what is the defferent between accounting policy and accountig estamite and please give me examples?

Question

accordance to IAS 8

Answer 1

Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. Examples of a/cg policies are depreciation policies (straight-line or declining method?), inventory cost formulas (FIFO or weighted average?), choice of functional and presentation currency, recognition of employees' leave entitlements, etc.

Accounting estimates (partly extracted from IAS 8) -
32.As a result of the uncertainties inherent in business activities, many items in financial statements cannot be measured with precision but can only be estimated. Estimation involves judgements based on the latest available, reliable information. An accounting estimate is an approximation of the amount of an item in the absence of a
precise means of measurement. For example, accounting estimates may be required of:
(a)bad debts;
(b)inventory obsolescence;
(c)the fair value of financial assets or financial liabilities;
(d)the useful lives of, or expected pattern of consumption of the future economic benefits embodied in, depreciable assets; and
(e)warranty obligations.

33.The use of reasonable estimates is an essential part of the preparation of financial statements and does not undermine their reliability.

Answer 2

I am not sure I'm understanding your question, but I will give you an answer to what I think you are trying to find out.

Accounting policy is a general accounting practice that is accepted everywhere. For example, when you write a check, you would withdraw the money from your checkbook (also known as debitting it), and when you make a deposit, you would "credit" the money to your checkbook. Every accountant would use the terms "debit" and "credit" and make a specific entry relating to each regardless of what the average person might call it.

An accounting estimate would be a guess, often used for projecting amounts. For example, if you wrote a check to pay for fixing your car, but then could not remember how much you wrote the check for, you would guess (estimate) the amount to be higher so that you would have less chance of bouncing a check. Or, if you were creating a budget for the next year, you would guess how much money you were going to spend for utilities, rent, gas, employees, and so on so that you might be able to guess how much money you would need to bring in so that your company could be successful. This would be another type of accounting estimate.

Hope this helps.

Answer 3

A number of figures in financial statements can not be determined by inspecting documents such as bank statements and consequently have to be calculated. For example, depreciation of assets over time.

An accounting policy usually relates to the method chosen to calculate some value. For example, to calculate depreciation you might use the "market value" method, where you estimate what the asset could be sold for now, and your depreciation is whatever is necessary to write the asset down to that amount. Or you could use the "straight line" method, where you estimate the useful life the asset, say, four years, and write the asset down by 1/4 of its cost each year of its life.

An accounting estimate is as assumption that feeds into the accounting policy's calculations. For example, "what the asset could be sold for" or the asset's "useful life" would both be accounting estimates.