Tag Archives: domains of professional judgement

Application of Professional Judgement in International Financial Reporting Standards (Published)

This essay accesses the use of professional judgements in the preparation and implementation of international financial reporting standards by preparers of financial statements. The article samples some domains of professional judgement in financial reporting contained in the Conceptual Framework for Financial Reporting (2018) and selected IAS/IFRS to demonstrate how judgement is exercised in the preparation and presentation of principles-based standards. The sampled domains or action areas for the exercise of professional judgement are going concern, materiality, accruals accounting,  accounting policies, presentation/disclosure, measurements, estimates,  recognition/de-recognition, classifications and revenue recognition. From the analyses of these domains, the essay concludes that (i) the exercise of professional judgement is a sine qua non in the implementation of  IFRSs; and by extension,  the ability to exercise professional judgement is not only the key skill for preparers of PBS-based financial statements; it is also the hallmark of an accounting professional.

Clement Chiahemba Ajekwe (2022) Application of Professional Judgement in International Financial Reporting Standards, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 7, pp.17-30

 

Keywords: Financial Reporting, IFRS Conceptual Framework for Financial Reporting, Professional judgements, domains of professional judgement, principles-based standards