IFRS Jargon

Last update 13/12/2019 Discount rate – As part of IFRS 13 Fair value measurement the measurement of fair value using the Discounted cash flow model has increased. One of the most influential inputs to a discounted cash flow model is the discount rate/discounting rate. A discount rate is used in different formats in different discounted … Read more

Last update 17/11/2019 Discontinued operation – IFRS 5 Definition: A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale and: Represents a separate major activity or geographical area of operations, Is part of a single coordinated plan to dispose of a separate major activity … Read more

Last update 13/12/2019 Direct participating contracts – Insurance contracts with direct participation features are insurance contracts that are substantially investment-related service contracts under which an entity promises an investment return based on underlying items.  [IFRS 17 B101] Hence, they are defined as insurance contracts for which: IFRS 17 B101 a) The contractual terms specify that … Read more

Last update 19/12/2019 IAS 33 Definition: Dilution is a reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions. IAS 33 Definition: Anti-dilution is an increase … Read more

Last update 09/12/2019 Derivative novation refers to the replacement of one party to a derivative instrument with a new party, whereby the original party transfers all rights and obligations to the latter party. In some situations, the derivative instrument that is the subject of the novation might be designated as the hedging instrument in a hedging … Read more

Last update 17/08/2019 IFRS 9 Definition: A financial instrument or other contract within the scope of IFRS 9 with all three of the following characteristics. its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other … Read more

Last update 13/12/2019 IAS 26: Defined contribution pension plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service … Read more

Last update 07/08/2019 A deferred tax liability shall be recognised when there is a taxable temporary difference between the tax base of an asset or liability and its corresponding carrying amount in the statement of financial position. This arises when the carrying amount of an asset exceeds its tax base. Consequently, the future recovery of … Read more

Last update 06/01/2020 IAS 12 Definition of deferred tax assets: The amounts of income taxes recoverable in future periods in respect of: Deductible temporary differences; The carry-forward of unused tax losses; and The carry-forward of unused tax credits. There are some key characteristics of deferred tax assets to consider. Deferred tax assets are only recognised … Read more

Last update 07/08/2019 An amount used as a surrogate for cost or depreciated cost at a given date. Subsequent depreciation or amortisation assumes that the entity had initially recognised the asset or liability at the given date and that its cost was equal to the deemed cost. To put it short – the introduction of deemed cost is … Read more