IFRS Jargon

Last update 07/01/2020 Outcome uncertainty is uncertainty about the amount or timing of any inflow or outflow of economic benefits that will ultimately result from an asset or liability. It is different from measurement uncertainty and existence uncertainty. Outcome uncertainty “Uncertainty” in accounting refers to the difficulty of predicting outcomes because of limited or inexact … Read more

Last update 25/08/2019 Other comprehensive income comprises items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other IFRSs. IFRS in respect of the classification of gains or losses in other comprehensive income or profit or loss/profit and loss is directed by the notion … Read more

Last update 29/11/2019 Other business models are the business model you arrive at when a financial asset and its handling in a business does to lead to the ‘hold to collect’ or ‘hold to collect and sell’ business models. Financial assets are measured at fair value through profit or loss if they are not held … Read more

Last update 05/01/2020 IFRS 13 Definition of orderly transaction: A transaction that assumes exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction (eg a forced liquidation or distress sale). A transaction that … Read more

Last update 20/12/2019 Allocation of the transaction price to an option to renew a contract (application of IFRS 15) Cloud Co. enters into a contract with a customer for a licence of its software and a non-cancellable one-year subscription to access the licensed application (the cloud services). The contract amount for the software licence is … Read more

Last update 20/12/2019 Option for discounted software – A customer receives a discount for purchasing a bundle of goods or services if the sum of the stand-alone selling prices of those promised goods or services in the contract exceeds the promised consideration in a contract. Except when an entity has observable evidence in accordance with … Read more

Last update 06/01/2020 IFRS 8 Definition: An operating segment is a component of an entity: that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and … Read more

Last update 01/09/2019 A contract for the exchange of assets or services in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits or service potential expected to be received under it. So these a loss-making contracts. Such a contract can represent a main financial burden for an entity. Here … Read more

Last update 07/01/2020 Offsetting – Identifying, recognising and measuring both an asset and a liability as separate units of account, but presenting them in the statement of financial position as a single net amount. Offsetting, otherwise known as netting, takes place when entities present their rights and obligations to each other as a net amount … Read more

Last update 21/08/2019 An obligating event is an event that creates a legal or constructive obligation that results in an entity having no realistic alternative to settling that obligation. A legal obligation is an obligation that derives from: a contract (through its explicit or implicit terms); legislation; or other operation of law. A constructive obligation … Read more