02-10-2010, 03:52 AM
Dear
Gripping IFRS is sort of technical reference manual or explanatory material that obviously carries personalized understanding of writer/developer. Personal understandings do vary for so many reasons that can be valid or invalid.
In 2004 and 2005 When depreciation practice was changed from "full year depreciation on additions in first year and nothing on deletions in the year of disposal" and was charged "for actual period of use ie from date/month of addition to date/month of deletion", we saw huge differences of opinion about accounting treatment.
A large circle was of the view that it tentamounts to change in policy and not estimate so treatment should be made retrospectively. Even the people like Muhammad Maqbool expressed similar views in different CPD meetings.
However, on other hand so many professionals (including myself) were of the view that it's a change in estimate so it should be treated prospectively.
Eventually the matter was referred to technical advisory committee of ICAP that after considering all the pros and cons gave its opinion that such change was a change of estimate and it should have been treated as such prospectively.
You can find it in latest few volumes of selected opinions available at the website of ICAP.
In my view there can be made arguments on this topic but prospective application is a precise practice.
Regards,
Kamran.
Gripping IFRS is sort of technical reference manual or explanatory material that obviously carries personalized understanding of writer/developer. Personal understandings do vary for so many reasons that can be valid or invalid.
In 2004 and 2005 When depreciation practice was changed from "full year depreciation on additions in first year and nothing on deletions in the year of disposal" and was charged "for actual period of use ie from date/month of addition to date/month of deletion", we saw huge differences of opinion about accounting treatment.
A large circle was of the view that it tentamounts to change in policy and not estimate so treatment should be made retrospectively. Even the people like Muhammad Maqbool expressed similar views in different CPD meetings.
However, on other hand so many professionals (including myself) were of the view that it's a change in estimate so it should be treated prospectively.
Eventually the matter was referred to technical advisory committee of ICAP that after considering all the pros and cons gave its opinion that such change was a change of estimate and it should have been treated as such prospectively.
You can find it in latest few volumes of selected opinions available at the website of ICAP.
In my view there can be made arguments on this topic but prospective application is a precise practice.
Regards,
Kamran.
