IFRS Jargon

Last update 31/12/2019 Share capital is the nominal value of the shares issued within equity of an entity. Only nominal values are debited (repayment of shares) or credited (issuance of shares), the difference with amounts subscribed is credited/debited to a separate account within equity. Share premium is the amount subscribed for share capital in excess … Read more

Last update 06/01/2020 A service concession arrangement is a binding arrangement between a grantor and an operator in which: The operator uses the service concession asset to provide a public service on behalf of the grantor for a specified period of time; and The operator is compensated for its services over the period of the … Read more

Last update 23/08/2019 The separability criterion means that an acquired intangible asset is capable of being separated or divided from the acquiree and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability. An intangible asset that the acquirer would be able to sell, license or otherwise … Read more

Last update 29/12/2019 Securitisation is a financial process by which an owner of an asset, such as a portfolio of loans, receives cash upfront in exchange for the future cash flows from the asset without selling the asset in a normal contractual sales agreement. This process entails pooling the cash flows and selling them to … Read more

Last update 04/01/2020 Sales tax and VAT Sales tax is collected by the retailer when the final sale in the supply chain is reached via a sale to the end consumer. End consumers pay the sales tax on their purchases. Businesses issue resale certificates to their sellers when buying business supplies/inputs that will be resold … Read more

Last update 20/12/2019 Right of return – IFRS 15 notes that, in some contracts, an entity may transfer control of a product to a customer, but grant the customer the right to return. In return, the customer may receive a full or partial refund of any consideration paid; a credit that can be applied against … Read more

Last update 29/12/2019 As part of IAS 16 Property, Plant and Equipment it is possible to use the revaluation model. An asset will be carried at its fair value at the revaluation date less subsequent depreciation and/or impairment. Gains/losses arising on the revaluation of an entity’s property (other than investment property) are recorded within equity … Read more

Last update 04/01/2020 The return on average capital employed (ROACE) is a ratio that reveals the profitability against the investments made in the company. The return on average capital employed is different from the return on capital employed for it counts the average of the opening and closing capital for the specific period contrasting to only the … Read more

Last update 28/12/2019 Retrospective or prospective application Retrospective application – Applying a new accounting policy to transactions, other events, and conditions as if that policy had always been applied (change in accounting policy) (IAS 8 5). OR Correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period … Read more

Last update 06/01/2020 IAS 37 Definition of Restructuring: A program that is planned and controlled by management, and materially changes either: The scope of an entity’s activities; or The manner in which those activities are carried out. Restructure costs are recognized as soon as there is a present obligation (legal or constructive) resulting from a … Read more