Financial reporting standard 18 states that accounting policies are those principles, bases, conventions, rules and practices applied by an entity that specify how the effects of  material items are to be reflected in the financial statements. Any material item must firstly be:

1. Recognised in the financial statements as, either assets, liabilities, gains, losses, and changes to shareholders funds.
2. The measurement basis for the transaction must be selected. This monetary value can be chosen from two broad categories, current value or historic value.
3. The presentation of the information in the financial statements must enable the users to understand the policies adopted.

Should there be any changes to any one of the three bases (recognition, measurement and presentation) then there is deemed a change of accounting policy and that change, and the effect of the change, must be reported in the financial statements.  

This is in contrast to a change of an ‘estimate’ or estimation technique where none of the three elements are affected and thus not required to be reported in the accounts. The change from straight line depreciation to reducing balance depreciation involves a change in estimation technique while the change from historic cost to current value would involve a change in accounting policy.