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    Cfas Narrative Report 1

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    Maryden Burgos
    The document discusses accounting policies, estimates, and errors under Chapter 11. It summarizes the presentation given by the reporter on these three topics. For accounting policies, it explained that these are the standards set by the Philippine Financial Reporting Standards Council. It discussed when policies change and how these changes are treated retrospectively. For accounting estimates, it defined these as adjustments to assets and liabilities, and explained that changes are treated currently and prospectively rather than retrospectively. Finally, it discussed prior period errors, defining these as past misstatements, and explained that material errors are treated retrospectively through restatement, while immaterial errors are treated prospectively.

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    Cfas Narrative Report 1

    Uploaded by

    Maryden Burgos
    28 views2 pages
    The document discusses accounting policies, estimates, and errors under Chapter 11. It summarizes the presentation given by the reporter on these three topics. For accounting policies, it explained that these are the standards set by the Philippine Financial Reporting Standards Council. It discussed when policies change and how these changes are treated retrospectively. For accounting estimates, it defined these as adjustments to assets and liabilities, and explained that changes are treated currently and prospectively rather than retrospectively. Finally, it discussed prior period errors, defining these as past misstatements, and explained that material errors are treated retrospectively through restatement, while immaterial errors are treated prospectively.

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    CFAS-NARRATIVE-REPORT-1

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    The document discusses accounting policies, estimates, and errors under Chapter 11. It summarizes the presentation given by the reporter on these three topics. For accounting policies, it explained that these are the standards set by the Philippine Financial Reporting Standards Council. It discussed when policies change and how these changes are treated retrospectively. For accounting estimates, it defined these as adjustments to assets and liabilities, and explained that changes are treated currently and prospectively rather than retrospectively. Finally, it discussed prior period errors, defining these as past misstatements, and explained that material errors are treated retrospectively through restatement, while immaterial errors are treated prospectively.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    28 views2 pages

    Cfas Narrative Report 1

    Uploaded by

    Maryden Burgos
    The document discusses accounting policies, estimates, and errors under Chapter 11. It summarizes the presentation given by the reporter on these three topics. For accounting policies, it explained that these are the standards set by the Philippine Financial Reporting Standards Council. It discussed when policies change and how these changes are treated retrospectively. For accounting estimates, it defined these as adjustments to assets and liabilities, and explained that changes are treated currently and prospectively rather than retrospectively. Finally, it discussed prior period errors, defining these as past misstatements, and explained that material errors are treated retrospectively through restatement, while immaterial errors are treated prospectively.

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    Narrative Report: Chapter 11 - Accounting Policies, Estimates, & Errors

    The class was asked to conduct an individual report catering to Chapters Eleven (11)
    through Thirty-nine (39). Being the first reporter in line, the topic given to me was
    about Accounting Policies, Accounting Estimates, and Errors under Chapter Eleven
    (11). In preparation for my report, I watched video lessons on Youtube and utilized
    the internet to dig deeper research about my topic; I maximized my resources and
    time as much as I could. All the pieces of information I gathered were summarized
    briefly in a PowerPoint presentation, and further details were discussed in my
    reporting.

    The Accounting Policies and Accounting Estimates are categories of accounting


    changes; there’s actually another one which is the Changes in Reporting Entity but
    the discussion mainly focused on the first two and the Prior Period Errors. The flow of
    my discussion is the “What-When-How-Why” reporting style, as I believed that this is
    the most suitable way to effectively and efficiently relay the information to my fellow
    classmates. Before properly proceeding with the discussion, I tested first their
    knowledge about the topic; I asked them to give their idea or hunch about the three
    topics, and Ms. Vargas answered that she thinks they are adjustments that have to
    be made in the financial statements. With that, I moved forward to the discussion, I
    started first with the Accounting Policies: (What) I discussed its definition saying that
    these are the standards approved and issued by the Philippine Financial Reporting
    Standards Council which are called the Philippine Accounting Standards or PAS.
    (When) Since the Change in Accounting Policies is a big shift and doing so alters the
    whole preparation and presentation of financial statements which eventually
    comprises comparability and consistency, it rarely occurs and only occurs when
    required by the accounting standards and when the company, itself, believes that it
    will result in a more relevant and faithfully represented information in the financial
    statements. (How) Now, these changes are treated Retrospectively wherein entities
    go back to prior periods to adjust the opening balance of the retained earnings in
    accordance with the new accounting policy because this is as if we’ve been using the
    said accounting policy from the very beginning. (Why) Also because every entity is
    given a right to choose its own preferred accounting policies which they think are
    very suitable to its business operations and transactions hence, changing them
    without adjusting the prior periods will create discrepancies.

    Moving on to the second topic, Accounting Estimates. (What) These are the
    adjustments in the carrying amount of an asset or liabilities and periodic assumptions
    of future benefit or obligation through assessing the present status of our current
    assets and liabilities. The carrying amount in the definition refers to the original cost
    less any depreciation or impairment. (When) These changes in accounting estimates
    happen when we provide allowances for the following: doubtful accounts, useful life,
    inventory obsolescence, and warranty costs. (How) Unlike in Accounting Policies, the
    changes in Accounting Estimates are not treated Retrospectively but rather Currently
    and Prospectively. This means that the effects are recognized in the current and
    future periods, and there’s no need to go back to the prior periods for adjustments as
    these changes are not errors. (When) Also, this is the treatment because changes
    are expected and recurring, and doing estimates is a very significant task in the
    accounting process especially in Management Accounting since we cannot
    accurately measure our future expenses and revenues.
    On to the last topic, Prior Period Errors. (What) These are just omissions and
    misstatements we do when preparing financial statements. (When) These errors
    happen due to the following events: Mathematical Mistakes, Misinterpretation of
    Facts, Mistakes in Applying Accounting Policies, Fraud, and Oversight. (How) Since
    this is an error, you might have thought that this is treated Retrospectively; you are
    partly right, why? Because Prior Period Errors are also treated Prospectively. (Why) If
    the error made was material to the prior periods then, the treatment is definitely
    Retrospectively and restatement have to be made with proper disclosure. But, if it’s
    deemed immaterial then, just proceed prospectively.

    Before ending the discussion, I showed an example of restatement from an existing


    entity but didn’t give the name for its privacy to show the class how it’s made and to
    help them familiarize themselves with it. No questions were asked during and after
    the discussion.

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