionally ESMA suggests that the IASB should explain the distinction between the change in estimate and the correction of an error in the basis for conclusions section accompanying the amended paragraph 34 of IAS 8.

The full comment letter is available on the ESMA website.

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