Entities are entitled to change any accounting policy, on condition the change is either required by an IFRS or is a voluntary change that results in information that is relevant and more reliable.  

(Indicate whether the above statement is true or false)

If an error is found, it must be corrected, with the correcting adjustments processed retrospectively. 

(Indicate whether the above statement is true or false)

When accounting for a change in accounting policy where retrospective application of the new policy is technically required but is impracticable to achieve, the change in accounting policy is accounted for prospectively instead.

(Indicate whether the above statement is true or false)

Any change to an accounting estimate must be accounted for prospectively whereas any change in accounting policy must be accounted for retrospectively. 

(Indicate whether the above statements are true or false)

Accounting policies are defined as the principles and rules, as set out in the International Financial Reporting Standards, that an entity applies in preparing and presenting its financial statements.

(Indicate whether the above statement is true or false)

When accounting for a change in accounting policy retrospectively, we process adjustments relating to all current and prior periods affected, including prior periods that will not be presented as comparatives.

(Indicate whether the above statement is true or false)

A retrenchment package offered to employees, payable within 3 months of year-end, meets the definition of a short-term benefit since a short-term employee benefit is defined as an employee benefit expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service.

(Indicate whether the above statement is true or false)

Short-term employee benefits differ from all other employee benefits in one way: they are payable within 12 months from reporting date whereas other employee benefits are payable after 12 months from reporting date.

(Indicate whether the above statement is true or false)

The essential difference between termination benefits and all other categories of employee benefits is that termination benefits do not relate to services provided by the employee. 

(Indicate whether the above statement is true or false)

Which of the following statements are correct?

1. Obligations arising from past events that exist independently of an entity’s future actions are recognised as provisions

2. Obligations arising from past events that an entity can avoid by its future actions are recognised as provisions

3. Costs relating to past environmental damage are an example of an obligation that exists independently of an entity’s future actions

4. Costs relating to the fitting of partitions for a smoking section in a restaurant that is required by law are an example of an obligation that exists independently of an entity’s future actions

(Choose one correct option only)