PFRS Glossary of Terms.txt

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PFRS Glossary of Terms.txt
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  1. accounting policies
    The specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements [IAS 8, 5]
  2. accounting profit
    Profit or loss for a period before deducting tax expense [IAS 12.5]
  3. accrual basis of accounting
    The effects of transactions and other events are recognized when they occur (and not as cash or its equivalent is received or paid) and they are recorded in the accounting records and reported in the financial statements of the periods to which they relate
  4. accumulating compensated absences
    Compensated absences that are carried forward and can be used in future periods if the current period�s entitlement is not used in full.
  5. acquiree
    The business or businesses that the acquirer obtains control of in a business combination. [IFRS 3.A]
  6. acquirer
    The entity that obtains control of the acquiree [IFRS 3.A]
  7. acquisition date
    The date on which the acquirer obtains control of the acquiree. [IFRS 3.A]
  8. active market
    A market in which all the following conditions exist:(a) the items traded within the market are homogeneous (b) willing buyers and sellers can normally be found at any time and (c) prices are available to the public.
  9. active market
    A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm�s length basis. [IAS 39.AG71]
  10. actuarial assumptions
    An entity�s unbiased and mutually compatible best estimates of the demographic and financial variables that will determine the ultimate cost of providing post-employment benefits. [IAS 19.72�73]
  11. actuarial gains and losses
    (a) Experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred)
  12. actuarial present value of promised retirement benefits
    The present value of the expected payments by a retirement benefit plan to existing and past employees, attributable to the service already rendered. [IAS 26.8]
  13. adjusting events after the reporting period
    The management by an entity of the biological transformation of biological assets for sale, into agricultural produce, or into additional biological assets.[IAS 41.5]
  14. Agricultural produce
    The harvested product of the entity�s biological assets [IAS 41.5]
  15. Amortization (depreciation)
    The systematic allocation of the depreciable amount of an asset over its useful life. [IAS 36.6, IAS 38.8]
  16. amortized cost of a financial asset or financial liability
    The amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility [IAS 39.9]
  17. antidilution
    An increase in earnings per share or a reduction 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 33.5]
  18. asset
    A resource:(a) controlled by an entity as a result of past events and (b) from which future economic benefits are expected to flow to the entity.[IAS 38.8, F.49(a)]
  19. assets held by a long-term employee benefit fund � Assets (other than non-transferable financial instruments issued by the reporting entity) that:
  20. (a) are held by an entity (a fund) that is legally separate from the reporting entity and exists solely to pay or fund employee benefits
    and
  21. (b) are available to be used only to pay or fund employee benefits, are not available to the
  22. reporting entity�s own creditors (even in bankruptcy), and cannot be returned to the
  23. reporting entity, unless either: (i) the remaining assets of the fund are sufficient to meet all the related employee benefit obligations of the plan or the
  24. reporting entity
    or (ii) the assets are returned to the reporting entity to reimburse it for employee benefits already paid.[IAS 19.7]
  25. associate
    An entity, including an unincorporated entity such as a partnership, over which the investor has significant influence and that is neither a subsidiary nor an interest in a joint venture. [IAS 28.2]
  26. available-for-sale financial assets
    Those non-derivative financial assets that are designated as available for sale or are not classified as (a) loans and receivables, (b) held-to-maturity investments, or (c) financial assets at fair value through profit or loss. [IAS 39.9]
  27. basic earnings per share
    Profit or loss attributable to ordinary equity holders of the parent entity (the numerator) divided by the weighted average number of ordinary shares outstanding during the period (the denominator). [IAS 33.10]
  28. biological asset
    A living animal or plant. [IAS 41.5]
  29. biological transformation
    The processes of growth, degeneration, production, and procreation that cause qualitative or quantitative changes in a biological asset. [IAS 41.5]
  30. borrowing costs
    Interest and other costs that an entity incurs in connection with the borrowing of funds. [IAS 23.5]
  31. business
    An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits directly to investors or other owners, members or participants. [IFRS 3.A]
  32. business combination
    A transaction or other event in which an acquirer obtains control of one or more businesses. Transactions sometimes referred to as �true mergers� or �mergers of equals� are also business combinations as that term is used in IFRS 3. [IFRS 3.A]
  33. capital
    Under a financial concept of capital, such as invested money or invested purchasing power, the net assets or equity of the entity. The financial concept of capital is adopted by most entities. Under a physical concept of capital, such as operating capability, the productive capacity of the entity based on, for example, units of output per day. [F.102]
  34. capitalization
    Recognizing a cost as part of the cost of an asset. IAS 23.9
  35. carrying amount
    The amount at which an asset is recognized after deducting any accumulated depreciation (amortization) and accumulated impairment losses thereon. [IAS 16.6, IAS 36.6, IAS 38.8].
  36. carrying amount
    The amount at which an asset is recognized in the statement of financial position. [IAS 40.5, IAS 41.8]
  37. cash
    Cash on hand and demand deposits. [IAS 7.6]
  38. cash equivalents
    Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. [IAS 7.6]
  39. cash flows
    Inflows and outflows of cash and cash equivalents. [IAS 7.6] cash-generating unit � 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. [IAS 36.6, IFRS 5.A]
  40. cash-settled share-based payment transaction
    A share-based payment transaction in which the entity acquires goods or services by incurring a liability to transfer cash or other assets to the supplier of those goods or services for amounts that are based on the price (or value) of the entity�s shares or other equity instruments of the entity. [IFRS 2.A]
  41. cedant
    The policyholder under a reinsurance contract. [IFRS 4.A]
  42. change in accounting estimate
    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 new developments and, accordingly, are not corrections of errors. [IAS 8.5].
  43. class of assets
    A grouping of assets of a similar nature and use in an entity�s operations. [IAS 16.37, IAS 36.127, IAS 38.119].
  44. class of financial instruments
    Grouping of financial instruments that is appropriate to the nature of the information disclosed and that takes into account the characteristics of those financial instruments. [IFRS 7.6].
