Definitions Flashcards
Define Asset
A present economic resource controlled by an entity as a result of past events
Define Liability
A present obligation of the entity to transfer an economic resource as a result of a past event
Define Equity
A residual interest when deducting all liabilities from assets
Define Income
Increase in asset or decrease in liabilities that result in an increase in equity
Define Expenses
Decrease in assets o increase in liabilities that result in a decrease in equity
Define Fair Value (IFRS 13)
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date
Define IFRS 5 Discontinued Operation
A component of an entity that has been sold, or held for sale and is a:
Separate line of business
Part of a plan to dispose of a Separate line of Business
A Sub acquired purely for resale
Define Interim Financial Reporting IAS 34
Interim Period is a financial reporting period that is shorter than a full financial year
Condensed SFP, SPL, SOCIE, SCF, Selected Disclosure Notes
IFRS 15 - Revenue from Contracts with Customers (5 Steps)
1) Identify the Contract
2) Identify the Performance Obligation
3) Determine the Transaction Price
4) Allocate the transaction price to the perf obl
5) Recognise revenue when perf obl is satisfied
Define Performance Obligation
Promise to transfer goods or services to a customer
Define Principal
Providing good or service
If controls the good or service before sale to customer
When is a performance obligations satisfied OVER time
- When customer simultaneously receives and consumes benefits from entity as it performs
- Entity is creating or enhancing asset controlled by customer
- Entity cannot use asset ‘for alternative use’ and entity can demand payment to date
Recognised PROGRESS TOWARDS COMPLETION
How is the FV of a non-financial asset measured?
Highest and Best Use
Define IAS 23 Borrowing Costs
Borrowing Costs are interest and other costs incurred on borrowing funds.
Entities MUST capatilise borrowing costs that are directly attributable to acquisition, construction or production of assets that take a substantial amount of time to get ready for use.
Define IAS 40 Investment Properties
Properties held to earn rentals or for capital appreciation or both
INITAL - measure at COST
SUBSEQUENT - COST or FV
GAIN/LOSSES to SPL
Define IAS 38 Intangible Assets
Identifiable non-monetary asset without physical substance.
RECOGNISE IF:
Identifiable
Controlled by Entity
Generate probable future economic benefits
Cost can be reliably measured
When should costs during development be recognised as an asset? PIRATE
Project is technically feasible Is financially able to complete project Reliably measured Able to use or sell asset Technically Feasible Economic benefits flow to entity
Define Impairment Loss IAS 36 Impairment of Assets
The amount by which the carrying amount exceeds the recoverable amount.
What is the recoverable amount?
Greater of FV-C2S and VIU (PV of future Cash Flows)
Indicators of Impairment?
Internal Damage Management committed to reorganisation Idle or Obsolete Assets Operating Losses in Business where the assets are used
EXTERNAL
Competitor Actions
Increasing Interest Rates
Market Value of Assets Falling
Define Functional Currency
The currency of the primary economic environment where an entity operates
Define Lease
A contract that conveys right to use an underlying asset for a period of time in exchange for consideration
Define Lessor
The entity that provides the ROU asset and receives consideration
Define Lessee
The entitiy that obtains the use of the ROU asset and transfers consideration
