T10 The regulatory and conceptual framework

Question 1

What is Income?

Answer 1

Increases in assest or Decreases in liabilities that result in an increase in equity, other than from contribution from the equity holders.

Question 2

What is an Expense?

Answer 2

Decrease in assets or a increase in liabilities that results in a decrase in equity, other than discrubutions to equity holder (Dividends)

Question 3

Define an asset

Answer 3

A present econiomic resourse controlled by the entity as a result of a past event

Question 4

Define a liability

Answer 4

A present obligation to transfer economics resourse as a result of a past event.

Question 5

Define Equity

Answer 5

Equity is the residual interest in the assets of an entity after deducting all of its liabilities

Question 6

What is teh definetion of Fair value

Answer 6

The price that can be recovered if teh assest or liabiliy was sold between marketparticipants

Question 7

What are the different levels of fair value?

Answer 7

Level 1 - Quoted price in a active market for identical item e.g shares
Level 2 - Observable price in an active market for a similar item and can be adjusted. e.g hosue market
Level 3 - Unobservable input = best estimate at the time

Question 8

Restructuring provision

Answer 8

Any costs relating to employees who are not being made redundant, you can’t include there costs in a provision e.g relocating staff.