  45. close members of the family of an individual
    Those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity. They may include:(a) the individual�s domestic partner and children (b) children of the individual�s domestic partner (c) dependants of the individual or the individual�s domestic partner.[IAS 24.9]
  46. closing rate
    he spot exchange rate at the end of the reporting period. [IAS 21.8]
  47. commencement of the lease term
    The date from which the lessee is entitled to exercise its right to use the leased asset. It is the date of initial recognition of the lease (ie the recognition of the assets, liabilities, income or expenses resulting from the lease, as appropriate). [IAS 17.4]
  48. compensation
    Includes all employee benefits (as defined in IAS 19) including employee benefits to which IFRS 2 applies. Employee benefits are all forms of consideration paid, payable or provided by the entity, or on behalf of the entity, in exchange for services rendered to the entity. It also includes such consideration paid on behalf of a parent of the entity in respect of the entity. This includes:(a) short-term employee benefits, such as wages, salaries and social security contributions, paid annual leave and paid sick leave, profit-sharing and bonuses (if payable within twelve months of the end of the period) and non-monetary benefits (such as medical care, housing, cars and free or subsidized goods or services) for current employees (b) post-employment benefits such as pensions, other retirement benefits, post employment life insurance and post-employment medical care
  49. component of an entity
    Operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. [IFRS 5.A]
  50. compound financial instrument
    A financial instrument that, from the issuer�s perspective, contains both a liability and an equity element. [IAS 32.28�29]
  51. consolidated financial statements
    The financial statements of a group presented asthose of a single economic entity. [IAS 27.4, IAS 28.2]
  52. construction contract
    A contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use. [IAS 11.3]
  53. constructive obligation
    An obligation that derives from an entity�s actions where:(a) by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities
  54. derivative
    A financial instrument or other contract within the scope of IAS 39 (see paragraphs 2�7) with all three of the following characteristics:(a) 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 variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the �underlying�) (b) it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors and (c) it is settled at a future date.[IAS 39.9]
  55. derivative financial instruments
    Financial instruments such as financial options, futures and forwards, interest rate swaps and currency swaps, which create rights and obligations that have the effect of transferring between the parties to the instrument one or more of the financial risks inherent in an underlying primary financial instrument. On inception, derivative financial instruments give one party a contractual right to exchange financial assets or financial liabilities with another party under conditions that are potentially favorable, or a contractual obligation to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavorable. However, they generally do not result in a transfer of the underlying primary financial instrument on inception of the contract, nor does such a transfer necessarily take place on maturity of the contract. Some instruments embody both a right and an obligation to make an exchange. Because the terms of the exchange are determined on inception of the derivative instrument, as prices in financial markets change those terms may become either favorable or unfavorable. [IAS 32]
  56. development
    The application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production or use. [IAS 38.8]
  57. diluted earnings per share
    Profit or loss attributable to ordinary equity holders of the parent entity (the numerator), divided by the weighted average number of ordinary shares outstanding during the period (the denominator), both adjusted for the effects of all dilutive potential ordinary shares. [IAS 33.31]
  58. dilution
    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 33.5]
  59. dilutive potential ordinary shares
    Potential ordinary shares whose conversion to ordinary shares would decrease earnings per share or increase loss per share from continuing operations.[IAS 33.41]
  60. direct insurance contract
    An insurance contract that is not a reinsurance contract. [IFRS 4.A]
  61. direct method of reporting cash flows from operating activities
    A method whereby major classes of gross cash receipts and gross cash payments are disclosed. [IAS 7.18(a)]
  62. discontinued operation
    A component of an entity that either has been disposed of or is classified as held for sale and:(a) represents a separate major line of business or geographical area of operations,(b) is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations or(c) is a subsidiary acquired exclusively with a view to resale.[IFRS 5.A]
  63. discretionary participation feature
    A contractual right to receive, as a supplement to guaranteed benefits, additional benefits:(a) that are likely to be a significant portion of the total contractual benefits (b) whose amount or timing is contractually at the discretion of the issuer
  64. disposal group
    A group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred in the transaction. The group includes goodwill acquired in a business combination if the group is a cash-generating unit to which goodwill has been allocated in accordance with the requirements of paragraphs 80�87 of IAS 36 or if it is an operation within such a cash-generating unit. [IFRS 5.A]
  65. dividends
    Distributions of profits to holders of equity investments in proportion to their holdings of a particular class of capital. [IAS 18.5]
  66. economic life � Either:(a) the period over which an asset is expected to be economically usable by one or more users(b) the number of production or similar units expected to be obtained from the asset by one or more users.[IAS 17.4]
  67. effective interest method
    A method of calculating the amortized cost of a financial asset or a financial liability (or group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period. [IAS 39.9]
  68. effective interest rate
    he rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, an entity shall estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment, call and similar options) but shall not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate transaction costs, and all other premiums or discounts. There is a presumption that the cash flows and the expected life of a group of similar financial instruments can be estimated reliably. However, in those rare cases when it is not possible to estimate reliably the cash flows or the expected life of a financial instrument (or group of financial instruments), the entity shall use the contractual cash flows over the full contractual term of the financial instrument (or group of financial instruments). [IAS 39.9]
  69. embedded derivative
    A component of a hybrid (combined) instrument that also includes a non-derivative host contract�with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative. An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. A derivative that is attached to a financial instrument but is contractually transferable independently of that instrument, or has a different counterparty from that instrument, is not an embedded derivative, but a separate financial instrument. [IAS 39.10]
  70. employee benefits
    All forms of consideration given by an entity in exchange for service rendered by employees. [IAS 19.7]
  71. employees and others providing similar services
    Individuals who render personal services to the entity and either: (a) the individuals are regarded as employees for legal or tax purposes (b) the individuals work for the entity under its direction in the same way as individuals who are regarded as employees for legal or tax purposes or (c) the services rendered are similar to those rendered by employees. For example, the term encompasses all management personnel, ie those persons having authority and responsibility for planning, directing and controlling the activities of the entity, including non-executive directors.[IFRS 2.A]
  72. entity-specific value
    The present value of the cash flows an entity expects to arise from the continuing use of an asset and from its disposal at the end of its useful life or expects to incur when settling a liability. [IAS 16.6, IAS 38.8]
  73. equity
    The residual interest in the assets of the entity after deducting all its liabilities.[F.49(c)]
  74. equity instrument
    A contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. [IAS 32.11, IFRS 2.A]
  75. equity instrument granted
    The right (conditional or unconditional) to an equity instrument of the entity conferred by the entity on another party, under a share-based payment arrangement. [IFRS 2.A]
  76. equity interests
    In IFRS 3 is used broadly to mean ownership interests of investor owned entities and owner, member or participant interests of mutual entities.[IFRS 3.A]
  77. equity method
    A method of accounting whereby the investment is initially recognized at cost and adjusted thereafter for the post-acquisition change in the investor�s share of net assets of the investee. The profit or loss of the investor includes the investor�s share of the profit or loss of the investee. [IAS 28.2]
  78. equity-settled share-based payment transaction
    A share-based payment transaction in which the entity receives goods or services as consideration for equity instruments of the entity (including shares or share options). [IFRS 2.A]
  79. events after the reporting period
    Those events, favorable and unfavorable, that occur between the end of the reporting period and the date when the financial statements are authorized for issue. Two types of events can be identified: (a) those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period) and (b) those that are indicative of conditions that arose after the reporting period (non-adjusting events after the reporting period).[IAS 10.3]
  80. exchange difference
    The difference resulting from translating a given number of units of one currency into another currency at different exchange rates. [IAS 21.8]
  81. exchange rate
    The ratio of exchange for two currencies. [IAS 21.8]
  82. expenses
    Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants. [F.70(b)]
  83. experience adjustments
    The effects of differences between previous actuarial assumptions and what has actually occurred. [IAS 19.7]
  84. exploration and evaluation assets
    Exploration and evaluation expenditures recognized as assets in accordance with the entity�s accounting policy. [IFRS 6.A]
  85. exploration and evaluation expenditures
    Expenditures incurred by an entity in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. [IFRS 6.A]
  86. exploration for and evaluation of mineral resources
    The search for mineral resources, including minerals, oil, natural gas and similar non-regenerative resources after the entity has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resource. [IFRS 6.A]
  87. fair value � The amount for which an asset could be exchanged, a liability settled, or an equity instrument granted could be exchanged, between knowledgeable, willing parties in an arm�s length transaction. [IFRS 2.A]
  88. fair value less costs to sell
    The amount obtainable from the sale of an asset or cash generating unit in an arm�s length transaction between knowledgeable, willing parties, less the costs of disposal. [IAS 36.6]
  89. FIFO (first-in, first-out)
    The assumption that the items of inventory that were purchased or produced first are sold first, and consequently the items remaining in inventory at the end of the period are those most recently purchased or produced. [IAS 2.27]
  90. finance lease
    A lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred. [IAS 17.4]
  91. financial asset
    Any asset that is:
  92. (a) cash
  93. (b) an equity instrument of another entity
    (c) a contractual right: (i) to receive cash or another financial asset from another entity or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the entity
  94. financial asset or financial liability at fair value through profit or loss � A financial asset or financial liability that meets either of the following conditions:
  95. (a) It is classified as held for trading. A financial asset or financial liability is classified as held for trading if it is: (i) acquired or incurred principally for the purpose of selling or repurchasing it in the near term
    (ii) part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking
  96. (b) Upon initial recognition it is designated by the entity as at fair value through profit or loss. An entity may use this designation only when permitted by IAS 39 paragraph 11A (embedded derivatives) or when doing so results in more relevant information, because either: (i) it eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as �an accounting mismatch�) that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases
    or (ii) a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the entity�s key management personnel (as defined in IAS 24).
