Reinsurance contracts held

A reinsurance contract is an insurance contract issued by one entity (the reinsurer) to compensate another entity for claims arising from one or more insurance contracts issued by the other entity (underlying contracts).

IFRS 17 requires a reinsurance contract held to be accounted for separately from the underlying insurance contracts to which it relates. This is because an entity that holds a reinsurance contract (a cedant) does not normally have a right to reduce the amounts it owes to Continue reading

Basic Financial Instruments 4

Derecognition of a financial asset

Only derecognition of a financial assets when either

An entity shall derecognise a financial asset only when either:

  1. the contractual rights to the cash flows from the financial asset expire or are settled;
  2. the entity transfers to another party substantially all of the risks and rewards of ownership of the financial asset; or
  3. the entity, despite having retained some significant risks and rewards of ownership, has transferred control of the asset to another party and
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Basic Financial Instruments 2

Initial recognition of financial assets and liabilities

Recognition of a financial asset or a financial liability

An entity shall recognise a financial asset or a financial liability only when the entity becomes a party to the contractual provisions of the instrument.

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Measurement of Assets, Liabilities, Income and Expenses

In short an overview

Measurement is the process of determining the monetary amounts at which an entity measures assets, liabilities, income and expenses in its financial statements. Measurement involves the selection of a basis of measurement. IFRS in summary specifies which measurement basis an entity shall use for many types of assets, liabilities, income and expenses.

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Recognition of Assets, Liabilities, Income and Expenses

In short an overview

Recognition is the process of incorporating in the financial statements an item that meets the definition of an asset, liability, income or expense and satisfies the following criteria:

  1. it is probable that any future economic benefit associated with the item will flow to or from the entity, and
  2. the item has a cost or value that can be measured reliably.
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The Objective of General Purpose Financial Reporting

The Objective of General Purpose Financial Reporting is the basis of the Conceptual Framework.

In addition the 2018 revised Conceptual Framework sets out:

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