''Accounting policies'' vs ''Notes to accounts''. a


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What is the difference??? and Is it so that the "change in accounting policies" are to be presented in "NOTES TO ACCOUNTS" or in "SIGNIFICANT ACCOUNTING POLICIES"????
 
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Fidget

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Accounting policies are the basis on which your accounts are produced and are driven by the accounting standards being reported under.

Notes to the accounts give further information on the content of the accounts and are mainly driven by the disclosure requirements of the accounting standards being reported on.

Changes in Accounting policy are disclosed in the notes to the accounts as per the disclosure requirements of the standards being used (IAS 8, for example, for International accounting standards). Significant accounting policies are actually also in the notes to the accounts rather than a separate thing.
 
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Fidget

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Yes, although you wouldn't say "..and changes thereto". In the Notes to the Accounts, Note 1 is usually labelled "Accounting Policies", or "Significant Accounting Policies". You would then have a brief paragraph setting out each of the main accounting policies and a paragraph detailing any changes in accounting policies.

It's probably worth pointing out that you should only really have a change in an accounting policy if;

* It is required by a new or amended accounting standard, or;
* The new policy being adopted would give a more true and fair presentation of whatever it is than the current policy.

In other words, you can't just change them to suit yourself.

Have a search around the internet for the annual reports of some companies, and look at the notes to the accounts to give you an idea of how they're set out.
 

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