Abstract

Accounting policies are applied consistently so that financial statements can be easily analyzed and compared from one period to another. In general, the standard requires that the entity must apply accounting policies in preparing reports consistently or not change. Application of accounting policies often requires entities to use accounting estimates. The selection of an accounting estimate is based on the information available at the time the estimate was selected. The selection of an incorrect estimate is influenced by changes in the business environment and evolving technology. For that the entity can change the estimate that has been determined. Changes in this estimate will then cause the measurement basis of an expense or income to be inconsistent between one period and the next. Therefore, it is necessary to have a special standard that regulates the change in the estimate. PSAK 25 Accounting Policies, Changes in Accounting Estimates and Errors, comprehensively regulates the selection of accounting policies, changes in accounting policies, changes in estimates and correction of errors. PSAK 25 is the adoption of all arrangements in IAS & Accounting Policies, Changes in Accounting Estimates and Errors. The difference with IAS is only related to the effective date and regulations of capital market regulators in the additional definition of financial accounting standards standar.