IFRS Jargon

Last update 31/08/2019 An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets can be grouped into three broad categories — rights, relationships and intellectual property: Rights. Leases, distribution agreements, employment contracts, covenants, financing arrangements, supply contracts, licences, certifications, franchises. Relationships. Trained and assembled  workforce, customer and distribution relationships. Intellectual property. Patents; copyrights; trademarks; … Read more

Last update 06/12/2019 Insurance contracts definitions – Here are some of the IFRS 17 Insurance contracts Appendix A definitions. Other not listed here are directly available on IFRS Jargon. Coverage period –  The period during which the entity provides coverage for insured events. This period includes the coverage that relates to all premiums within the … Read more

Last update 17/12/2019 Insurance contracts acquired in the run-off period – An otherwise solvent insurer determines that it wishes to exit from a particular class of insurance contracts, but wishes to continue underwriting in other classes. This could be the result of strategic considerations, lack of profitability in the to be discontinued class, or a … Read more

Last update 06/01/2020 [IFRS 17] Insurance contract – A contract under which one party (the issuer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. Further explanation: The assessment of whether the insurance risk is ‘significant’ … Read more

Last update 28/12/2019 Individual or collective assessment for impairment – An entity should normally identify significant increases in credit risk and recognise lifetime Expected Credit Losses (ECL) before default occurs or the financial asset becomes credit-impaired, either on an individual or collective basis. Individual or collective assessment for impairment It may not be practical to … Read more

Last update 13/12/2019 Indemnification assets – Dictionary meaning of Indemnification is ‘indemnification is the part of an agreement that provides for one party to bear the monetary costs, either directly or by reimbursement, for losses incurred by a second party’. Indemnification of an asset essentially provides kind of guarantee to the other party about the … Read more

Last update 04/01/2020 Income tax – by law, but with a lot of different perks dependent on the country one pays its taxes, businesses and individuals must file federal and state income tax returns every year to determine whether they owe taxes. Its two basic types are: Personal income tax, levied on incomes of individuals, … Read more

Last update 10/12/2019 In an active market (not inactive markets), transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. [IFRS 13 Definition] Inactive markets An orderly transaction assumes exposure to the market for a period before the measurement date to allow for marketing … Read more

Last update 09/12/2019 Lease payments include any in-substance fixed lease payments. In-substance fixed lease payments are payments that may, in form, contain variability but that, in substance, are unavoidable. In-substance fixed lease payments exist, for example, if: payments are structured as variable lease payments, but there is no genuine variability in those payments. Those payments … Read more

Last update 17/08/2019 It is impracticable to apply a requirement if the entity cannot apply it after making every reasonable effort to do so. ‘Impracticable’ is a high hurdle. What constitutes undue cost or effort is a matter of judgement. In short: IFRS definition IAS 8: Applying a requirement is impracticable when the entity cannot … Read more