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Illustrative Examples for ISA 540 (Revised) Auditing Accounting Estimates and Related Disclosures

The ISA 540 (Revised) Implementation Working Group has published a series of illustrative examples for auditing simple and complex accounting estimates and expected credit loss (ECL) accounting estimates. These examples may assist Australian auditors in understanding the practical application of the revised ASA 540 Auditing Accounting Estimates and Related Disclosures.

The examples illustrate how an auditor could address certain requirements of ISA 540 (Revised) and assist the auditor in understanding how ISA 540 may be applied to:

• Simple Accounting Estimate – Provision on Inventory Impairment
• Complex Accounting Estimate – Provision on Property, Plant and Equipment Impairment
• International Financial Reporting Standard (IFRS) 9 Impairment (ECL) – Credit Card
• IFRS 9 Impairment (ECL) – Significant Increase in Credit Risk
• IFRS 9 Impairment (ECL) – Macroeconomic Inputs and Data

Click the following links for more information.

Illustrative Examples for Auditing Simple and Complex Accounting Estimates
Illustrative Examples for Auditing Expected Credit Loss (ECL) Accounting Estimates

Feedback and queries on this topic are welcome and should be directed to enquiries@auasb.gov.au or by telephone +61 3 8080 7400.