Consider relevancy and irrelevancy

5.12 Information about assets, liabilities, equity, income and expenses is relevant to users of financial statements. However, recognition of a particular asset or liability and any resulting income, expenses or changes in equity may not always provide relevant information. That may be the case if, for example:

  1. it is uncertain whether an asset or liability exists (see Existence uncertainty 5.14); or
  2. an asset or liability exists, but the probability of an inflow or outflow of economic
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Definitions of income and expenses

Income – Core definition

4.68 Income is increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims.

Expenses – Core definition

4.69 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.… Continue reading

The acquisition method

An entity shall account for each business combination by applying the acquisition method. Applying the acquisition method requires:

  1. identifying the acquirer;
  2. determining the acquisition date;
  3. recognising and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree; and
  4. recognising and measuring goodwill or a gain from a bargain purchase.

Identifying the acquirer

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Investment Property

Investment property – Introduction

16.1 Investment property applies to accounting for investments in land or buildings that meet the definition of investment property (See Definition and initial recognition of investment property – Owner and Lessee) and some property interests held by a lessee under an operating lease (see Definition and initial recognition of investment property – Lessee) that are treated like investment property. Only investment property whose fair value can be measured reliably without undue cost or effort … Continue reading

Investments in Associates – Highlights

Just as a starter, two definitions!

Associate: An entity, including an unincorporated entity such as a partnership, over which an investor has significant influence and which is neither a subsidiary nor an interest in a joint venture.

Significant influence: The investee but it is not control or joint control over those policies.… Continue reading

Disclosures in consolidated financial statements

Required disclosures in consolidated financial statements

9.23 The following disclosures shall be made in consolidated financial statements:

  1. the fact that the statements are consolidated financial statements;
  2. the basis for concluding that control exists when the parent does not own, directly or indirectly through subsidiaries, more than half of the voting power;
  3. any difference in the reporting date of the financial statements of the parent and its subsidiaries used in the preparation of the consolidated financial statements; and
  4. the nature and
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Other Financial Instrument Issues – 1

Introduction to Other Financial Instrument Issues

A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Instruments in Other Financial Instrument Issues are more complex transactions measured at fair value, with changes in fair value in profit or loss with some hedges included in other comprehensive income by the section  Conditions are met  and some equity instruments at cost less impairmentContinue reading

Basic Financial Instruments and Other Financial Instrument Issues

Basic Financial Instruments and Other Financial Instrument Issues together deal with recognising, derecognising, measuring and disclosing financial instruments (financial assets and financial liabilities). Basic Financial Instruments applies to as it says basic financial instruments and is relevant to all entities. Other Financial Instrument Issues applies to other, more complex financial instruments and transactions. If an entity enters into only basic financial instrument transactions then Other Financial Instrument Issues is not applicable. However, even entities with only basic financial instruments shall … Continue reading