Week 6 Non-current Assets and Depreciation (1) Flashcards
What is going concern?
going concern is when we assume the entity will continue in operation for the forseeable future. there is no intention to put the entity into liquidation.
what is accruals?
accruals is when revenues and costs must be recognisedas they are earned or incurred, not as money is paid or reciveed.
What is the fundamental accounting equation?
the fundamental accounting equation is:
Assets = Equity + liabilities
what is the duality concept?
the duality concept is also known as double entryand it assumes that every transaction affects at least two accounts in a set of financial statement in such a manner as to keep the accounting equation in balance.
what is measurement?
Measurement is the ‘process of determining the monetary amounts at which the elements of the financial statements are to be recognised and carried in the statement of financial position and the comprehensive income statement.’ (IASC, Framework, 1989)
what is histroical cost measurement basis?
historical cost measures provides information derived from historical price of the transaction or event that gave rise to the item being consdiered for measurement. the historucal cost of both an asset and a liability will be updated over time to depict any consumption of the asset or fufilment if teh liability, or the impact of any events that cause the asset to become impaired or the liability onerous.
what is the current value of measurement basis?
current value measures provide monetary information about elements, using information updated to reflect conditons at the measurement date, meausrement bases may include fair valeu, value in use (for assets), fuffilment value ( for liabilities) and current cost.
What is fair value?
fair value is the pruce that would be recieved to sell an asset, or paid to transfer a liability, in an orderly transaction between market parcipants at the measurement date (realisable value)
what is current cost?
current cost( replacement cost) reflects the current amount thta wpuld be:
paid to acquire an equivalent asset
recieved to take on equivalent liability
what is present value (value in use)?
present valye or value in use is the presenet value of cashflows or other benefits that the entity will recieve during the lifetime of the asset or liability.
what are non current assets?
Measurement is the ‘process of determining the monetary amounts at which the elements of the financial statements are to be recognised and carried in the statement of financial position and the comprehensive income statement.’ (IASC, Framework, 1989)
what are current assets?
Measurement is the ‘process of determining the monetary amounts at which the elements of the financial statements are to be recognised and carried in the statement of financial position and the comprehensive income statement.’ (IASC, Framework, 1989)
what is capitalised?
Measurement is the ‘process of determining the monetary amounts at which the elements of the financial statements are to be recognised and carried in the statement of financial position and the comprehensive income statement.’ (IASC, Framework, 1989)