  97. [IAS 39.9]
  98. financial guarantee contract
    A contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. [IAS 39.9, IFRS 4.A]
  99. financial instrument
    Any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. [IAS 32.11]
  100. financial liability
    Any liability that is:(a) a contractual obligation: (i) to deliver cash or another financial asset to another entity or (ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the entity
  101. financial position
    The relationship of the assets, liabilities and equity of an entity, as reported in the balance sheet [statement of financial position]. [F.47, IAS 1.54]
  102. financial risk
    The risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract. [IFRS 4.A]
  103. financing activities
    Activities that result in changes in the size and composition of the contributed equity and borrowings of the entity. [IAS 7.6]
  104. firm commitment
    A binding agreement for the exchange of a specified quantity of resources at a specified price on a specified future date or dates. [IAS 39.9]
  105. firm purchase commitment
    An agreement with an unrelated party, binding on both parties and usually legally enforceable, that (a) specifies all significant terms, including the price and timing of the transactions, and (b) includes a disincentive for non-performance that is sufficiently large to make performance highly probable. [IFRS 5.A]
  106. first IFRS financial statements
    The first annual financial statements in which an entity adopts International Financial Reporting Standards (IFRSs), by an explicit and unreserved statement of compliance with IFRSs. [IFRS 1.A]
  107. first IFRS reporting period
    The latest reporting period covered by an entity�s first IFRS financial statements. [IFRS 1.A]
  108. first-time adopter
    An entity that presents its first IFRS financial statements. [IFRS 1.A]
  109. fixed price contract
    A construction contract in which the contractor agrees to a fixed contract price, or a fixed rate per unit of output, which in some cases is subject to cost escalation clauses. [IAS 11.3]
  110. fixed production overheads
    Those indirect costs of production that remain relatively constant regardless of the volume of production, such as depreciation and maintenance of factory buildings and equipment, and the cost of factory management and administration. [IAS 2.12].
  111. forecast transaction
    An uncommitted but anticipated future transaction. [IAS 39.9]
  112. foreign currency
    A currency other than the functional currency of the entity. [IAS 21.8]
  113. foreign currency transaction
    A transaction that is denominated in or requires settlement in a foreign currency. [IAS 21.20]
  114. foreign operation
    An entity that is a subsidiary, associate, joint venture or branch of the reporting entity, the activities of which are based or conducted in a country or currency other than those of the reporting entity. [IAS 21.8]
  115. forgivable loans
    Loans which the lender undertakes to waive repayment of under certain prescribed conditions. [IAS 20.3]
  116. functional currency
    The currency of the primary economic environment in which the entity operates. [IAS 21.8]
  117. funding (of post-employment benefits)
    Contributions by an entity, and sometimes its employees, into an entity, or fund, that is legally separate from the reporting entity and from which the employee benefits are paid. [IAS 19.49]
  118. funding (of retirement benefits)
    The transfer of assets to an entity (the fund) separate from the employer�s entity to meet future obligations for the payment of retirement benefits. [IAS 26.8]
  119. future economic benefit
    The potential to contribute, directly or indirectly, to the flow of cash and cash equivalents to the entity. The potential may be a productive one that is part of the operating activities of the entity. It may also take the form of convertibility into cash or cash equivalents or a capability to reduce cash outflows, such as when an alternative manufacturing process lowers the costs of production. [F.53]
  120. gains
    Increases in economic benefits and as such no different in nature from revenue.
  121. [F.75]
  122. general purpose financial statements
    Financial statements that are intended to meet the needs of users who are not in a position to require an entity to prepare reports tailored to their particular information needs. [IAS 1.7, F.6]
  123. going concern
    The financial statements are prepared on a going concern basis unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative but to do so. [IAS 1.25, (F.23)]
  124. goodwill
    An asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. [IFRS 3.A]
  125. government
    Government, government agencies and similar bodies whether local, national or international. [IAS 20.3]
  126. government assistance
    Action by government designed to provide an economic benefit specific to an entity or range of entities qualifying under certain criteria. [IAS 20.3]
  127. government grants
    Assistance by government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operating activities of the entity. They exclude those forms of government assistance which cannot reasonably have a value placed upon them and transactions with government which cannot be distinguished from the normal trading transactions of the entity. [IAS 20.3]
  128. grant date
    The date at which the entity and another party (including an employee) agree to a share-based payment arrangement, being when the entity and the counterparty have a shared understanding of the terms and conditions of the arrangement. At grant date the entity confers on the counterparty the right to cash, other assets, or equity instruments of the entity, provided the specified vesting conditions, if any, are met. If that agreement is subject to an approval process (for example, by shareholders), grant date is the date when that approval is obtained. [IFRS 2.A]
  129. grants related to assets
    Government grants whose primary condition is that an entity qualifying for them should purchase, construct or otherwise acquire long-term assets. Subsidiary conditions may also be attached restricting the type or location of the assets or the periods during which they are to be acquired or held. [IAS 20.3]
  130. grants related to income
    Government grants other than those related to assets. [IAS 20.3]
  131. gross investment in the lease
    The aggregate of:(a) the minimum lease payments receivable by the lessor under a finance lease, and(b) any unguaranteed residual value accruing to the lessor.[IAS 17.4]
  132. group
    A parent and all its subsidiaries. [IAS 21.8, IAS 27.4]
  133. group administration (employee benefit) plans
    An aggregation of single employer plans combined to allow participating employers to pool their assets for investment purposes and reduce investment management and administration costs, but the claims of different employers are segregated for the sole benefit of their own employees. [IAS 19.33]
  134. group of biological assets
    An aggregation of similar living animals or plants. [IAS 41.5]
  135. guaranteed benefits
    Payments or other benefits to which a particular policyholder or investor has an unconditional right that is not subject to the contractual discretion of the issuer. [IFRS 4.A].
