1. Explain what is meant by ‘retrospective application’ of an accounting policy. When does AASB 108 ‘Accounting Policies, Changes in Accounting Estimates and Errors’ require

retrospective application of an accounting policy? Are there any exceptions?

2.What is the difference between a ‘retrospective application’ and a ‘retrospective

restatement’? 3. Changes in accounting estimates and errors relate to past reporting periods and as such they are often called ‘prior-period items’. What are the two general ways in which

prior-period items could be treated? Outline the arguments for and against each approach.