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IAS Definitions
Definitions from the Standards for AAT Level 4 syllabus
| Term | Definition |
|---|---|
| IAS 16 - 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; and (b) are expected to be used during more than one period |
| IAS 16 & IAS 36 - Carrying amount | the amount at which an asset is recognised after deducting any accumulated depreciation and accumulated impairment losses |
| IAS 16 - Cost | the amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction |
| IAS 16 - Depreciable amount | the cost of an asset, or other amount substituted for cost, less its residual value |
| IAS 16 - Depreciation | the systematic allocation of the depreciable amount of an asset over its useful life |
| IAS 16 & IAS 17 - Fair value | the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date |
| IAS 16 - An impairment loss | the amount by which the carrying amount of an asset exceeds its recoverable amount |
| IAS 16 & IAS 36 - Recoverable amount | the higher of an asset's fair value less costs to sell (sometimes called net selling price) and its value in use |
| IAS 16 - Residual value | the estimated amount that an entity would currently obtain from disposal of the 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 - Useful life | (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 an entity |
| IAS 38 - Intangible asset | an identifiable non-monetary asset without physical substance |
| IAS 38 - Research | is original investigation which is undertaken in order to obtain new knowledge |
| IAS 38 - Development | is the application of research findings to produce new or improved materials, products or processes |
| IAS 36 - Impairment | an asset is impaired when its carrying amount exceeds its recoverable amount |
| IAS 36 - Value in use | the discounted present value of the future cash flows expected to arise from: the continuing use of an asset, and from its disposal at the end of its useful life |
| IAS 2 - Net realisable value | the estimated selling price in the ordinary course of business, LESS the estimated cost of completion and the estimated costs necessary to make the sale |
| IAS 2 - Inventory | Inventories are 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. |
| IAS 37 - Provision | a liability of uncertain timing or amount |
| IAS 37 - Liability | present obligation as a result of past events settlement is expected to result in an outflow of resources (payment) |
| IAS 37 - Contingent liability | a possible obligation depending on whether some uncertain future event occurs, or a present obligation but payment is not probable or the amount cannot be measured reliably |
| IAS 37 - Contingent asset | a possible asset that arises from past events, and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity |
| IAS 37 -A legal obligation | an obligation that derives from: a contract (through its explicit or implicit terms); legislation; or other operation of law. |
| IAS 10 -Event after the reporting period | An event, which could be favourable or unfavourable, that occurs between the end of the reporting period and the date that the financial statements are authorised for issue. |
| IAS 10- Adjusting event | An event after the reporting period that provides further evidence of conditions that existed at the end of the reporting period, including an event that indicates that the going concern assumption is not appropriate |
| IAS 10 - Non-adjusting event | An event after the reporting period that is indicative of a condition that arose after the end of the reporting period. |
| IFRS 15 - Customer | a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. |
| IFRS 15 - 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 an increase in equity, other than those relating to contributions from equity participants |
| IFRS 15 - Revenue | income arising in the course of an entity’s ordinary activities. |
| IAS 1 - Fair Presentation | Financial statements shall present fairly the financial position, financial performance and cash flows. Fair presentation requires the faithful representation of the effects of transactions, other events and conditions in accordance the Framework |
| IAS 1 - Current Asset | 1) expected to be realised in the entity's normal operating cycle 2) held primarily for the purpose of trading 3) expected to be realised within 12 months after the reporting period 4) cash and cash equivalents (unless restricted). |
| IAS 1 - Current Liabilities | 1) expected to be settled within the entity's normal operating cycle 2) held for purpose of trading 3) due to be settled within 12 months 4) for which the entity does not have an unconditional right to defer settlement beyond 12 months |
| IAS 38 - Amortisation | The systematic allocation of the depreciable amount of an intangible asset over its useful life. |
| An asset | a) A present economic resource controlled by an entity as a result of past events; and b) An economic resource is a right that has the potential to produce economic benefits. |
| IAS 38 - Impairment loss | The amount by which the carrying amount of an asset exceeds its recoverable amount. |
| IAS 38 - Indefinite life | No foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity |
| IFRS 16 - Interest rate implicit in the lease | The rate of interest that causes the present value of (a) the lease payments and (b) the unguaranteed residual value to equal the sum of (i) the fair value of the underlying asset and (ii) any initial direct costs of the lessor. |
| IFRS 16 - Lease | A contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration |
| IFRS 16 - Lessee’s incremental borrowing rate | The rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of- use asset in a similar economic environment |
| IAS 16 - Residual value | The estimated amount that an entity would currently obtain from disposal of the 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 |
| IFRS 16 - Right to use asset | An asset that represents a lessee’s right to use an underlying asset for the lease term. |
| IFRS 16 - Short term asset | A lease that, at the commencement date, has a lease term of 12 months or less. A lease that contains a purchase option is not a short-term lease. |
Created by:
Kate Elis-Williams
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