IFRS Jargon

Last update 25/08/2019 Life insurance is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policy holder). Depending on the contract, other events … Read more

Last update 18/08/2019 Liabilities (assets) for current tax comprise the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. Current tax for current and prior periods shall, to the extent unpaid, be recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the … Read more

Last update 31/12/2019 A levy is defined [in IFRIC 21 ] as an outflow of resources (embodying economic benefits) that is imposed by governments (including government agencies and similar bodies whether local, national or international) on entities in accordance with legislation (i.e., laws and/or regulations)1. Included (in scope) Excluded (out of scope)   IFRIC 21 … Read more

Last update 10/12/2019 Legally enforceable contract – A contract, under the broadest possible definition, is a legally enforceable promise. Contracts are classified in many different ways. For example, a contract may be unilateral (a promise by one party to another) or bi- or multilateral (a set of complementary promises made by and between more than … Read more

Last update 06/01/2020 Leases explained along defined terms to obtain a quick overview. An overview is provided here. Definitions from IFRS 16 Leases are: IFRS 16 Leases: A contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. Lease … Read more

Last update 10/12/2019 Land easements or rights of way are rights to use, access or cross another entity’s land for a specified purpose. For example, a land easement might be obtained for the right to construct and operate a pipeline or other assets (e.g., railway line, utility pipes or telecommunication lines) over, under or through … Read more

Last update 09/12/2019 Key Performance Indicators (KPIs) are the critical (key) indicators of progress toward an intended result. KPIs provides a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most. As Peter Drucker famously said, ‘What gets measured gets done’. Managing with the … Read more

Last update 19/11/2019 Key management personnel is one of the related parties. Related parties are relationships in which one party has the ability to control or significantly influence the economic and operating decisions of another. Transactions with related parties are a common feature of business. Key management personnel (KMP) is defined in IAS 24 Related … Read more

Last update 05/01/2020 Jointly Sponsored Pension Plans A jointly sponsored pension plan is a defined-benefit plan in which an employer shares risks and rewards in the plan equally with the plan members, who are current employees and retirees. Since there are usually many individual plan members, an organization is typically formed to represent all of … Read more

Last update 27/12/2019 Joint control starts with the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. In assessing whether an entity has joint control of an arrangement, an entity shall assess first whether all the parties, or … Read more