Changes in accounting estimates under IAS 8 should be applied how?

Under IAS 8, changes in accounting estimates are required to be applied prospectively. This approach means that the effects of the change in estimate are to be recognized in the financial statements in the period of the change and in future periods, if applicable. It reflects the nature of accounting estimates, which are inherently uncertain and based on the best available information at the time.

Applying changes prospectively allows entities to adjust their future financial reporting to reflect more accurately the new estimates without altering prior periods' financial results. This is essential for maintaining consistency and comparability in financial reporting, enabling users of financial statements to make better-informed decisions based on current and future performance rather than potentially outdated or revised historical figures.