ACCOUNTING

POLICIES, ESTIMATES
AND ERRORS
 SPECIFIC PRINCIPLES, BASES,
CONVENTIONS, RULES AND
ACCOUNTING
PRACTICES APPLIED BY AN ENTITY IN
POLICIES PREPARING AND PRESENTING
FINANCIAL STATEMENTS
 Is required by a standard or
interpretation; or

CHANGES IN Results in the financial statements

ACCOUNTING providing reliable and more relevant
POLICY information about the effects of
transactions, other events or conditions
on the entity's financial position, financial
performance, or cash flows.
 By applying the transitional
provision if the change is either
required by a standard or
TREATMENT interpretation
OF CHANGES
IN Retrospective Application
ACCOUNTING
POLICY
If impracticable, current period
only
  CHANGE FROM COST MODEL TO FAIR VALUE METHOD ON
ACCOUNTING INVESTMENT PROPERTY

 CHANGE OF INVENTORY VALUATION FROM FIFO TO WEIGHTED

EXAMPLES AVAERAGE

 CHANGE TO A NEW POLICY RESULTING FROM THE

REQUIREMENT OF NEW PFRS
  USE JUDGEMENT IN SELECTING AND
APPLYING AN ACCOUNTING POLICY THAT
RESULTS IN AN INFORMATION THAT IS
RELEVANT
ABSENCE OF
ACCOUNTING  CURRENT STANDARDS DEALING WITH
STANDARD SIMILAR MATTERS
 CONCEPTUAL FRAMEWORK DEFINITION,
RECOGNITION, CRITERIA AND
MEASUREMENT
 MOST RECENT PRONOUNCEMENTS
  ADJUSTMENT OF THE CARRYING AMOUNT OF AN
ASSET OR LIABILITY, OR RELATED EXPENSE,
RESULTING FROM REASSESSING THE EXPECTED
FUTURE BENEFITS AND OBLIGATIONS ASSOCIATED
CHANGE IN WITH THAT ASSET OR LIABILITY.
ACCOUNTIN
ESTIMATE  ACCOUNTING ESTIMATES RESULT FROM
UNCERTAINTIES INHERENT IN BUSINESS ACTIVITIES
THAT MANY ITEMS CANNOT BE MEASURED WITH
ACCURACY BUT CAN ONLY BE ESTIMATED.
  THE EFFECT OF A CHANGE IN AN
ACCOUNTING ESTIMATE SHALL BE
RECOGNIZED PROSPECTIVELY BY
INCLUDING IT IN PROFIT OR LOSS IN:
TREATMENT
OF CHANGES
 THE PERIOD OF THE CHANGE, IF THE
IN CHANGE AFFECTS THAT PERIOD ONLY;
ACCOUNTING OR
POLICY  THE PERIOD OF THE CHANGE AND
FUTURE PERIODS, IF THE CHANGE
AFFECTS BOTH.
 DOUBTFUL ACCOUNTS
INVENTORY OBSOLESCENCE
USE LIFE, RESIDUAL VALUE AND
EXAMPLES EXPECTED PATTERN OF
CONSUMPTION
WARRANTY COST
FAIR VALUES OF ASSET AND LIABILITY
  OMISSIONS FROM, AND MISSTATEMENTS IN, AN
ENTITY'S FINANCIAL STATEMENTS FOR ONE OR
MORE PRIOR PERIODS ARISING FROM A FAILURE TO
USE, OR MISUSE OF, RELIABLE INFORMATION THAT
PRIOR WAS AVAILABLE AND COULD REASONABLY BE
PERIOD EXPECTED TO HAVE BEEN OBTAINED AND TAKEN
INTO ACCOUNT IN PREPARING THOSE
ERRORS  STATEMENTS. SUCH ERRORS RESULT FROM
MATHEMATICAL MISTAKES, MISTAKES IN APPLYING
ACCOUNTING POLICIES, OVERSIGHTS OR
MISINTERPRETATIONS OF FACTS, AND FRAUD.
  RETROSPECTIVELY BY ADJUSTING THE OPENING
BALANCES OF RETAINED EARNINGS AND AFFECTED
ASSETS AND LIABILITIES
TREATMENT
 IF COMPARATIVE, PRIOR PERIOD SHALL BE
RESTATED
INCOME TAXES
PAS 11
  ACCOUNTING INCOME OR FINANCIAL INCOME
ACCOUNTING  NET INCOME FOR THE PERIOD BEFORE DEDUCTING INCOME
TAXES
INCOME
VS  TAXABLE INCOME
 NET INCOME FOR THE PERIOD DETERMINED IN ACCORDANCE
TAXABLE WITH THE RULES ESTABLISHED BY TAXATION AUTHORITIES
INCOME  INCOME APPEARING IN TAX RETURN
  PERMANENT DIFFERENCES
 REVENUES OR EXPENSES WHICH ARE INLCUDED IN EITHER
ACCOUNTING INCOME OR TAXABLE INCOME BUT NEVER BE
INCLUDED IN BOTH
 DO NOT GIVE RISE TO A DEFERRED TAX ASSET OR DEFERRED
DIFFERENCES TAX LIABILITY
EXAMPLE:
A. INTEREST INCOME ON DEPOSITS
B. DIVIDENDS RECEIVED
C. LIFE INSURANCE PREMIUM
  TEMPORARY DIFFERENCES
 REVENUES OR DIFFERENCES WHICH ARE INCLUDED BOTH IN
FINANCIAL ACCOUNTING AND TAXABLE INCOME BUT IN
DIFFERENT TIME PERIODS
 GIVES RISE TO DEFERRED TAX ASSET OF DEFERERD TAX
LIABILITY

