International Financial Reporting Standards
Financial Liabilities at Amortized Cost are accounted for i.e. the liability’s Effective Rate of Interest is CHARGED as a finance cost to the Profit or Loss (not the interest paid in cash) and changes in Market Rate of interest are IGNORED – i.e. the liability is not revalued at the reporting date. … Read More
Financial Liability Definition DEFINES Financial Liability any liability that is Contractual Obligation to DELIVER cash/another financial asset or to EXCHANGE financial assets/financial liabilities, Contract that will or May-be settled in entity’s own equity instruments. Financial Liability Definition IFRS 9 Financial Instruments specifies how an entity should CLASSIFY and MEASURE Financial Assets, Financial liabilities, and Contracts … Read More
Financial Asset Definition IFRS 9 DEFINES Financial Asset any asset that is Cash, Equity Instrument of another entity, Contractual Right to RECEIVE cash/another financial asset or to EXCHANGE financial assets/financial liabilities, Contract that will or May-be settled in entity’s own equity instruments. Financial Asset Definition IFRS 9 IFRS 9 Financial … Read More
Deferred Revenue IFRS 15, i.e. unearned revenue or customer prepayments, arises when a Co. receives payment from a customer before it has FULFILLED its performance obligations. Deferred Revenue IFRS 15 – Background IFRS 15 [Revenue from Contracts with Customers] PROVIDES guidance on Recognizing, Measuring and Disclosing revenue presented the concept … Read More
What does Hedge Mean STATES that ‘Hedge’ refers to a Strategic Position or Investment undertaken to OFFSET potential losses or risks incurred from another investment. The primary objective of hedging is to MINIMIZE the impact of adverse market movements or unforeseen events on one’s portfolio. What does Hedge Mean? 1. … Read More
What is Hedging in Trading STATES that ‘Hedging‘ is a Risk Management Technique that aims to PROTECT investments against adverse price movements. It INVOLVES a trade that acts as Insurance against potential losses in an existing position, thereby traders aim to limit their exposure to risk, stabilize their portfolios. What … Read More
What is the Difference between Assets and Liabilities a concept that STATES ‘Assets’ as Economic Resources owned or controlled by an entity to provide future benefits, AND ‘Liabilities’ represent the Obligations or Debts owed by an entity to external parties. Assets (As Per IAS 1) Assets can be DEFINED as … Read More
Reversal of Impairment Loss is INCREASING the value of a previously impaired asset when there is a change in circumstances indicating that the impairment loss is no longer necessary. What is Impairment? (As Per IAS 36) Impairment OCCURS when the carrying amount of an asset, such as property, plant, equipment, … Read More
IAS 16 Cost Model Vs Revaluation Model STATES that ‘COST’ Model values assets at their historical cost less accumulated depreciation, while the ‘REVALUATION’ Model allows for the upward or downward adjustment of assets’ carrying amounts based on their fair value. IAS 16 Cost Model ‘Cost Model’ is a traditional approach … Read More
The Statement of Cash Flows Indirect Method PRESENTS the SOCF beginning with net income or loss, with subsequent ADDITIONS to or DEDUCTIONS from that amount for non-cash revenue and expense items, resulting in cash flow from operating activities. International Accounting Standard (IAS 7) STATES that SOCF is a vital financial statement … Read More