2021 Flashcards
what is investment property?
property held to earn rentals / capital appreciation, rather than for use in prod / supply of g&s, admin, or sale in ordinary course of business
investment property examples?
- generates cash flows independently
- land held for cap app. or undetermined future use
- building leased out by the entity
- property constructed / dev for future use
portions of investment property?
if portions can be sold separately, account for separately. otherwise no.
what is an intangible asset?
an identifiable non-monetary asset without physical substance. not held for sale in ordinary business course.
what must intangible assets have?
- identifiability
- existence of future EB
- control over a resource
when is an asset identifiable?
if it is separable and arises from legal/contractual rights. no impact on bus continuity to exist.
measurement on intangible assets?
cost + import duties, non-ref taxes, etc
classifications for int-generated intangible assets?
- research phase
- development phase
(if indistinguishable, treat it as research phase only)
if intangible asset in research phase?
- not recognized
- will be P/L= an expense
- cannot demonstrate that an asset that will produce EB exists
useful life of intangible assets?
finite = amortize indefinite = not amortized, review EUL annually
pv of annuity for leases?
pmt x [1 - 1/(1 + i/m)^nm] / (i/m)
what is a financial instrument?
any contract that gives rise to a financial asset of one entity and a financial E/L in another
deciding accounting policy for financial assets?
- contractual CF = amortised costs
- realize FV changes = P/L and OCI (only OCI if we don’t trade frequently)
new conceptual framework liability definition?
a present obligation of the entity to transfer an economic resource as a result of past events. no practical ability to avoid duty. must be potentially occurring.
IAS 37 liability definition?
present obligation resulting from a past event from which future EBs are expected to flow from the entity. recognize L if possible and measurable.
probability of outflow?
if probable and certain of timing = L
if uncertain timing = provision
when do we recognize a provision?
- obligation is result of past event
- transfer of FEBs probable
- amt estimated reliably
what is a provision?
a liability with uncertain timing or uncertain amount
contingency?
not recognized as either because it is not measurable and/or not probable. possible occurrence, will only be confirmed with future event not controlled by the entity.
recognition of contingent L?
notes only
contingent A recog?
only if receipt is probable – disclose in notes
commitment?
when the comp commits to buy an asset at a future date and they will have a future obligation. we give a note disclosure.
if no current obligation at year end?
commitment, not contingent L
PPE vs non-current assets?
used in more than one period vs used in more than 12months period