Key Topics: Conceptual framework, judgements and estimates, accounting policies, financial instruments

Standards covered: IAS 8 Accounting policies, IAS 32 financial instruments: presentation, IFRS 9 recognition and measurement

Description: In this requirement you are required to refer to the IASB conceptual framework and explain why disclosures relating to judgements and estimates are important to investors. This is a knowledge-based requirement which is followed by some application where you then need to apply this to a specific scenario with business combinations and identify where estimates might be required in group accounts. Part of this requirement expects you to critically assess some of Maple Cos own disclosures where judgement and estimate is involved. In critically assessing you need to consider what the estimate is in the question, think about the methodology used to come up with the estimate, consider if any experts were used and finally think about the investor’s perspective on the usefulness of the disclosure. You should also consider how entities establish accounting policies where an issue is not addressed directly by an IFRS standard. Consider the treatment of third-party loans and preference shares to ascertain if they should be recognised in line with specific standards based on the information in the scenario.