DIFFERENCES  DEFERRED TAX LIABILITY

 ACCOUNTING INCOME IS HIGHER THAN THE TAXABLE INCOME

 DEFERRED TAX ASSET

 TAXABLE INCOME IS HIGHER THAN ACCOUNTING INCOME
 IT INCLUDES OPERATING LOSS CARRYFORWARD
 CURRENT TAX LIABILITY IS THE
CURRENT TAX EXPENSE OR THE
CURRENT TAX AMOUNT OF INCOME TAX ACTUALLY
LIABILITY PAYABLE
AND
CURRENT TAX IF THE AMOUNT ACTUALLY PAYABLE
ASSET EXCEEDS CURRENT TAX LIABILITY,
EXCESS IS RECOGNIZED A CURRENT
TAX ASSET
 Interim Period – Is a financial reporting
period shorter than a full financial year.

INTERIM Interim financial report – A financial

REPORTING report containing either a complete set
of financial statements or a set of
condensed financial statements for an
interim period.
  Condensed statement of financial position

Minimum  Condensed income statement

Components
of an Interim  Condensed statement showing either (i) all changes in equity or
(ii) changes in equity other than those arising from capital
Financial transactions with owners and distributions to owners
Report
 Condensed statement of cash flows

 Selected explanatory notes

  Headings and subtotals included in most recent annual financial
statements

 Selected minimum explanatory notes - explaining events and
Required transactions significant to an understanding of the changes in
information in financial position/performance since last annual reporting date

Condensed
 Selected line items or notes if their omission would make the
Statements condensed financial statements misleading

 Basic and diluted earnings per share (if applicable) on the face of
statement of comprehensive income.
  Revenues from products sold or services rendered are generally
recognized for interim reports on the same basis as for the annual
period.

General  Expenses associated directly with revenue are matched against

revenue in those interim periods in which the related revenue is
Guidelines of recognized.

Interim
 Expenses not associated with revenue are recognized in the interim
Financial periods as incurred or allocated over the interim periods benefited.

Reporting
 Inventories are measured for interim financial reporting by the same
principles as at financial year-end (LCNRV). However full inventory
taking may not be required at interim dates although it must be done
at financial year-end. It may be sufficient to make estimates at
interim dates based on sales margin.
  Inventory losses from permanent market declines are recognized
in the interim period in which the decline occurs. Recoveries of
such losses on the same inventory in later interim period should be
recognized as gains in later interim periods.

General  Temporary market declines on inventories and recoveries at a later
Guidelines of interim period are now recognized for interim purposes.

Interim  Interim period income tax expense should reflect the same
Financial general principles of income tax accounting applicable to annual
reporting.
Reporting 
 Gains or losses from, disposal of property, gains or losses from
sale of discontinued operations and other gains and losses should
not be allocated over the interim periods.

  Principles for recognizing assets, liabilities, income and expenses
are same as in the most recent annual financial statements, unless
there is a change in an accounting policy that is to be reflected in
the next annual financial statements.
Accounting 
 Tax recognised based on weighted average annual income tax rate
Policies expected for the full year

 Tax rate changes during the year are adjusted in the subsequent
interim period during the year.
 
 USE OF ESTIMATES - Interim reports require a greater use of
estimates than annual reports.

 COSTS INCURRED UNEVENLY - Anticipated or deferred only if it
would be possible to defer or anticipate at yearend.

OTHER 
 SEASONAL, CYCLICAL OR OCCASIONAL REVENUE
GUIDELINES

 Revenue received during the year should not be anticipated or
deferred where anticipation would not be appropriate at year end

 Recognized as it occurs.
  Statement of financial position as at the end of the current interim
period (e.g. 30 Sept. 2019) and as of the end of the immediate
preceding financial year (e.g. 31 December 2018)

 Statements of comprehensive income for the current interim period
(e.g. July – Sept. 2019) and cumulatively for the current financial year
(Jan. – Sept. 2019) (which will be the same for half year ends), with
comparatives for the interim period of the preceding financial year
(Jan. – Sept. 2018)
Periods to be 
presented  Statements of changes in equity for the current financial year to date,
with comparatives for the year to date of the immediately preceding
financial year

 Statements of cash flows for the current financial year to date, with
comparatives for the year to date of the immediately preceding
financial year.