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June 2024

Ind AS 2023 Amendments

By Dolphy D’souza, Chartered Accountant
Reading Time 7 mins

Ind AS 8 — ACCOUNTING POLICIES, CHANGES TO ACCOUNTING ESTIMATES AND ERRORS

The amendments to Ind AS 8 Accounting Policies, Changes to Accounting Estimates and Errors, introduce a new definition of accounting estimates. The amendments are designed to clarify the distinction between changes in accounting estimates changes in accounting policies and the correction of errors.

DEFINITION OF AN ACCOUNTING ESTIMATE

The current version of Ind AS 8 does not provide a definition of accounting estimates. Accounting policies, however, are defined. Furthermore, the standard defines the concept of a “change in accounting estimates”. A mixture of a definition of one item with a definition of changes in another has resulted in difficulty in drawing the distinction between accounting policies and accounting estimates in many instances. In the amended standard, accounting estimates are now defined as, “monetary amounts in financial statements that are subject to measurement uncertainty”.

To clarify the interaction between an accounting policy and an accounting estimate, paragraph 32 of Ind AS 8 has been amended to state that: “An accounting policy may require items in financial statements to be measured in a way that involves measurement uncertainty - that is, th

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