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ACCA Strategic Professional · Strategic Business Reporting (International) · Discussion of issues in financial reporting

A finance director argues that the entity should not disclose a Standard already issued but not yet effective, because adoption is a year away. Which response is correct under IAS 8?

IAS 8 requires an entity to disclose that a Standard has been issued but is not yet effective, together with known or reasonably estimable information about its likely impact. Waiting until the first period of application or disclosing only adverse effects is not permitted.

  1. ADisclosure is required of the fact and known or reasonably estimable information on the possible impact of the new Standard on the financial statementsCorrect
  2. BDisclosure is only required once the Standard is endorsed by the entity's auditor
  3. CNo disclosure is needed until the first period of application
  4. DDisclosure is required only if the impact is a decrease in profit

Explanation

IAS 8 requires disclosure that a new Standard has been issued but is not yet effective, with known or reasonably estimable information on its impact. This applies to issued Standards, not mere Exposure Drafts, and is independent of whether profit rises or falls. Waiting until first application is therefore wrong.

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