IAS take the principle-based approach with regards to accounting policies, rather than the rules-based approach.
IAS 8 prescribes the criteria for selecting and changing accounting policies, together with the accounting treatments for changes in accounting policy and the correction of errors.
IAS 8 states that the correction of an error that relates to prior periods should be shown as an adjustment to the opening balance of retained earnings, and comparative information should be restated unless it is impracticable to do so.
*Accounting policies - the specific principles and practices applied by an entity in preparing and presenting financial statements.
Accounting policies selected should in accordance with IAS. If no standard is applicable then policies should be selected in accordance with: relevance, reliability, accounting concepts, etc.
Changes in accounting policy…