SBR Flashcards
Fundamental Qualitative Charateristics of useful information (Must have)
- Relevance
2.Materiality
3.Faithful representation
Enhancing qualitative characteristics of useful information
1.Comparability
2.Verifiability
3.Timeliness
4.Understandability
Financial Asset and Non-financial asset
1.Financial Asset: Receivable, cash, bank
2.Non-financial asset: PPE, Intangible asset, Investment property
-Share before Co pay dividends = cum-div shares have high FV
-Share after Co pay dividends= ex-div shares have low FV
IAS36: Year 1 impair, Year 2 revalue up with FV exceed historical cost
Then, IAS 36 treat as if no previous impair in year 1
=>Do in year 2 as follows:
-Yr2 charge extra Dep
-Limit RR on depreciated historical cost
Crytocurrency can be
Crytocurrency can be:
-Intangible asset if not easily converted into cash
-Financial asset if easily converted into cash
Intangible asset (Defination and conditions)
Intangible asset: is an identifiable non-moneytary asset without physical substance
Intangible asset must be:
1. Separate identifiable
2. Control exists
3. Probable future economics benefits
4. Cost of intangible asset can be measured reliably
Internally generated intangible asset
Internally generated intangible asset
-If research: exp off
-If development: 6 criterias:
1. Technical feasibility
2. Intention to complete
3. Its ability to use or sell the intangible assset
4. IA will generate probable future economics benefits
5. Availability of adequate technical, financial and other resources to complete
6. Ability to measure reliably the exp
Lưu ý khi tính impairment theo cash generating unit
Vì other asset other than specific & Good will be allocated pro-rata basis nên sau khi tính phải so sánh với FVLCS của chính tài sản đó
CV không được thấp hơn FVLCS, sẽ lấy FVLCS và điều chỉnh lại phần dư cho tài sản khác.
Xem ví dụ ở lesson 4, Canto
IAS20: Gov Grant related to asset and income
- Gov grant related to assets: 2 ways to do:
-To be set up as deferred income
-Or deduct grant from the cost of asset and dep the net cost - Gov grant related to income:
-If exp already incurred ->recognise to SOPL (either other income or deduct from exp)
-If future exp -> defer grant income
If repayment of Gov grant ->IAS8, repay grant prospectively with previous year unchanged
IFRS5 Held for sale: Conditions
IFRS5 Held for sale: Conditions
1. Available for immediate sale in its present condition.
- The sale must be highly probable:
-Management must be committed to a plan to sell the asset
-Asset must be actively marketed for sale at a price that reasonable in relation to its current fair value
-Sale should be expected within one year
If more than 1 year due to unforseen and beyond control of mgt -> entity shall measure the cost to sell at their present value
Any increase in present value of cost to sell ->presented in profit or loss as a finnancing cost
Presenting discontinued operations
A discontinued operation is a component of an entity that either has been disposed of,or is classified as held for sale, and
1. Represents a separate major line of business or geographical area of operations,
2. Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, or
3. Is a subsidiary acquired exclusively with a view to resale
Provision
Provision: As a liabilities of uncertain timing and amount. A provision should be recognised when, and only when:
1. An entity has a present obligation (legal or constructive) as as result of a past event.
2. It is probable (means: more than 50% chance, ie, more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation, and
3. A reliable estimate can be made of the amount of the obligation
A Contingent Liability
A Contingent Liability is:
a. A possible obligation that arises from past events and whose existence will
be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or
b, a present obligation that arises from past events but is not recognised because:
-it is not probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; or
-the amount of the obligation cannot be measured with sufficient reliability.
An entity should not recognise a contingent liability. An entity should disclose a
contingent liability, unless the possibility of an outflow of resources embodying
economic benefits is remote.
Treasury shares
If an entity reacquires its own equity instruments, those instruments (‘treasury
shares’) shall be deducted from equity. No gain or loss shall be recognised in profit
or loss on the purchase, sale, issue or cancellation of an entity’s own equity
instruments. Such treasury shares may be acquired and held by the entity or by
other members of the consolidated group. Consideration paid or received shall be
recognised directly in equity.
Reasons for share buyback:
-Company buyback the shares now and intend to re-issue as bonus shares later
and the company do not wish to dilute its control and share prices from the
bonus issue.
-Company intend to return money back to its shareholders.
-Company intend to de-list itself from the Stock Exchange.
