| 10.2 | Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. |
| 10.3 | If an FRS specifically addresses a transaction, other event or condition, an entity shall apply that FRS. However, the entity need not follow a requirement in an FRS if the effect of doing so would not be material. [AMD 272] |
| 10.4 | If an FRS does not specifically address a transaction, other event or condition, an entity's management shall use its judgement in developing and applying an accounting policy that results in information that is: [AMD 273] |
| (a) | relevant to the economic decision-making needs of users; and |
| (b) | reliable, in that the financial statements: |
| (i) | represent faithfully the financial position, financial performance and cash flows of the entity; |
| (ii) | reflect the economic substance of transactions, other events and conditions, and not merely the legal form; |
| (iii) | are neutral, ie free from bias; |
| (iv) | are prudent; and |
| (v) | are complete in all material respects. |
| 10.5 | In making the judgement described in paragraph 10.4, management shall refer to and consider the applicability of the following sources in descending order: |
| (a) | the requirements and guidance in an FRS dealing with similar and related issues; [AMD 274] |
| (b) | where an entity's financial statements are within the scope of a Statement of Recommended Practice (SORP) the requirements and guidance in that SORP dealing with similar and related issues; and |
| (c) | the definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses and the pervasive principles in Section 2 Concepts and Pervasive Principles. [AMD 275] |
| 10.6 | In making the judgement described in paragraph 10.4, management may also consider the requirements and guidance in EU-adopted IFRS dealing with similar and related issues. Paragraphs 1.4 to 1.7 require certain entities to apply IAS 33 Earnings per Share (as adopted in the EU), IFRS 8 Operating Segments (as adopted in the EU) or IFRS 6 Exploration for and Evaluation of Mineral Resources (as adopted in the EU). [AMD 276] |
| AMD 272 Amendment Paragraph 10.3 amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text 10.3 If an FRS or FRC Abstract specifically addresses a transaction, other event or condition, an entity shall apply that FRS or FRC Abstract. However, the entity need not follow a requirement in an FRS or FRC Abstract if the effect of doing so would not be material. |
| AMD 273 Amendment Paragraph 10.4 amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text 10.4 If an FRS or FRC Abstract does not specifically address a transaction, other event or condition, an entity's management shall use its judgement in developing and applying an accounting policy that results in information that is: |
| AMD 274 Amendment Paragraph 10.5(a) amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text (a) the requirements and guidance in an FRS or FRC Abstract dealing with similar and related issues; |
| AMD 275 Amendment Paragraph 10.5(c) amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text (c) the definitions, recognition criteria and measurement concepts for assets, liabilities, income and expenses and the pervasive principles in Section 2 Concepts and Pervasive Principles. |
| AMD 276 Amendment Paragraph 10.6 amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text 10.6 In making the judgement described in paragraph 10.4, management may also consider the requirements and guidance in EU-adopted IFRS dealing with similar and related issues. Paragraphs 1.4 to 1.7 require certain entities to apply IAS 33 Earnings per Share (as adopted in the EU), IFRS 8 Operating Segments (as adopted in the EU) or IFRS 6 Exploration for and Evaluation of Mineral Resources. |
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