Accounting policies are an in-company document that reflects its business processes, industry, and transactions characteristics.
Enterprises must set up the criteria of accounting policies selection and changes, accounting approach to disclosure of information about changes in accounting policies, and accounting estimates and errors corrections.
ACCOUNTING POLICIES AND CHANGES IN ESTIMATES
Accounting policies are the principles, grounds, arrangements, rules, and practices that companies apply to drawing up and submission of financial reporting.
Due to the accounting policies financial reporting containing appropriate and authentic information about the transactions and other applicable events and conditions are possible to draw.
Changes in accounting estimates resulting from the new information or new developments are not the correction of the errors.
WHY IT IS IMPORTANT
Accounting policies must be presented as a part of the comprehensive financial reporting under the IFRS. They identify the accounting rules and principles applied to financial reporting.
Accounting policies secure the authenticity of financial information by blending the accounting standards requirements and characteristics of each company and its business. Accounting policies directly affect the approaches to detailed income and expenses accounting.