Final Revision Flashcards
Consolidated
Different Business Activity: Yes
Different reporting standards: Yes
Loss control: No
What defines control
Having majority shares = no. Not in the definition but can mean control
Power = yes
Exposure or rights to returns
Power to influence = yes
Provisions vs recognition
If published policy = make a provision
ROU Assets - Depreciation
Always depreciated over shorter of lease and its useful life
Which TWO of the following statements are true when using historical cost accounting compared to current value accounting in this type of market?
Capital employed using historic costs = understated
Historical cost profits are overstated in comparison to current values
Recognition of ROU asset
The amount of the initial measurement of the lease liability plus any initial direct costs and dismantling costs
Leases - Current vs Non-Current Liability
The year after is the non-current liability
The difference between the two is the current liability e.g. what we have to pay in the next year
Including in asset value
Costs of initial testing are, training isn’t
Testing for Goodwill
Not only required when circumstances indicate impairment
R&D Move to development
Must move to intangible asset
Adjusting events
Evidence of diminunition of property = yes
Financial Instruments: transaction costs
Go to P&L, exclude from asset value
Rules based system
Concept based system
Offers accountants more protection in litgation
Prevents fire fighting
Impairment
Lower of carrying value or recoverable
Recoverable: higher of VIU or FV less costs to sell
Output method
Surveys of performance against revenue
Physical milestones
