The central government shall change an accounting policy only if the change: (a) is required by an accounting standard;
or
(b) results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity’s assets and financial position as provided in paragraph 2.3.
It must be possible for the users of financial statements to compare the central government financial statements over time in order to identify trends in its financial position. Consequently, the same accounting policies shall be applied within each period, and between periods, except when a change in an accounting policy satisfies one of the foregoing criteria.
The following do not constitute a change of accounting policy:
(a) the application of an accounting policy to transactions, other events or conditions that differ substantially from those that occurred previously;
and
(b) the application of a new accounting policy to transactions, other events or conditions that did not previously occur or that were not previously material.
2.4.1 Application of change in accounting policy
Subjet to the paragraphe concerning the limits to retrospective application:
(a) the central government shall record a change of accounting policy resulting from the first-time application of a standard in compliance with specific transitional provisions, if any, formulated in the said standard;
and
(b) if the central government changes accounting policies when first applying a standard that contains no specific transitional provisions applicable to this change, or within the limits permitted by paragraph 2.3, it shall apply this change retrospectively.
2.4.2 Retrospective application
Subject to the foregoing, when an accounting policy change is applied retrospectively in accordance with paragraph 2 4 1 (a) or (b), the central government shall adjust the opening balance on each affected item
STANDARD 14– ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS – REQUIREMENTS 180/202
of the statement of financial position for the first prior period presented, together with the other comparative amounts supplied for each prior period presented as if the new accounting policy had always been applied.
2.4.3 Limits to retrospective application
If paragraph 2 4 1 (a) or (b) requires retrospective application, an accounting policy change shall be applied retrospectively, except if it is impracticable to determine the effects of the change specifically associated with the period, or cumulatively.
If it is impracticable to determine the effects specifically associated with the period of a change of accounting policy on comparative information relating to one or more prior periods presented, the central government shall apply the new accounting policy to the asset and liability items at the start of the first period for which retrospective application is practicable, which may be the current period; it shall also apply a corresponding adjustment to the opening balance for each affected component of the statements of financial position for this period.
If it is impracticable to determine at the start of the current period the cumulative effect of application to all prior periods of a new accounting policy, the central government shall adjust the comparative information such as to apply the new accounting policy from the first practicable date prospectively. If the central government applies a new accounting policy retrospectively, it shall apply it to the comparative information provided for the prior periods, going back to the extent practicable. Retrospective application to a prior period is impracticable if it is not possible to determine its cumulative effect on the amounts in the opening and closing statements of financial position for the said period. The resulting adjustment applicable to the periods prior to those presented in the financial statements is recognised in the opening balance for each affected component in the statement of financial position for the first period presented. The resulting adjustment is recognised in the net financial position item (revaluation reserve, surplus or deficit carried forward, etc.) according to its nature.
If it is impracticable to apply a new accounting policy retrospectively due to the impossibility of determining the cumulative effect of the policy’s application to all prior periods, the central government shall, pursuant to the 3rd paragraph of this section, apply the new policy prospectively from the oldest date practicable. It therefore does not recognise the quota share of the cumulative adjustment of assets, liabilities and of the financial position resulting from transactions prior to that date. A change of accounting policy is permitted even if it is impracticable to apply the policy prospectively to any prior period presented. Paragraph 5 supplies commentaries on cases in which it is impracticable to apply a new accounting policy to one or more prior periods.
2.4.4 Required disclosures
Upon first-time application of a standard to an impact on the current period or to any prior period, or that ought to have such an impact except if it is impracticable to determine the amount of the adjustment, or again if the policy change may have an impact on future periods, the central government shall disclose: (a) the title of the standard
(b) where applicable, the fact that the change of accounting policy has been implemented in a manner consistent with its transitional provisions;
(c) the nature of the change in accounting policy;
(d) where applicable, a description of the transitional provisions;
STANDARD 14– ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS – REQUIREMENTS 181/202
(f) for the current period and each prior period presented, to the extent practicable, the amount of the adjustment to each financial statement line item affected;
(g) the amount of the adjustment relating to periods before those presented, to the extent practicable; and
(h) if the retrospective application required in paragraph 2 4 1(a) or (b) is impracticable for a specific prior period or for periods prior to the periods presented, the circumstances that led to this situation, and a description of how the change in accounting policy was applied, and from what date.
Financial statements of subsequent periods need not repeat these disclosures.
If a voluntary change of accounting policy, as authorised within the framework laid down in paragraph 2.3, has an impact on the current period or on a prior period, or is expected to have an impact on this period, except if it is impracticable to determine the amount of the adjustment, or again could have an impact on later periods, the central government shall supply the following information:
(a) the nature of the change in accounting policy;
(b) the reasons why applying the new accounting policy provides reliable and more relevant information; (c) for the current period and each prior period presented, to the extent practicable, the amount of the adjustment to each financial statement line item affected;
(d) the amount of the adjustment relating to periods before those presented, to the extent practicable; and
(e) if retrospective application for a specific prior period or for periods prior those presented is impracticable, an explanation and description of how and since when the accounting policy change was applied.
Financial statements of subsequent periods need not repeat these disclosures. 3. CHANGES IN ACCOUNTING ESTIMATES