Douglas Ltd has changed its measurement model for property, plant and equipment from
the revaluation model to the cost model.
(a) Is this event a change in accounting policy or a change in accounting estimate in
accordance with AASB 108 ‘Accounting Policies, Changes in Accounting Estimates
and Errors’?
(b) Would your answer to (a) be different if Douglas was adopting a policy of revaluing
assets for the first time in accordance with AASB 116 ‘Property, Plant and Equipment’?
(c) What course of action is available if it is difficult to distinguish between a change in
accounting policy and a change in an accounting estimate?
