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The IFRS Foundation has today published a guide to help companies determine their accounting policies when preparing IFRS financial statements.

IAS 8 Accounting Policies, Changing in Accounting Estimates and Errors specifies the requirements for selecting and applying accounting policies.

In the absence of an IFRS Standard that specifically applies to a transaction, other event or condition, management uses its judgement in developing and applying an accounting policy that results in information that is reliable and relevant to an investor’s economic decision-making needs.

Guide to Selecting and Applying Accounting Policies—IAS 8 presents a three-step process to developing accounting policies. An illustrative example accompanies each step to help explain when a company might apply that step.

This figure illustrates the three-step process:

Selecting and applying an accounting policy

ias 8 guide

Download the guide as a pdf.