IFRS Jargon

Last update 22/08/2019 The process of capturing, for inclusion in the statement of financial position or the statement(s) of financial performance, an item that meets the definition of an element. It involves depicting the item (either alone or as part of a line item) in words and by a monetary amount, and including that amount in totals in the relevant statement. … Read more

Last update 09/12/2019 Reclassification of financial assets – This section looks at the circumstances in which financial assets are reclassified, and their measurement on reclassification. Financial liabilities cannot be reclassified. [IFRS 9 4.4.2] Reclassification of financial assets – requirements Under IFRS 9, reclassification of financial assets is required if, and only if, the objective of … Read more

Last update 22/08/2019 Reclassification adjustments are amounts reclassified to profit or loss in the current period that were recognised in other comprehensive income in the current or previous periods.[IAS 1 92] The following reporting lines are items included in Other comprehensive income, the reclassification adjustments are marked.   IFRS link Financial reporting line IAS 1 … Read more

Last update 22/08/2019 IFRS 9 contains a rebuttable presumption that credit risk has increased significantly when contractual payments are more than 30 days past due. This means that when payments are 30 days past due, the financial asset is considered to have moved from Stage 1 to Stage 2, and lifetime expected credit losses are … Read more

Last update 21/08/2019 The realisation principle is the concept that revenue can only be recognised once the underlying goods or services associated with the revenue have been delivered or rendered, respectively. Thus, revenue can only be recognised after it has been earned. The best way to understand the realisation principle is through the following examples: Advance payment … Read more

Last update 07/01/2020 In full: Qualitative characteristic of useful financial information A characteristic that makes financial information useful to the primary users of general purpose financial reports. Qualitative characteristic In the Conceptual; Framework further guidance is provided – If financial information is to be useful, it must be relevant and faithfully represent what it purports to represent. … Read more

Last update 11/12/2019 Qualifying for Hedge Accounting – Before being able to qualify for hedge accounting it has to be determined whether a hedge relationship is eligible. This means: The hedging relationship should consist only of eligible hedging instruments and hedged items. There are changes to what is eligible for both hedged items and hedging … Read more

Last update 21/08/2019 A puttable instrument is a financial instrument that gives the holder the right to put the instrument back to the issuer for cash or another financial asset or is automatically put back to the issuer on the occurrence of an uncertain future event or the death or retirement of the instrument holder. It should be noted … Read more

Last update 04/01/2020 Purpose of related party disclosures – Related party relationships are a normal feature of commerce and business. For example, entities frequently carry on parts of their activities through subsidiaries, joint ventures and associates. In those circumstances, the entity has the ability to affect the financial and operating policies of the investee through … Read more

Last update 21/08/2019 Purchased or originated financial asset(s) that are credit-impaired on initial recognition. For purchased or originated credit-impaired financial assets it is clear for the owner that the value of these financial assets is lower than their nominal or initial value.  Also it was clear the interest revenue is not the full interest promoted at … Read more