Impracticable

Last update 17/08/2019

It is impracticable to apply a requirement if the entity cannot apply it after making every reasonable effort to do so. ‘Impracticable’ is a high hurdle. What constitutes undue cost or effort is a matter of judgement.

In short:

IFRS definition IAS 8: Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. For a particular prior period, it is impracticable to apply a change in an accounting policy retrospectively or to make a retrospective restatement to correct an error if:

1. the effects of the retrospective application or retrospective restatement are not determinable;
2. the retrospective application or retrospective restatement requires assumptions about what management’s intent would have been in that period; or
3. the retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that:
   1. provides evidence of circumstances that existed on the date(s) as at which those amounts are to be recognised,
      measured or disclosed; and
   2. would have been available when the financial statements for that prior

IFRS definition IAS 1 7: Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so.

The longer version

Either:

1. Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so.
2. Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. For a particular prior period, it is impracticable to apply a change in an accounting policy retrospectively or to make a retrospective restatement to correct an error if:
   1. The effects of the retrospective application or retrospective restatement are not determinable;
   2. The retrospective application or retrospective restatement requires assumptions about what management’s intent would have been in that period; or
   3. The retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that:
      1. Provides evidence of circumstances that existed on the date(s) as at which those amounts are to be recognised, measured, or disclosed; and
      2.  Would have been available when the financial statements for that prior period were authorised for issue;

from other information.

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