Critical estimates judgements and errors
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the group’s accounting policies. (IAS 1.122, IAS 1.125)
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information about each of these estimates and judgements is included in other notes together with information about the basis of calculation for each affected line item in the financial statements.
In addition, this note also explains where there have been actual adjustments this year as a result of an error and of changes to previous estimates.
[Entities with operations in the UK, or that are doing a significant amount of business with the UK, should consider the extent to which additional disclosures are necessary to explain the impact of Brexit-related risks on their financial statements arising from the UK’s Brexit decision, see below.]
(a) Significant estimates and judgements
The areas involving significant estimates or judgements are disclosed in other areas of the notes to facilitate a complete overview of each IFRS subject/Note disclosure. These significant estimates or judgements are:
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.