IFRS Jargon

Last update 06/01/2020 Valuation techniques Market approach – when valuing a company as a going concern there are three main valuation methods used by industry practitioners: the cost approach, the market approach and the income approach.  These are the most common methods of valuation used in investment banking, equity research, private equity, corporate development, mergers & … Read more

Last update 05/01/2020 Valuation techniques Income approach – When valuing a company as a going concern there are three main valuation methods used by industry practitioners: the cost approach, the market approach and the income approach.  These are the most common methods of valuation used in investment banking, equity research, private equity, corporate development, mergers … Read more

Last update 06/01/2020 Valuation techniques Cost approach – When valuing a company as a going concern there are three main valuation methods used by industry practitioners: the cost approach, the market approach and the income approach.  These are the most common methods of valuation used in investment banking, equity research, private equity, corporate development, mergers & … Read more

Last update 25/08/2019 The group of rights, the group of obligations or the group of rights and obligations, to which recognition and measurement requirements are applied. But also the level at which an asset or a liability is aggregated or disaggregated in IFRS for recognition purposes based on the particular IFRS standard. Example: Y Ltd … Read more

Last update 25/08/2019 An enhancing qualitative characteristic possessed by financial information that is classified, characterised and presented clearly and concisely. The Conceptual Framework provides the following guidance [Conceptual Framework 2.34 – 2.36]: Classifying, characterising and presenting information clearly and concisely makes it understandable. Some phenomena are inherently complex and cannot be made easy to understand. Excluding information … Read more

Last update 25/08/2019 Transaction costs are of importance in IFRS because they are or are not included in the carrying value at initial recognition. The differences are as follows: Assets at amortised costs are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried … Read more

Last update 25/08/2019 Receivables are disaggregated into amounts receivable from trade customers (Trade receivables), receivables from related parties, prepayments and other amounts. (IAS 1 77, IAS 1 78(b)) Trade receivables are amounts billed by a business to its customers when it delivers goods or services to them in the ordinary course of business. These billings … Read more

Last update 25/08/2019 Trade and other payables are liabilities (in general payable short term ie within one year) showing separately amounts payable to trade suppliers, payable to related parties, deferred income and accruals (with for example corporate income tax and social securities as separate reporting lines based on local GAAP or reporting habits). A trade … Read more

Last update 25/08/2019 An enhancing qualitative characteristic possessed by information that is available to decision-makers in time to be capable of influencing their decisions. The Conceptual Framework provides the following guidance [Conceptual Framework 2.33]: Timeliness means having information available to decision-makers in time to be capable of influencing their decisions. Generally, the older the information is the … Read more

Last update 04/01/2020 Time Value of Money – it is just an IFRS sophistication of interest and discounting to present value. The concept of time value of money is best explained in a simple way: a dollar today is worth more than a dollar in the future. Imagine receiving $1,000 today and putting it in … Read more