Amendments are proposed to GRAP 3 in Exposure Draft 201 on Improvements to the Standards of GRAP (2022). One of the amendments to the Standard is a change in the definition of accounting estimates.

The proposed amendment is taken from the amendments to IAS 8 on Accounting Policies, Changes in Accounting Estimates and Errors that removes the definition of a “change in accounting estimate” and replaces it with a definition of “accounting estimates”. The International Accounting Standards Board observed that the previous definition of a change in accounting estimate in IAS 8 was not sufficiently clear.

We noted from our local projects that our stakeholders experienced difficulties in distinguishing changes in accounting policies from changes in accounting estimates. This issue was also prevalent with users of IFRS^® Accounting Standards. The Board agreed that in order to maintain convergence with the IFRS Accounting Standards and to provide clarity on what constitutes an accounting estimate, the amendment should be adopted for the Standards of GRAP.

The proposed amendment removes the definition of a “change in accounting estimate” and replaces it with a definition of “accounting estimates”. Accounting estimates are defined as monetary amounts in financial statements that are subject to measurement uncertainty. The proposed amendment is to be applied prospectively.

To comment on this improvement please refer to Specific Matter for Comment, Question 1 in the Invitation to Comment. The documents for ED 201 can be accessed here.