Departure from accounting standards
In very rare circumstances, an entity may need to produce financial reports which do not comply with a specific accounting standard, if compliance with the standard would be so misleading they do not provide useful information to users, and the financial statements would no longer be fairly presented.
Under these circumstances, an entity may depart from the requirements of an International Financial Reporting Standard, but it must disclose:
- that management has concluded that the financial statements present fairly the entity’s financial position, financial performance and cash flows;
- that it has complied with applicable standards and Interpretations, except that it has departed from a particular requirement to achieve a fair presentation;
- the title of the standard or Interpretation from which the entity has departed, the nature of the departure, including the treatment that the IFRS would require, the reason why that treatment would be misleading, and the treatment adopted; and
- for each period presented, the financial effect of the departure on each item in the financial statements that would have been reported in complying with the requirement.