IFRS Jargon

Last update 29/12/2019 Commercial mortgage-backed security (CMBS) – An asset-backed security (ABS) on which payments of principal an d interest are made to the holders from revenue generated (backed) by an underlying pool of commercial mortgage loans. The underlying commercial mortgages are pledged to the holders of the securities as collateral for the payment by … Read more

Last update 11/12/2019 Combined financial statements: represents the combination of two or more legal entities or businesses that may or may not be part of the same group, but do not by themselves meet the definition of a group under IFRS 10 Consolidated Financial Statements – i.e. a parent and all of its subsidiaries. At … Read more

Last update 06/01/2020 [IFRS 8 Operating segments] The term ‘chief operating decision maker’ identifies a function, not necessarily a manager with a specific title. That function is to allocate resources to and assess the performance of the operating segments of an entity. Often the chief operating decision maker of an entity is its chief executive … Read more

Last update 23/08/2019 An adjustment of the carrying amount of an asset or a liability, or the amount of the periodic consumption of an asset, that results from the assessment of the present status of, and expected future benefits and obligations associated with, assets and liabilities. Changes in accounting estimates result from new information or … Read more

Last update 03/08/2019 A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. This definition is of importance in IAS 36 Impairment of assets: The recoverable amount is calculated at the individual asset level. However, … Read more

Last update 04/01/2020 Cash pooling arrangements – Cash pooling enables corporate groups to minimise expenditure incurred in connection with banking facilities through economies of scale. Under a cash pooling arrangement, entities within a corporate group regularly transfer their surplus cash to a single bank account (the “master account“) and, in return, may draw on the … Read more

Last update 03/08/2019 Inflows and outflows of cash and cash equivalents. Also called payments of cash and receipts of cash or cash payments and cash receipts. Cash payments (cash outflows) are among others payments to trade creditors, employees (net salary), governments (corporate tax, social securities, VAT or sales tax and/or labor tax withholdings), owners (dividends … Read more

Last update 31/12/2019 Cash flow hedge reserve – Hedge accounting can bring a number of advantages over traditional accounting methods. The core benefit is that by addressing the timings mismatch associated with standard derivative accounting, hedge accounting removes temporary volatility from the P&L. As a result, the financial statements will better reflect the company’s true … Read more

Last update 11/12/2019 The cash flow hedge is one of three hedges defined in IFRS 9, the others are the fair value hedge and the hedge of a net investment. Hedge accounting can bring a number of advantages over traditional accounting methods. The core benefit is that by addressing the timings mismatch associated with standard derivative … Read more

Last update 03/08/2019 Cash is defined as ‘Cash on hand and demand deposits’. Cash equivalents is defined as ‘Short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value’. That cash (and cash equivalents) matters makes sense: CASH IS KING is … Read more