  136. guaranteed element
    An obligation to pay guaranteed benefits, included in a contract that contains a discretionary participation feature. [IFRS 4.A]
  137. guaranteed residual value
    (a) For a lessee, that part of the residual value that is guaranteed by the lessee or by a party related to the lessee (the amount of the guarantee being the maximum amount that could, in any event, become payable)
  138. harvest
    The detachment of produce from a biological asset or the cessation of a biological asset�s life processes. [IAS 41.5]
  139. hedge effectiveness
    The degree to which changes in the fair value or cash flows of the hedged item that are attributable to a hedged risk are offset by changes in the fair value or cash flows of the hedging instrument (see IAS 39 paragraphs AG105�AG113). [IAS 39.9]
  140. hedged item
    An asset, liability, firm commitment, highly probable forecast transaction or net investment in a foreign operation that (a) exposes the entity to risk of changes in fair value or future cash flows and (b) is designated as being hedged (IAS 39 paragraphs 78�84 and AG98�AG101 elaborate on the definition of hedged items). [IAS 39.9]
  141. hedging instrument
    A designated derivative or (for a hedge of the risk of changes in foreign currency exchange rates only) a designated non-derivative financial asset or non-derivative financial liability whose fair value or cash flows are expected to offset changes in the fair value or cash flows of a designated hedged item (IAS 39 paragraphs 72�77 and AG94�AG97 elaborate on the definition of a hedging instrument). [IAS 39.9]
  142. held-to-maturity investments
    Non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity (see IAS 39 paragraphs AG16�AG25) other than:
  143. (a) those that the entity upon initial recognition designates as at fair value through profit or loss
  144. (b) those that the entity designates as available for sale
    and
  145. (c) those that meet the definition of loans and receivables.
  146. An entity shall not classify any financial assets as held to maturity if the entity has, during the current financial year or during the two preceding financial years, sold or reclassified more than an insignificant amount of held-to-maturity investments before maturity (more than insignificant in relation to the total amount of held-to-maturity investments) other than sales or reclassifications that:
  147. (i) are so close to maturity or the financial asset�s call date (for example, less than three months before maturity) that changes in the market rate of interest would not have a significant effect on the financial asset�s fair value
  148. (ii) occur after the entity has collected substantially all of the financial asset�s original principal through scheduled payments or prepayments
    or
  149. (iii) are attributable to an isolated event that is beyond the entity�s control, is non-recurring and could not have been reasonably anticipated by the entity.
  150. [IAS 39.9]
  151. highly probable
    Significantly more likely than probable. IFRS 5.A
  152. hire purchase contract
    The definition of a lease includes contracts for the hire of an asset that contain a provision giving the hirer an option to acquire title to the asset upon the fulfilment of agreed conditions. These contracts are sometimes known as hire purchase contracts. [IAS 17.6]
  153. historical cost
    A measurement basis according to which assets are recorded at the amount of cash or cash equivalents paid or the fair value of the consideration given to acquire them at the time of their acquisition. Liabilities are recorded at the amount of proceeds received in exchange for the obligation, or in some circumstances (for example, income taxes), at the amounts of cash or cash equivalents expected to be paid to satisfy the liability in the normal course of business. [F.100(a)]
  154. hyperinflation
    Loss of purchasing power of money at such a rate that comparison of amounts from transactions and other events that have occurred at different times, even within the same accounting period, is misleading. Hyperinflation is indicated by characteristics of the economic environment of a country which include, but are not limited to, the following:(a) the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power.(b) the general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency.(c) sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short.(d) interest rates, wages and prices are linked to a price index.(e) the cumulative inflation rate over threeyears is approaching, or exceeds, 100%.[IAS 29.2�3]
  155. identifiable
    An asset is identifiable if it either:(a) is separable, ie capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless of whether the entity intends to do so
  156. impairment loss
    The amount by which the carrying amount of an asset exceeds its recoverable amount. [IAS 16.6, (IAS 36.6), IAS 38.8]
  157. impracticable
    Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. [IAS 1.7, (IAS 8.5)
  158. imputed rate of interest
    The more clearly determinable of either:(a) the prevailing rate for a similar instrument of an issuer with a similar credit rating or(b) a rate of interest that discounts the nominal amount of the instrument to the current cash sales price of the goods or services.[IAS 18.11]
  159. inception of a lease
    The earlier of the date of the lease agreement and the date of commitment by the parties to the principal provisions of the lease. [IAS 17.4]
  160. income
    Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. [F.70(a)]
  161. incremental borrowing rate of interest (lessee�s)
    The rate of interest the lessee would have to pay on a similar lease or, if that is not determinable, the rate that, at the inception of the lease, the lessee would incur to borrow over a similar term, and with a similar security, the funds necessary to purchase the asset. [IAS 17.4]
  162. indirect method of reporting cash flows from operating activities
    A method whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows. [IAS 7.18(b)]
  163. initial direct costs
    Incremental costs that are directly attributable to negotiating and arranging a lease, except for such costs incurred by manufacturer or dealer lessors. [IAS 17.4]
  164. insurance asset
    An insurer�s net contractual rights under an insurance contract. [IFRS 4.A]
  165. insurance contract
    A contract under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. (See IFRS 4 Appendix B for guidance on this definition.) [IFRS 4.A]
  166. insurance liability
    An insurer�s net contractual obligations under an insurance contract. [IFRS 4.A]
  167. insurance risk
    Risk, other than financial risk, transferred from the holder of a contract to the issuer. [IFRS 4.A]
  168. insured event
    An uncertain future event that is covered by an insurance contract and creates insurance risk. [IFRS 4.A]
  169. insurer
    The party that has an obligation under an insurance contract to compensate a policyholder if an insured event occurs. [IFRS 4.A]
  170. intangible asset
    An identifiable non-monetary asset without physical substance. [IAS 38.8, IFRS 3.A]
  171. interest cost (for an employee benefit plan)
    The increase during a period in the present value of a defined benefit obligation which arises because the benefits are one period closer to settlement. [IAS 19.7]
  172. interest rate implicit in the lease
    The discount rate that, at the inception of the lease, causes the aggregate present value of (a) the minimum lease payments and (b) the unguaranteed residual value to be equal to the sum of (i) the fair value of the leased asset and (ii) any initial direct costs of the lessor. [IAS 17.4]
  173. interest rate risk
    The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. [IFRS 7.A]
  174. interim financial report
    A financial report containing either a complete set of financial statements (as described in IAS 1) or a set of condensed financial statements (as described in IAS 34) for an interim period. [IAS 34.4].
