Distinguishing between accounting policies and accounting estimates is important because changes in accounting policies are generally applied retrospectively, while changes in accounting estimates are applied prospectively. The approach taken can therefore affect both the reported results and trends between periods. Therefore, the International Accounting Standards Board (IASB) issued amendments to IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors to clarify how companies should distinguish changes in accounting policies from changes in accounting estimates, with a primary focus on the definition of and clarifications on accounting estimates. The amendments introduce a new definition for accounting estimates. The amendments are effective for periods beginning on or after 1 January 2023. This edition of Accounting and Auditing Update (AAU) contains an article on this topic which discusses the recent amendments to IAS 8 which are also expected in Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors. Additionally, the article summarises the auditing guidance in relation to accounting estimates and discusses key considerations for management and auditors

The disclosure and communication of Environmental, Social, and Governance (ESG) goals, as well as a company's progress toward them represent sustainability reporting. Over the past decade, sustainability reporting has gained prominence among the investors, regulators and other stakeholders. Many countries across the globe are adopting mandatory reporting and disclosure of sustainability related information. The accountancy profession plays a major role in sustainability reporting from the perspective of technical competency in preparing, presenting, and assurance. While global sustainability reporting standards will be essential to meet the information needs of investors and other stakeholders, it is critical to recognise the role of ethics in supporting public trust in sustainability reporting and assurance. The publication carries an article on ethical considerations related to sustainable reporting which summarises guidance on the challenges with respect to consideration of professional ethics in sustainability reporting.

As is the case each month, we have also included a regular round-up of some recent regulatory updates in India.

We would be delighted to receive feedback/suggestions from you on the topics we should cover in the forthcoming editions of the AAU.

For more information on this update, please write to aaupdate@kpmg.com.