misc theory Flashcards
state the six development recognition criteria according to IAS38.
Benefits : generates future economic benefits
Expenditure : reliably measureable
Availability : adequate resources to complete (technical & financial)
Use or sell : able to use or sell intangible asset
Technical : feasible for use or sale?
Intention : to complete development then use or sell it
what does IAS2 state?
defines inventory as assets held for sale in ordinary cause of business, in process of production, materials or supplies consumed in production.
requires inventory to be stated at lower of cost and NRV
what does IAS41 state?
biological assets can’t be measured using cost-based concepts
what does IAS36 state?
ensure assets carried at no more than recoverable amount.
how should impairment losses be allocated according to IAS36?
- usually against specific asset to which it relates
- when loss cannot be identified to specific asset, should be apportioned to cash generating unit. first to reduce goodwill then other assets on pro rata
state the four enhancing qualities.
understandability
timeliness
verifiability
comparability
define understandability.
assumes users have reasonable knowledge of business and economic activities
define timeliness.
info is available to influence users decision making
define verifiability.
different knowledgable and independent observers could broadly agree that the report provides faithful representation
define comparability.
info is useful to review performance both inter-company and inter-period
state the three values that makes financial information relevant.
predictive
confirmatory
material
state the three values that make financial information faithfully representative.
neutral
free from error
complete
which method of accounting would provide predictive value?
revaluation. provides more relevant info for users