  175. interim period
    A financial reporting period shorter than a full financial year. [IAS 34.4]
  176. International Financial Reporting Standards (IFRSs)
    Standards and Interpretations adopted by the International Accounting Standards Board (IASB). They comprise:(a) International Financial Reporting Standards(b) International Accounting Standards and(c) Interpretations developed by the International
  177. Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC). [IAS 1.7, IAS 8.5, IFRS 1.A]
  178. intrinsic value
    The difference between the fair value of the shares to which the counterparty has the (conditional or unconditional) right to subscribe or which it has the right to receive, and the price (if any) the counterparty is (or will be) required to pay for those shares. For example, a share option with an exercise price of CU15,* on a share with a fair value of CU20, has an intrinsic value of CU5. [IFRS 2.A]
  179. inventories
    Assets:(a) held for sale in the ordinary course of business(b) in the process of production for such sale or(c) in the form of materials or supplies to be consumed in the production process or in the rendering of services.
  180. Inventories encompass goods purchased and held for resale including, for example, merchandise purchased by a retailer and held for resale, or land and other property held for resale. Inventories also encompass finished goods produced, or work in progress being produced, by the entity and include materials and supplies awaiting use in the production process. In the case of a service provider, inventories include the costs of the service, as described in IAS 2 paragraph 19, for which the entity has not yet recognized the related revenue (see IAS 18). [IAS 2.6, IAS 2.8]
  181. investing activities
    The acquisition and disposal of long-term assets and other investments not included in cash equivalents. [IAS 7.6]
  182. investment property
    Property (land or a building�or part of a building�or both) held (by the owner or by the lessee under a finance lease) to earn rentals or for capital appreciation or both, rather than for(a) use in the production or supply of goods or services or for administrative purposes or(b) sale in the ordinary course of business.[IAS 40.5]
  183. investor in a joint venture
    A party to a joint venture that does not have joint control over that joint venture. [IAS 31.3]
  184. joint control
    The contractually agreed sharing of control over an economic activity. [IAS 24.9]
  185. joint control
    The contractually agreed sharing of control over an economic activity
  186. joint venture
    A contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. [IAS 31.3, IFRS 3.A]
  187. jointly controlled entity
    A joint venture that involves the establishment of a corporation, partnership or other entity in which each venturer has an interest. The entity operates in the same way as other entities, except that a contractual arrangement between the venturers establishes joint control over the economic activity of the entity. [IAS 31.24]
  188. key management personnel
    Those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. [IAS 24.9]
  189. lease
    An agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time. [IAS 17.4]
  190. lease term
    The non-cancellable period for which the lessee has contracted to lease the asset together with any further terms for which the lessee has the option to continue to lease the asset, with or without further payment, when at the inception of the lease it is reasonably certain that the lessee will exercise the option. [IAS 17.4]
  191. legal obligation
    An obligation that derives from:(a) a contract (through its explicit or implicit terms)(b) legislation or(c) other operation of law.[IAS 37.10]
  192. lessee�s incremental borrowing rate of interest
    The rate of interest the lessee would have to pay on a similar lease or, if that is not determinable, the rate that, at the inception of the lease, the lessee would incur to borrow over a similar term, and with a similar security, the funds necessary to purchase the asset. [IAS 17.4]
  193. liability
    A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. [IAS 37.10, F.49(b)]
  194. liability adequacy test
    An assessment of whether the carrying amount of an insurance liability needs to be increased (or the carrying amount of related deferred acquisition costs or related intangible assets decreased), based on a review of future cash flows. [IFRS 4.A].
  195. liquidity
    The availability of cash in the near future after taking account of financial commitments over this period. [F.16]
  196. liquidity risk
    The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. [IFRS 7.A]
  197. loans and receivables
    Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than: (a) those that the entity intends to sell immediately or in the near term, which shall be classified as held for trading, and those that the entity upon initial recognition designates as at fair value through profit or loss (b) those that the entity upon initial recognition designates as available for sale or (c) those for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration, which shall be classified as available for sale.
  198. An interest acquired in a pool of assets that are not loans or receivables (for example, an interest in a mutual fund or a similar fund) is not a loan or receivable. [IAS 39.9]
  199. loans payable
    Financial liabilities other than short-term trade payables on normal credit terms. [IFRS 7.A]
  200. losses
    Decreases in economic benefits and as such no different in nature from other expenses. [F.79]
  201. market condition
    A condition upon which the exercise price, vesting or exercisability of an equity instrument depends that is related to the market price of the entitys equity instruments, such as attaining a specified share price or a specified amount of intrinsic value of a share option, or achieving a specified target that is based on the market price of the entity's equity instruments relative to an index of market prices of equity instruments of other entities. [IFRS 2.A]
  202. market risk
    The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. [IFRS 7.A]
  203. master netting arrangement
    An arrangement providing for an entity that undertakes a number of financial instrument transactions with a single counterparty to make a single net settlement of all financial instruments covered by the agreement in the event of default on, or termination of, any one contract. [IAS 32.50]
  204. material
    Omissions or misstatements of items are material if they could, individually or collectively, influence the economic decisions that users make on the basis of the financial statements. Materiality depends on the size and nature of the omission or misstatement judged in the surrounding circumstances. The size or nature of the item, or a combination of both, could be the determining factor. [IAS 1.7, IAS 8.5]
  205. materiality
    Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. [F.30]
  206. measurement
    The process of determining the monetary amounts at which the elements of the financial statements are to be recognized and carried in the balance sheet [statement of financial position] and income statement [statement of comprehensive income].[F.99]
  207. measurement date
    The date at which the fair value of the equity instruments granted is measured for the purposes of IFRS 2. For transactions with employees and others providing similar services, the measurement date is grant date. For transactions with parties other than employees (and those providing similar services), the measurement date is the date the entity obtains the goods or the counterparty renders service. [IFRS 2.A]
  208. minimum lease payments
    The payments over the lease term that the lessee is or can be required to make, excluding contingent rent, costs for services and taxes to be paid by and reimbursed to the lessor, together with: (a) for a lessee, any amounts guaranteed by the lessee or by a party related to the lessee or (b) for a lessor, any residual value guaranteed to the lessor by: (i) the lessee
  209. monetary assets 
