IFRS Terms

a particular form of general purpose financial reports that provide information about the reporting entity's assets, liabilities, equity, income, and expenses

general purpose financial statements

produce cash flows indirectly

historical/current cost

increase on asset, or decrease in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims

income

means checking the inputs to a model, formula or other technique and recalculating the outputs using the same methodology

indirect verification

the cost an asset acquired, or of a liability incurred, as a result of an event that is a transaction on market terms is normally similar to its fair value at that date, unless transaction costs are significant

initial recognition

financial statements are prepared for a

specific period of time (reporting period)

a right that has the potential to produce economic benefits

economic resource

are the things the company has to generate revenues

economic resources

financial information is capable of making a difference in decisions of it has

predictive value, confirmatory value, or both

specifying a simplified measurement approach that is likely to provide information similar to that provided by a

preferred measurement basis

can exist even if a transfer of economic resources be enforced until some point in the future

present obligation

existing and potential investors, lenders, and other creditors

primary users ( GPFR)

the residual amount that remains after expenses have been deducted from income

profit

the exercise of caution when making judgements under conditions of uncertainty

prudence

the process of capturing for inclusion in the statement of financial position or the statement of financial performance an item that meets the definition of one of the elements of financial statements

recognition

the fundamental qualitative characteristics are

relevance & faithful representation

an entity that is required, or chooses, to prepare general purpose financial statements

reporting entity

financial statements provide information about transactions and other events viewed from the perspective of the

reporting entity

is an entity that is required, or chooses, to prepare financial statements

reporting entity

continuing to recognize the assets or liabilities retained

retained component

financial information that is useful to primary users of general purpose financial reports in making decisions relating to providing resources to the reporting entity.

useful financial information

see primary users ( of GPFR)

users ( of GPFR)

financial information has _____ if it can be used as an input to process employed by users to predict future outcomes

Predictive Value

They also find GPFR useful but are not primarily directed to them

Regulators & members of the public

is capable of making a difference in the decisions made by users.

Relevance

recognizing assets, liabilities and equity

Statement of financial position

the adding together of assets, liabilities, equity, income, and expenses that have shared characteristics and are included in the same classification

aggregation

managing financial assets and liabilities collecting contractual cash flows

amortized cost

economic resources of the entity

asset

the amount at which an asset, a liability or equity is recognized in the statement of financial position

carrying amount

one way to estimate the measure is by using _________

cash-flow-based measurement techniques

the amount that provides the most relevant information is usually one from within the central part of the range (6.93)

central estimate

the sorting of assets, liabilities, equity, income, or expenses on the basis of shared characteristics for presentation and disclosure purposes

classification

financial statements of a reporting entity that comprises two or more entities that are not all linked by a parent-subsidiary relationship

combined financial statements

does not relate to a single item

comparability

the usefulness of financial information is enhanced if it is

comparable, verifiable, timely, & understandable

it includes all information necessary for a user to understand the phenomenon being depicted, including all necessary depictions and explanations.

complete depiction

financial statements of a reporting entity that comprises both the parent and its subsidiaries

consolidated financial statements

the present ability to direct the use of economic resource and obtain the economic benefits that may flow from it

control of an economic resource

mission of IFRS

"Transparency, Accountability, Efficiency

includes the present ability to prevent other parties from directing the use of the economic resource and from obtaining the economic benefits that may flow from it

Control

links an economic resource to an entity

Control

is a pervasive constraint on the information that can be provided by the financial reporting.

Cost constraint

is the cost of an equivalent asset at the measurement date; is the consideration that would be received for an equivalent liability

Current Cost

measures provide monetary information about assets, liabilities and related income and expenses, using information updated to reflect conditions at the measurement date

Current Value

a comparison requires at least

2 items

depicts the effects of transactions and other events and circumstances on a reporting entity's economic resources and claims in the period in which those effects occur

Accrual Accounting

it provides better basis for assessing the entity's past and future performance

Accrual Accounting

record transactions when they occur

Accrual Accounting

can be used in applying a modified measurement basis

Cash-flow-based measurement

information about a reporting entity is more useful if it can be compared with similar information about other entities and with similar information about the same entity for another period or another date

Comparability

is the qualitative characteristic that enables users to identify and understand similarities in, and differences among items.

