IFRS Jargon

Last update 07/01/2020 Presentation and disclosure are the meta terms used to describe how information about assets, liabilities, equity, income and expenses is provided in financial statements. Presentation and disclosure have received a prominent combined place in the Conceptual Framework for Financial Reporting 2018.  After Recognition and Derecognition and Measurement it provides the end process … Read more

Last update 11/08/2019 Existing rights that give the current ability to direct the relevant activities. “Power” is defined as the investor having such rights that (s)he can direct the activities that affect the investee’s returns. In the simplest cases, such power arises from the voting rights granted by shares. A parent company exerts power when it … Read more

Last update 21/08/2019 Post-employment benefits are employee benefits (other than termination benefits and short-term employee benefits) that are payable after the completion of employment. These are retirement benefits (eg pensions and lump sum payments on retirement) and other post-employment benefits, such as post-employment life insurance and post-employment medical care. Other long-term employee benefits are employee … Read more

Last update 20/12/2019 Post-contract support services – Most arrangements involving software also include promises for the right to receive services or unspecified upgrades and enhancements (or both) after the licence period begins. Generally, these services include telephone support and correction of errors (bug fixes or debugging), as well as unspecified upgrades or enhancements. These activities … Read more

Last update 04/01/2020 A portfolio of insurance contracts are insurance contracts subject to similar risks and managed together. Level of Aggregation Entities should aggregate contracts at inception in groups for recognition, measurement, presentation, and disclosure. Groups should not be reconsidered after initial recognition. An entity should initially identify portfolios of insurance contracts. A portfolio of … Read more

Last update 21/08/2019 Period cost is any cost that cannot be capitalized as direct cost relating to inventory, property, plant and equipment or investment property. A period cost is more closely associated with the passage of time than with a transactional event. It can be capitalized as fixed production overhead and general overhead in the … Read more

Last update 06/12/2019 Performance obligation – [IFRS 15 Appendix A – Defined terms] Such an obligation is a promise in a contract with a customer to transfer to the customer either: a good or service (or a bundle of goods or services) that is distinct; or a series of distinct goods or services that are … Read more

Last update 08/12/2019 Percentage of completion method Construction – The percentage of completion method is used when the contract involves the completion of more than one act. Under the percentage of completion method, revenue is recognized proportionately with “the extent of work accomplished” by the contractor, by reference to the performance of each act (performance … Read more

Last update 21/08/2019 A financial asset is past due when a counterparty has failed to make a payment when that payment was contractually due. IFRS 9: Past due status and more than 30 days past due rebuttable presumption: This sets out a rebuttable presumption that the credit risks on a financial asset has increased significantly since … Read more

Last update 09/12/2019 Pass-through conditions – A ‘pass-through’ transfer is a transaction where an entity keeps the legal title and rights to the cash flows from a financial asset (hence condition in IFRS 9.3.2.4(a) is not met), but enters into an arrangement with a third party under which those cash flows will be passed to … Read more