    Money held and assets to be received in fixed or determinable amounts of money. [IAS 38.8]
  210. monetary items
    Units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. [IAS 21.8]
  211. monetary items
    Money held and items to be received or paid in money. [IAS 29.12]
  212. multi-employer (benefit) plans
    • Defined contribution plans (other than state plans) or defined benefit plans (other than state plans) that:
    • (a) pool the assets contributed by various entities that are not under common control and
    • (b) use those assets to provide benefits to employees of more than one entity, on the basis that contribution and benefit levels are determined without regard to the identity of the entity that employs the employees concerned. [IAS 19.7]
  213. mutual entity
    An entity, other than an investor-owned entity, that provides dividends, lower costs or other economic benefits directly to its owners, members or participants. For example, a mutual insurance company, a credit union and a co-operative entity are all mutual entities. [IFRS 3.A]
  214. net assets available for benefits
    The assets of a plan less liabilities other than the actuarial present value of promised retirement benefits. [IAS 26.8]
  215. net investment in a foreign operation
    The amount of the reporting entity�s interest in the net assets of that operation. [IAS 21.8]
  216. net investment in the lease
    The gross investment in the lease discounted at the interest rate implicit in the lease. [IAS 17.4]
  217. net realizable value
    The estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Net realizable value refers to the net amount that an entity expects to realize from the sale of inventory in the ordinary course of business. Fair value reflects the amount for which the same inventory could be exchanged between knowledgeable and willing buyers and sellers in the marketplace. The former is an entity-specific value
  218. neutrality
    Freedom from bias of the information contained in financial statements. [F.36]
  219. non-cancellable lease
    • A lease that is cancellable only:
    • (a) upon the occurrence of some remote contingency
    • (b) with the permission of the lessor
    • (c) if the lessee enters into a new lease for the same or an equivalent asset with the same lessor or
    • (d) upon payment by the lessee of such an additional amount that, at inception of the lease, continuation of the lease is reasonably certain.[IAS 17.4]
  220. non-controlling interest
    The equity in a subsidiary not attributable, directly or indirectly, to a parent [IAS 27.4, IFRS 3.A]
  221. non-current asset
    An asset that does not meet the definition of a current asset. [IFRS 5.A]
  222. normal capacity of production facilities
    The production expected to be achieved on average over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. [IAS 2.13]
  223. notes
    Notes contain information in addition to that presented in the statement of financial position, statement of comprehensive income, separate income statement (if presented), statement of changes in equity and statement of cash flows. Notes provide narrative descriptions or dis-aggregations of items presented in those statements and information about items that do not qualify for recognition in those statements. [IAS 1.7]
  224. obligating event
    An event that creates a legal or constructive obligation that results in an entity having no realistic alternative to settling that obligation. [IAS 37.10]
  225. obligation
    A duty or responsibility to act or perform in a certain way. Obligations may be legally enforceable as a consequence of a binding contract or statutory requirement. Obligations also arise, however, from normal business practice, custom and a desire to maintain good business relations or act in an equitable manner. [F.60]
  226. onerous contract
     A contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. [IAS 37.10]
  227. opening IFRS statement of financial position
    An entity's statement of financial position at the date of transition to IFRSs. [IFRS 1.A]
  228. operating activities
    The principal revenue-producing activities of an entity and other activities that are not investing or financing activities. [IAS 7.6, IAS 14.8]
  229. operating cycle
    The time between the acquisition of assets for processing and their realization in cash or cash equivalents. [IAS 1.68].
  230. operating lease
    A lease other than a finance lease. [IAS 17.4]
  231. operating segment
    • An operating segment is a component of an entity:
    • (a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity)
    • (b) whose operating results are regularly reviewed by the entity;s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and
    • (c) for which discrete financial information is available.[IFRS 8]
  232. options, warrants and their equivalents
    Financial instruments that give the holder the right to purchase ordinary shares. [IAS 33.5]
  233. ordinary equity holders
    Holders of ordinary shares. [IAS 33.5�9]
  234. ordinary share
    An equity instrument that is subordinate to all other classes of equity instruments. [IAS 33.5]
  235. originated loans and receivables
    Items of income and expense (including reclassification adjustments) that are not recognized in profit or loss as required or permitted by other IFRSs. [IAS 1.7]
  236. other long-term employee benefits
    Employee benefits (other than post-employment benefits and termination benefits) which do not fall due wholly within twelve months after the end of the period in which the employees render the related service. [IAS 19.7]
  237. other price risk
    The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. [IFRS 7.A]
  238. owner-occupied property
    Property held (by the owner or by the lessee under a finance lease) for use in the production or supply of goods or services or for administrative purposes. [IAS 40.5]
  239. owners
    Holders of instruments classified as equity. [IAS 1.7]
  240. owners
    In IFRS 3 owners is used broadly to include holders of equity interests of investor-owned entities and owners or members of, or participants in, mutual entities. [IFRS 3.A]
  241. parent
    An entity that has one or more subsidiaries. [IAS 27.4, IFRS 3.A]
  242. participants
    The members of a retirement benefit plan and others who are entitled to benefits under the plan. [IAS 26.8]
  243. past due
    A financial asset is past due when a counterparty has failed to make a payment when contractually due. [IFRS 7.A]
  244. past service cost
    The increase in the present value of the defined benefit obligation for employee service in prior periods, resulting in the current period from the introduction of, or changes to, post-employment benefits or other long-term employee benefits. Past service cost may be either positive (where benefits are introduced or improved) or negative (where existing benefits are reduced). [IAS 19.7]
  245. percentage of completion method
    The recognition of revenue and expenses by reference to the stage of completion of a contract. Under this method contract revenue is matched with the contract costs incurred in reaching the stage of completion, resulting in the reporting of revenue, expenses and profit which can be attributed to the proportion of work completed. [IAS 11.25]
  246. performance
    The relationship of the income and expenses of an entity, as reported in the income statement [statement of comprehensive income]. [F.47]
  247. plan assets (of an employee benefit plan)
    (a) Assets held by a long-term employee benefit fund
  248. policyholder
    A party that has a right to compensation under an insurance contract if an insured event occurs. [IFRS 4.A]
  249. post-employment benefits
    Employee benefits (other than termination benefits) which are payable after the completion of employment. [IAS 19.7]
  250. post-employment benefit plans
    Formal or informal arrangements under which an entity provides post-employment benefits for one or more employees. [IAS 19.7]
  251. potential ordinary share
    A financial instrument or other contract that may entitle its holder to ordinary shares. [IAS 33.5].