Comparability

_____ is the goal; _____ helps to achieve that goal

Comparability, Consistency

are qualitative characteristics that enhance the usefulness of information that both is relevant and provides a faithful representation of what it purports to represent

Comparability, verifiability, timeliness, & understandability

establishes the concepts that are the goal towards which the board and preparers strive to essential financial reporting evolve to improve its usefulness

Conceptual Framework

establishes the concepts that underlie those estimates, judgements, and models

Conceptual Framework

Financial information has ______ if it provides feedback about previous evaluations

Confirmatory Value

refers to the use of the same methods for the same time, either from period to period within a reporting entity or in a single period across entities

Consistency

if the entity has no practical ability to act in a manner inconsistent with those practices, policies or statements

Constructive Obligation

an entity to perform work at a future date may exist now even if the counterparty cannot require the entity to perform the work until that future date.

Contractual obligation

establishes a combined right and obligation to exchange economic resources

Executory contract

is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date

Fair Value

FS are normally prepared on the assumption and will continue in operation for the foreseeable future

Going concern assumption

information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of GPFR make on the basis of those reports, which provide financial information about a specific reporting entity

Materiality

is an entity-specific aspect of relevance based on the nature or magnitude, or both, of the items to which the information relates in the context of an individual entity's financial report

Materiality

is a duty or responsibility that an entity has no practical ability to avoid

Obligation

The GPFR do not & cannot provide all info so where do the ILOC need to consider

Pertinent Information from other sources

under this concept a profit is earned only if the financial amount of the net assets at the end of the period exceeds the financial amount of net assets at the beginning of the period, after excluding ...... (basta liabilities gud kapoyg type sa standard)

Physical Capital maintenance

helps assure users that information faithfully represents the economic phenomena it purports to represent

Verifiability

is enhanced by using measurement basis that result in measures that can be independently corroborated either directly or indirectly

Verifiability

means that different knowledge and independent observers could reach consensus, although not necessarily complete agreement, that a particular depiction is a faithful representation

Verifiability

the removal of all or part of a recognized asset or liability from an entity's statement of financial position

derecognition

verification can be

direct or indirect

means verifying an amount or other representation through direct observation

direct verification

a qualitative characteristic that makes useful information more useful. the enhancing qualitative characteristics are comparability, verifiability, timeliness, and understandability

enhancing qualitative characteristic

is more useful than standardized descriptions, sometimes referred to as 'boilerplate'

entity-specific information

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

equity

a claim on the residual interest in the assets of the entity after deducting all its liabilities

equity claim

a contract, or a portion of a contract, that is equally unperformed - neither party has fulfilled any of its obligations, or both parties have partially fulfilled their obligations to an equal extent

executory contract

reflects the entire range of outcomes and gives more weight to the outcomes that are more likely. (6.93)

expected value

decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claim

expenses

is adopted by most entities in preparing their financial statements. such as invested money or invested purchasing power, Capital is synonymous whit the net assets or equityof the entity

financial concepts of capital

GPFR provides information about ____.

financial position

is the present value of cash, or other economic resources that an entity expects to be obliged to transfer as it fulfills a liability

fulfillment value

a qualitative characteristic that financial information must possess to be useful to the primary users of general purpose financial reports. the fundamental qualitative characteristic are relevance and faithful representation

fundamental qualitative characteristic

a present obligation of the entity to transfer an economic resource as a result of past events

liability

the result of applying a measurement basis to an asset or liability and related income and expense

measure

a change in ______ can make financial statements less understandable

measurement basis

an identified feature - for example, historical cost, fair value or fulfillment value - of an item being measured

measurement basis

using different measurement basis for those assets and liabilities can create a

measurement inconsistency (accounting mismatch)

uncertainty that arises when monetary amounts in financial reports cannot be observed directly and must instead be estimated

measurement uncertainty

financial capital maintenance can be measured in either

nominal monetary units or units of constant purchasing power

grouping an asset and liability that are recognized and measured as a separate units of account into a single net amount in the statement of financial position

offsetting

uncertainty about the amount or timing of any inflow or outflow of economic benefits that will result from an asset or liability

outcome uncertainty

such as operating capability, Capital is regarded as the productive capacity of entity based on, for example, units of output per day.

physical concept of capital

refers to all those assets and liabilities

transferred component

classifying, characterizing, and presenting information clearly and concisely

understandability

depends partly on how many different measurement basis are used and on whether they change over time

understandability

the right or the group of rights, the obligation or the group of obligations, to which recognition criteria and measurement concepts are applied

unit of account