As its name suggests, it covers three main areas:
- With regard to accounting policies, IAS 8 defines accounting policies’, explains how to select them and develop them (if necessary), and shows us how to account for a change in an accounting policy (normally retrospectively) and how to disclose the change. How to disclose accounting policies in general is not covered in IAS 8, since this is explained in IAS 1 Presentation of financial statements.
- With regard to accounting estimates, IAS 8 defines ‘changes in accounting estimates’ and shows us how to account for a change accounting estimate (normally prospectively) and how to disclose one.
- With regard to errors, IAS 8 defines ‘prior period errors’ and, although all errors should be corrected, IAS 8 explains how to account for the correction of a ‘material prior period error’ (normally retrospectively) and outlines the disclosure of a material prior period error.