1 A B C D E F G H I J K L M N O P Q R S T U V W

Economic life

Either the period over which an asset is expected to be economically usable by one or more users or the number of production or similar units expected to be obtained from an asset by one or more users.

 

 

 

 

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Effective interest method

The method that is used in the calculation of the amortised cost of a financial asset or a financial liability and in the allocation and recognition of the interest revenue or interest expense in profit or loss over the relevant period.

 

 

 

 

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Effective interest rate

The rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, an entity shall estimate the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but shall not consider the expected credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate (see paragraphs B5.4.1–B5.4.3), transaction costs, and all other premiums or discounts. There is a presumption … Read more

Embedded derivative

An embedded derivative is a component of a hybrid (combined) instrument that also includes a non-derivative host contract-with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract.

 

 

 

 

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Employee benefits

Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment.

 

 

 

 

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Employees and others providing similar services

Individuals who render personal services to the entity and either (a) the individuals are regarded as employees for legal or tax purposes, (b) the individuals work for the entity under its direction in the same way as individuals who are regarded as employees for legal or tax purposes, or (c) the services rendered are similar to those rendered by employees. For example, the term encompasses all management personnel, ie those persons having authority and responsibility for planning, directing and controlling the activities of the entity, including non-executive directors.

 

 

 

 

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Entity-specific value

Entity-specific value is the present value of the cash flows an entity expects to arise from the continuing use of an asset and from its disposal at the end of its useful life or expects to incur when settling a liability.

 

 

 

 

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Entry price

The price paid to acquire an asset or received to assume a liability in an exchange transaction.

 

 

 

 

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Equity

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

 

 

 

 

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Equity instrument

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

 

 

 

 

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Equity instrument granted

The right (conditional or unconditional) to an equity instrument of the entity conferred by the entity on another party, under a share-based payment arrangement.

 

 

 

 

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Equity interests

For the purposes of this IFRS (editor: IFRS 3), equity interests is used broadly to mean ownership interests of investor‑owned entities and owner, member or participant interests of mutual entities.

 

 

 

 

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Equity method

The equity method is a method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets. The investor’s profit or loss includes its share of the investee’s profit or loss and the investor’s other comprehensive income includes its share of the investee’s other comprehensive income.

 

 

 

 

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Equity-settled share-based payment transaction

A share-based payment transaction in which the entity

  1. receives goods or services as consideration for its own equity instruments (including shares or share options), or
  2. receives goods or services but has no obligation to settle the transaction with the supplier.

 

 

 

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Events after the reporting period

Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue. Two types of events can be identified:

  1. those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period); and
  2. those that are indicative of conditions that arose after the reporting period (non-adjusting events after the reporting period).

 

 

 

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Exchange difference

Exchange difference is the difference resulting from translating a given number of units of one currency into another currency at different exchange rates.

 

 

 

 

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Exit price

The price that would be received to sell an asset or paid to transfer a liability.

 

 

 

 

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Expected cash flow

The probability‑weighted average (ie mean of the distribution) of possible future cash flows.

 

 

 

 

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Expenses

Expenses are decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claims.

 

 

 

 

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Experience adjustment

A difference between:

  1. for premium receipts (and any related cash flows such as insurance acquisition cash flows and insurance premium taxes)—the estimate at the beginning of the period of the amounts expected in the period and the actual cash flows in the period; or
  2. for insurance service expenses (excluding insurance acquisition expenses)—the estimate at the beginning of the period of the amounts expected to be incurred in the period and the actual amounts incurred in the period.

 

 

 

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Exploration and evaluation expenditures

Expenditures incurred by an entity in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.

 

 

 

 

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Exploration for and evaluation of mineral resources

The search for mineral resources, including minerals, oil, natural gas and similar non-regenerative resources after the entity has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resource.

 

 

 

 

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