Document ID: chunk:federal_register_of_legislation:F2023C00187:body:0:p9
Version: federal_register_of_legislation:F2023C00187
Segment Type: other
Provision Reference: 
Character Range: 22427–25344

fact; and
(b) known or reasonably estimable information relevant to assessing the possible impact that application of the new Australian Accounting Standard will have on the entity's financial statements in the period of initial application.
31 In complying with paragraph 30, an entity considers disclosing:
(a) the title of the new Australian Accounting Standard;
(b) the nature of the impending change or changes in accounting policy;
(c) the date by which application of the Australian Accounting Standard is required;
(d) the date as at which it plans to apply the Australian Accounting Standard initially; and
(e) either:
(i) a discussion of the impact that initial application of the Australian Accounting Standard is expected to have on the entity's financial statements; or
(ii) if that impact is not known or reasonably estimable, a statement to that effect.

Accounting estimates
32 An accounting policy may require items in financial statements to be measured in a way that involves measurement uncertainty – that is, the accounting policy may require such items to be measured at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, an entity develops an accounting estimate to achieve the objective set out by the accounting policy. Developing accounting estimates involves the use of judgements or assumptions based on the latest available, reliable information. Examples of accounting estimates include:
(a) a loss allowance for expected credit losses, applying AASB 9 Financial Instruments;
(b) the net realisable value of an item of inventory, applying AASB 102 Inventories;
(c) the fair value of an asset or liability, applying AASB 13 Fair Value Measurement;
(d) the depreciation expense for an item of property, plant and equipment, applying AASB 116; and
(e) a provision for warranty obligations, applying AASB 137 Provisions, Contingent Liabilities and Contingent Assets.
32A An entity uses measurement techniques and inputs to develop an accounting estimate. Measurement techniques include estimation techniques (for example, techniques used to measure a loss allowance for expected credit losses applying AASB 9) and valuation techniques (for example, techniques used to measure the fair value of an asset or liability applying AASB 13).
32B The term 'estimate' in Australian Accounting Standards sometimes refers to an estimate that is not an accounting estimate as defined in this Standard. For example, it sometimes refers to an input used in developing accounting estimates.
33 The use of reasonable estimates is an essential part of the preparation of financial statements and does not undermine their reliability.

Changes in accounting estimates
34 An entity may need to change an accounting estimate if changes occur in the circumstances on which the accounting estimate was based or as a result of new information, new developments or more