9A Flashcards
What is recognition?
The process of formally recording an item in the financialstatements of an entity after it has met existing criteriaand been subject to cost benefits constrains and materiality threshold
What is realization?
FASB DEFENITION
The process of converting non-cash resources and rights into cash or claims to cash.
What are assets?
The three-part definition is
– obtaining or control it today
– It will provide benefits in the future
– It occurred as a result of past transaction
What are liability?
The three-part definition is
– owe it As of today
– You will sacrifice something in the future
–it occurred as a result of past transactions
What is equity?
Equity is the owners residual interest in the assets of an entity that remains after deducting liabilities.
TA = TL - TE => TE = TA - TL
What are revenues and expenses?
Revenues are increases and assets or decreases in liabilities during a period from delivering goods, rendering services, or other activities constituting the entities major or central operations.
Expenses are decreases in assets or increases and liabilities during a period fromdelivery of goods, rendering of services, or other activities constituting the entities major’s or central operation
Gains or losses?
Gains are increases in equity from peripheral trans actions of entity excluding revenues and investments by owners.
Losses are decreases in equity from peripheral turn the actions of entity excluding expenses and distributions to owners.
According to the IASB framework, the two criteria required for incorporating items into the income statement or statement of financial positionare that
It meets the definition of an element and can be measured reliably
Under IFRS, which of the following is the first step within the hierarchy of guidance to which management refers, and who is applicability it considers, when selecting accounting policy is?
Apply a standard from IFRS if it specifically relates to the transaction, other evidence, or condition.
According to the SFAC7, using cash flow information and present value in accounting measurements, the most relevant measurement of an entities liabilities at Initial recognition and fresh measurements should always reflect
The credit standing of the entity
What is the cost of that supports the issuance of interim reports
Relevance
What is the underlying concept that supports estimating a fixed asset impairment charge?
An estimate of an impairment charge to a fixed assets can only be a faithful representation if the entity has applied impairment rules properly, disclose the process of arriving at the impairment estimate and disclosed any uncertainties that affect the impairment estimate. Assuming the above was true,and no other estimate is better than the derived estimate, then the estimate is comprised of the best available information.