  252. presentation currency
    The currency in which the financial statements are presented. [IAS 21.8]
  253. present value
    A current estimate of the present discounted value of the future net cash flows in the normal course of business. [F.100(d)]
  254. primary financial instruments
    Financial instruments such as receivables, payables and equity securities, that are not derivative financial instruments. [IAS 32.AG15]
  255. prior period errors
    Omissions from, and misstatements in, the entity�s financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that: (a) was available when financial statements for those periods were authorized for issue and (b) could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements. Such errors include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud. [IAS 8.5]
  256. probable
    More likely than not. IFRS 5.A, (IAS 37.23)
  257. profit
    The residual amount that remains after expenses (including capital maintenance adjustments, where appropriate) have been deducted from income. Any amount over and above that required to maintain the capital at the beginning of the period is profit. [F.105, F.107]
  258. profit or loss
    The total of income less expenses, excluding the components of other comprehensive income. [IAS 1.7]
  259. projected unit credit method
    An actuarial valuation method that sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation (sometimes known as the accrued benefit method pro-rated on service or as the benefit/years of service method). [IAS 19.64�66]
  260. property, plant and equipment
    Tangible items that:(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes
  261. proportionate consolidation
    A method of accounting and reporting whereby a venturer�s share of each of the assets, liabilities, income and expenses of a jointly controlled entity is combined line by line with similar items in the venturer�s financial statements or reported as separate line items in the venturer�s financial statements. [IAS 31.3]
  262. prospective application � Prospective application of a change in accounting policy and of recognizing the effect of a change in an accounting estimate, respectively, are: (a) applying the new accounting policy to transactions, other events and conditions occurring after the date as at which the policy is changed and(b) recognizing the effect of the change in the accounting estimate in the current and future periods affected by the change.[IAS 8.5]
  263. provision
    A liability of uncertain timing or amount. [IAS 37.10]
  264. prudence
    The inclusion of a degree of caution in the exercise of the judgements needed in making the estimates required under conditions of uncertainty, such that assets or income are not overstated and liabilities or expenses are not understated. [F.37]
  265. put options (on ordinary shares)
    Contracts that give the holder the right to sell ordinary shares at a specified price for a given period. [IAS 33.5]
  266. qualifying asset
    An asset that necessarily takes a substantial period of time to get ready for its intended use or sale. [IAS 23.5]
  267. qualifying insurance policy
    An insurance policy issued by an insurer that is not a related party (as defined in IAS 24) of the reporting entity, if the proceeds of the policy:(a) can be used only to pay or fund employee benefits under a defined benefit plan (b) are not available to the reporting entity�s own creditors (even in bankruptcy) and cannot be paid to the reporting entity, unless either: (i) the proceeds represent surplus assets that are not needed for the policy to meet all the related employee benefit obligations
  268. realizable value
    The amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal. [F.100(c)]
  269. reclassification adjustments
    Amounts reclassified to profit or loss in the current period that were recognized in other comprehensive income in the current or previous periods. [IAS 1.7]
  270. recognition
    The process of incorporating in the balance sheet [statement of financial position] or income statement [statement of comprehensive income] an item that meets the definition of an element and satisfies the following criteria for recognition:(a) it is probable that any future economic benefit associated with the item will flow to or from the entity
  271. recoverable amount
    The higher of an asset's (or cash-generating unit's) fair value less costs to sell and its value in use. [IAS 36.6, IFRS 5.A]
  272. recoverable amount
    The higher of an asset's net selling price and its value in use. [IAS 16.6]
  273. regular way purchase or sale
    A purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned. [IAS 39.9]
  274. reinsurance assets
    A cedant's net contractual rights under a reinsurance contract. [IFRS 4.A]
  275. reinsurance contract
    An insurance contract issued by one insurer (the reinsurer) to compensate another insurer (the cedant) for losses on one or more contracts issued by the cedant. [IFRS 4.A]
  276. reinsurer
    The party that has an obligation under a reinsurance contract to compensate a cedant if an insured event occurs. [IFRS 4.A]
  277. related party
    • A party is related to an entity if:
    • (a) directly, or indirectly through one or more intermediaries, the party:
    • (i) controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries)
    • (ii) has an interest in the entity that gives it significant influence over the entity or
    • (iii) has joint control over the entity
    • (b) the party is an associate (as defined in IAS 28) of the entity
    • (c) the party is a joint venture in which the entity is a venturer (see IAS 31)
    • (d) the party is a member of the key management personnel of the entity or its parent
    • (e) the party is a close member of the family of any individual referred to in (a) or (d)
    • (f) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e) or
    • (g) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity. [IAS 24.9]
  278. related party transaction
    A transfer of resources, services or obligations between related parties, regardless of whether a price is charged. [IAS 24.9]
  279. relevance
    Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present or future events or confirming, or correcting, their past evaluations. [F.26]
  280. reliability
    Information has the quality of reliability when it is free from material error and bias and can be depended upon by users to represent faithfully that which it either purports to represent or could reasonably be expected to represent. [F.31]
  281. reload feature
    A feature that provides for an automatic grant of additional share options whenever the option holder exercises previously granted options using the entity�s shares, rather than cash, to satisfy the exercise price. [IFRS 2.A]
  282. reload option
    A new share option granted when a share is used to satisfy the exercise price of a previous share option. [IFRS 2.A]
  283. reportable segment
    An operating segment for which IFRS 8 requires information to be disclosed. [IFRS 8.11]
  284. reporting entity
    An entity for which there are users who rely on the financial statements as their major source of financial information about the entity. [F.8]
  285. research
    Original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. [IAS 38.8]
  286. residual value (of an asset)
    The estimated amount that an entity would currently obtain from disposal of an asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. [IAS 16.6, (IAS 38.8]
  287. restructuring
    A program that is planned and controlled by management, and materially changes either: (a) the scope of a business undertaken by an entity or (b) the manner in which that business is conducted. [IAS 37.10]
  288. retirement benefit plans
    Arrangements whereby an entity provides benefits for its employees on or after termination of service (either in the form of an annual income or as a lump sum) when such benefits, or the employer's contributions towards them, can be determined or estimated in advance of retirement from the provisions of a document or from the entity's practices. () [IAS 26.8]
  289. retrospective application
    Applying a new accounting policy to transactions, other events and conditions as if that policy had always been applied. [IAS 8.5]
  290. retrospective restatement
    Correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period error had never occurred. [IAS 8.5]
  291. return on plan assets (of an employee benefit plan)
    Interest, dividends and other revenue derived from the plan assets, together with realized and unrealized gains or losses on the plan assets, less any costs of administering the plan and less any tax payable by the plan itself. [IAS 19.7]
  292. revaluation
    Restatement of assets and liabilities. [F.81]
  293. revalued amount of an asset
    The fair value of an asset at the date of a revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. [IAS 16.31]
  294. revenue
    The gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants. [IAS 18.7]
  295. reverse acquisition
    An acquisition where the acquirer is the entity whose equity interests have been acquired and the issuing entity is the acquiree. This might be the case when, for example, a private entity arranges to have itself acquired by a smaller public entity as a means of obtaining a stock exchange listing. [IFRS 3.21]
  296. rewards associated with a leased asset
    Rewards may be represented by the expectation of profitable operation over the asset's economic life and of gain from appreciation in value or realization of a residual value. [IAS 17.7]
  297. risks associated with a leased asset
    Risks include possibilities of losses from idle capacity or technological obsolescence and of variations in return because of changing economic conditions. [IAS 17.7]
