IFRS Jargon

Last update 28/12/2019 Multi-period excess earnings method – Generally, the primary asset of a company is valued using the Multi-period excess earnings method (MPEEM), while a secondary intangible asset is valued using one of the other methods. The majority of acquired, going-concern companies own at least one asset that would be expected to be valued … Read more

Last update 04/01/2020 IFRS: Multi-employer pension plans are defined contribution plans (other than state plans) or defined benefit plans (other than state plans) that: pool the assets contributed by various entities that are not under common control; and use those assets to provide benefits to employees of more than one entity, on the basis that … Read more

Last update 05/01/2020 Most advantageous market – The market that maximises the amount that would be received to sell the asset or minimizes the amount that would be paid to transfer the liability, after taking into account transaction costs and transport costs. Principal market – The market with the greatest volume and level of activity … Read more

Last update 19/08/2019 Units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. For translation of the amounts in foreign currency to your functional currency, the standard IAS 21 states that you should re-calculate all items after initial recognition using exchange rate based … Read more

Last update 19/08/2019 The amount arising from adjusting the gross carrying amount of a financial asset/hedged item to reflect the renegotiated or modified contractual cash flows in fair value hedges. The entity recalculates the gross carrying amount of a financial asset as the present value of the estimated future cash payments or receipts through the … Read more

Last update 07/01/2020 Measurement uncertainty – Uncertainty that arises when the result of applying a measurement basis is imprecise and can be determined only with a range. Measurement uncertainty arises when a measure cannot be determined directly by observing prices in an active market and must instead be estimated. The level of measurement uncertainty associated … Read more

Last update 19/08/2019 An identified feature of an item being measured (for example, historical cost, fair value or fulfilment value). The result of measuring an asset, a liability or equity, or an item of income or expense, on a specified measurement basis. The process of quantifying, in monetary terms, information about an entity’s assets, liabilities, … Read more

Last update 06/01/2020 Matrix form of organisation – a matrix organizational structure is a company structure in which the reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy. In other words, employees have dual reporting relationships – generally to both a functional manager and a product manager. Example … Read more

Last update 19/08/2019 Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. In other words, materiality is an entity-specific aspect of relevance … Read more

Last update 05/01/2020 Market-corroborated inputs are inputs to fair value calculation models that are derived principally from or corroborated by observable market data by correlation or other means (level 2 inputs see below). By correlation or other means implies the inputs are directly or indirectly based on executable market prices, modified mathematically to pertain to … Read more