Why Does IASB Prohibit Retrospective Treatment of Changes in Accounting

question 14

Multiple Choice

Why does IASB prohibit retrospective treatment of changes in accounting estimates?

• A)The IASB view changes in estimates as normal recurring corrections and adjustments, which are the natural result of the accounting process.
• B)The IASB does not allow the retrospective treatment for any type of presentation.
• C)The IASB prohibits retrospective treatment of changes in accounting estimates because IFRS requires it.
• D)IASB does not prohibit retrospective treatment of changes in accounting estimates, but is silent on this issue

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Definitions:

Tax Rates

The percentage at which an individual or corporation is taxed by the government on income or profits.

Tax Revenue

Revenue collected by governments from taxes.

Keynesian Economists

Scholars and practitioners of economics who follow and build upon the theories of John Maynard Keynes, emphasizing the importance of total spending in the economy and government interventions to stabilize economic cycles.

Private Sector

The part of the economy that is run by individuals and companies for profit and is not state controlled.