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Sunday, April 25, 2010

Prospective application

Prospective application is Prospective application of a change in accounting policy and of recognising the effect of a change in an accounting estimate, respectively, are:

(a) applying the new accounting policy to transactions, other events and conditions occurring after the date as at which the policy is changed; and

(b) recognising the effect of the change in the accounting estimate in the current and future periods affected by the change.

Prospective application is specifically discussed in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

Source: Glossary of Terms of IFRSs as at 31 December 2008.