  298. sale and leaseback transaction
    The sale of an asset and the leasing back of the same asset. The lease payment and the sale price are usually interdependent because they are negotiated as a package. [IAS 17.58]
  299. separate financial statements
    Those presented by a parent, an investor in an associate or a venturer in a jointly controlled entity, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees. [IAS 27.4, IAS 28.2, IAS 31.3]
  300. set-off, legal right of
    A debtor's legal right, by contract or otherwise, to settle or otherwise eliminate all or a portion of an amount due to a creditor by applying against that amount an amount due from the creditor. [IAS 32.45]
  301. settlement (of employee benefit obligations)
    A transaction that eliminates all further legal or constructive obligation for part or all of the benefits provided under a defined benefit plan, for example, when a lump-sum cash payment is made to, or on behalf of, plan participants in exchange for their rights to receive specified post-employment benefits. [IAS 19.112]
  302. settlement date
    The date that a financial asset is delivered to or by an entity. [IAS 39.AG56]
  303. settlement value
    The undiscounted amounts of cash or cash equivalents expected to be paid to satisfy the liabilities in the normal course of business. [F.100(c)]
  304. share-based payment arrangement
    An agreement between the entity and another party (including an employee) to enter into a share-based payment transaction, which thereby entitles the other party to receive cash or other assets of the entity for amounts that are based on the price of the entity's shares or other equity instruments of the entity, or to receive equity instruments of the entity, provided the specified vesting conditions, if any, are met. [IFRS 2.A]
  305. share-based payment transaction
    A transaction in which the entity receives goods or services as consideration for equity instruments of the entity (including shares or share options), or acquires goods or services by incurring liabilities to the supplier of those goods or services for amounts that are based on the price of the entity's shares or other equity instruments of the entity. [IFRS 2.A]
  306. share option
    A contract that gives the holder the right, but not the obligation, to subscribe to the entity's shares at a fixed or determinable price for a specific period of time. [IFRS 2.A]
  307. short seller
    An entity that sells financial assets that it has borrowed and does not yet own. [IAS 39.AG15]
  308. short-term employee benefits
    Employee benefits (other than termination benefits) which fall due wholly within twelve months after the end of the period in which the employees render the related service. [IAS 19.7]
  309. significant influence
    The power to participate in the financial and operating policy decisions of an entity, but not control over those policies. Significant influence may be gained by share ownership, statute or agreement. [IAS 24.9, (IAS 28.2), (IAS 31.3)]
  310. solvency
    The availability of cash over the longer term to meet financial commitments as they fall due. [F.16]
  311. spot exchange rate
    The exchange rate for immediate delivery. [IAS 21.8]
  312. state (employee benefit) plan
    Employee benefit plans established by legislation to cover all entities (or all entities in a particular category, for example a specific industry) and operated by national or local government or by another body (for example an autonomous agency created specifically for this purpose) which is not subject to control or influence by the reporting entity. [IAS 19.37]
  313. subsidiary
    An entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent). [IFRS 3.A, IAS 27.4, IAS 28.2]
  314. substance over form
    The principle that transactions and other events are accounted for and presented in accordance with their substance and economic reality and not merely their legal form. [F.35, (IAS 8.7�10)]
  315. tax base of an asset or liability
    The amount attributed to that asset or liability for tax purposes. [IAS 12.5]
  316. tax expense (tax income)
    The aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax. Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax expense (deferred tax income). [IAS 12.5, IAS 12.6]
  317. taxable profit (tax loss)
    The profit (loss) for a period, determined in accordance with the rules established by the taxation authorities, upon which income taxes are payable (recoverable). [IAS 12.5]
  318. taxable temporary differences
    Temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled. [IAS 12.5]
  319. temporary differences
    Differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Temporary differences may be either: (a) taxable temporary differences or (b) deductible temporary differences.[IAS 12.5]
  320. termination benefits
    Employee benefits payable as a result of either: (a) an entity's decision to terminate an employee's employment before the normal retirement date
  321. total comprehensive income
    The change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners. [IAS 1.7]
  322. trade date
    The date that an entity commits itself to purchase or sell an asset. [IAS 39.AG55]
  323. transaction costs (financial instruments)
    Incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability (see IAS 39 paragraph AG13). An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument. [IAS 39.9]
  324. transitional liability (defined benefit plans)
    For an entity on first adopting IAS 19: (a) the present value of the obligation at the date of adoption
  325. treasury shares
    An entity's own equity instruments, held by the entity or other members of the consolidated group. [IAS 32.33]
  326. unbundle
    Account for the components of a contract as if they were separate contracts. [IFRS 4.A]
  327. understandability
    Information provided in financial statements has the quality of understandability when it is comprehensible to users who have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence. [F.25]
  328. unearned finance income
    The difference between: (a) the gross investment in the lease, and (b) the net investment in the lease.[IAS 17.4]
  329. unguaranteed residual value
    That portion of the residual value of the leased asset, the realization of which by the lessor is not assured or is guaranteed solely by a party related to the lessor. [IAS 17.4]
  330. useful life
    The estimated remaining period, from the commencement of the lease term, without limitation by the lease term, over which the economic benefits embodied in the asset are expected to be consumed by the entity. [IAS 17.4]
  331. useful life
    Either:(a) the period over which an asset is expected to be available for use by an entity or (b) the number of production or similar units expected to be obtained from the asset by the entity.[IAS 16.6, IAS 36.6, IAS 38.8]
  332. value in use
    The present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. [IFRS 5.A]
  333. value in use
    The present value of the future cash flows expected to be derived from an asset or cash-generating unit. [IAS 36.6]
  334. variable production overheads
    Those indirect costs of production that vary directly, or nearly directly, with the volume of production, such as indirect materials and indirect labor. [IAS 2.12]
  335. venturer
    A party to a joint venture that has joint control over that joint venture. [IAS 31.3]
  336. vest
    To become an entitlement. Under a share-based payment arrangement, a counterparty's right to receive cash, other assets or equity instruments of the entity vests when the counterparty's entitlement is no longer conditional on the satisfaction of any vesting conditions. [IFRS 2.A]
  337. vested benefits
    Benefits, the rights to which, under the conditions of a retirement benefit plan, are not conditional on continued employment. [IAS 26.8]
  338. vested employee benefits
    Employee benefits that are not conditional on future employment [ IAS 19.7]
  339. vesting conditions
    The conditions that determine whether the entity receives the services that entitle the counterparty to receive cash, other assets or equity instruments of the entity, under a share-based payment arrangement. They are either service conditions or performance conditions. Service conditions require the counterparty to complete a specified period of service. Performance conditions require the counterparty to complete a specified period of service and specified performance targets to be met (such as a specified increase in the entity's profit over a specified period of time). A performance condition might include a market condition. [IFRS 2.A]
  340. vesting period
    The period during which all the specified vesting conditions of a share-based payment arrangement are to be satisfied. [IFRS 2.A]
  341. warrant
    A financial instrument that gives the holder the right to purchase ordinary shares. [IAS 33.5]
  342. weighted average cost formula
    Under this formula, the cost of each item is determined from the weighted average of the cost of similar items at the beginning of a period and the cost of similar items purchased or produced during the period. The average may be calculated on a periodic basis, or as each additional shipment is received, depending upon the circumstances of the entity. [IAS 2.27]
  343. weighted average number of ordinary shares outstanding during the period
    The number of ordinary shares outstanding at the beginning of the period, adjusted by the number of ordinary shares bought back or issued during the period multiplied by a time-weighting factor. [IAS 33.20]

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