Module 1 - L1.4 - L1.6(part 1 1.6)

<p>Do not recognize the asset until the uncertainty is resolved. (B)</p> Signup and view all the answers

<p>The definitions of the other elements flow from the definitions of assets and liabilities. (B)</p> Signup and view all the answers

<p>This cannot be an asset because it's not protected so other companies have the same access to it. (D)</p> Signup and view all the answers

<p>Definition, recognition, measurement, and disclosure. (B)</p> Signup and view all the answers

<p>Rights that everyone can access and use to generate economic benefits. (D)</p> Signup and view all the answers

<p>Through an entity’s financial performance and its contributions from, and distributions to, holders of equity claims. (C)</p> Signup and view all the answers

<p>An increase in assets or a reduction in liabilities, and an increase in equity, other than from contributions from owners. (A)</p> Signup and view all the answers

<p>Because the increase in liability cancels out the increase in assets, resulting in no change in equity. (C)</p> Signup and view all the answers

<p>Revenue arises in the course of ordinary activities, while gains may or may not arise in the course of ordinary activities. (C)</p> Signup and view all the answers

<p>Paying wages to employees for services provided. (C)</p> Signup and view all the answers

<p>A decrease in assets or an increase in liabilities, and a decrease in equity, other than those arising from distributions to holders of equity claims. (C)</p> Signup and view all the answers

<p>In other comprehensive income (OCI) and accumulated in equity. (C)</p> Signup and view all the answers

<p>Carrying amount. (A)</p> Signup and view all the answers

<p>When it provides relevant information and a faithful representation of that element. (C)</p> Signup and view all the answers

<p>If it is uncertain whether the element exists or if the probability of an inflow or outflow of economic benefits is low. (D)</p> Signup and view all the answers

<p>Assets increase, and liabilities increase. (C)</p> Signup and view all the answers

<p>Expenses decrease assets or increase liabilities, leading to a decrease in equity. (A)</p> Signup and view all the answers

<p>Gains are not considered different in nature to revenue. (B)</p> Signup and view all the answers

<p>When it is relevant and faithfully represents what it is supposed to represent. (A)</p> Signup and view all the answers

<p>Paying dividends. (B)</p> Signup and view all the answers

<p>The current cost of replacing an existing asset with an identical one. (B)</p> Signup and view all the answers

<p>Entry price (B)</p> Signup and view all the answers

<p>Rapid technological advancements make it difficult to find replacement assets with equivalent capacity. (B)</p> Signup and view all the answers

<p>It may not be relevant to decision-making, as it focuses on replacement cost rather than value received. (B)</p> Signup and view all the answers

<p>IAS 29 Financial Reporting in Hyperinflationary Economies (B)</p> Signup and view all the answers

<p>Incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense (C)</p> Signup and view all the answers

<p>Fair value less costs of disposal measures what could be obtained from selling an asset in its current state, while net realisable value measures the benefits the entity expects to realize from the asset. (D)</p> Signup and view all the answers

<p>Work-in-progress inventory requires further completion before it can be sold. (C)</p> Signup and view all the answers

<p>The lower of cost and net realisable value (C)</p> Signup and view all the answers

<p>It depends on management's strategies and intentions regarding asset use. (B)</p> Signup and view all the answers

<p>Finance costs (A)</p> Signup and view all the answers

<p>To ensure the amount represented by the current cost is recoverable (A)</p> Signup and view all the answers

<p>Advances in technology may mean that any available replacement asset would increase capacity (B)</p> Signup and view all the answers

<p>It is not a measure of the value received but of the amount of the sacrifice that would be required to replace an asset (D)</p> Signup and view all the answers

<p>Management strategies and expectations with the assets concerned may change in response to changes in the business environment or over time (D)</p> Signup and view all the answers

<p>Amortised cost method using the effective-interest-rate (C)</p> Signup and view all the answers

<p>A market-determined, risk-adjusted discount rate current at the date of issue. (C)</p> Signup and view all the answers

<p>IFRS 16 (D)</p> Signup and view all the answers

<p>Market yields on high-quality corporate bonds with equivalent terms and currency. (D)</p> Signup and view all the answers

<p>A pre-tax rate that reflects current market assessments and risks specific to the asset. (D)</p> Signup and view all the answers

<p>A pre-tax rate reflecting current market assessments and risks specific to the liability. (A)</p> Signup and view all the answers

<p>To provide principles for the recognition, measurement, presentation, and disclosure of leases. (C)</p> Signup and view all the answers

<p>The entity that obtains the right to use the asset. (D)</p> Signup and view all the answers

<p>The number of units produced by the underlying asset (A)</p> Signup and view all the answers

<p>To provide consistency and understandability in financial reporting across different organizations. (C)</p> Signup and view all the answers

<p>Each time there is a change to the terms and conditions of the contract and at its commencement. (A)</p> Signup and view all the answers

<p>IFRS 16 (B)</p> Signup and view all the answers

<p>Professional judgement should only be used in considering whether or not a lessee is 'reasonably certain' to exercise specific options that will impact the lease term and the measurement criteria. (C)</p> Signup and view all the answers

<p>Market yields on high-quality corporate bonds with equivalent terms and currency at the end of the reporting period. (B)</p> Signup and view all the answers

<p>It provides a baseline for assessing the relative performance and financial position of different entities. (D)</p> Signup and view all the answers

<p>Social and political constraints (B)</p> Signup and view all the answers

<p>Determining the historical cost at acquisition (A)</p> Signup and view all the answers

<p>Changes in reported income and expenses (C)</p> Signup and view all the answers

<p>Liquidation value (B)</p> Signup and view all the answers

<p>Entry prices at acquisition (D)</p> Signup and view all the answers

<p>Cost-based and value-based measures (A)</p> Signup and view all the answers

<p>Consideration paid and transaction costs (C)</p> Signup and view all the answers

<p>Cost-based measures (B)</p> Signup and view all the answers

<p>The amount an asset could be exchanged for in an orderly transaction between market participants (D)</p> Signup and view all the answers

<p>The estimated selling price minus the costs associated with selling (C)</p> Signup and view all the answers

<p>Cost-based and value-based measures (C)</p> Signup and view all the answers

<p>To reflect the asset's value over time and economic changes (B)</p> Signup and view all the answers

<p>The entity's objective and situation (D)</p> Signup and view all the answers

<p>Cost constraint (B)</p> Signup and view all the answers

<p>When an asset is initially recognized (A)</p> Signup and view all the answers

<p>Fair value of the asset decreasing (B)</p> Signup and view all the answers

<p>Economic constraints (A)</p> Signup and view all the answers

<p>Absence of present obligation (B)</p> Signup and view all the answers

<p>It occurs concurrently with the initial recognition of a liability (C)</p> Signup and view all the answers

<p>Issuance of shares to raise capital (B)</p> Signup and view all the answers

<p>Due to pressure from interest groups (A)</p> Signup and view all the answers

<p>Provide information in the notes (C)</p> Signup and view all the answers

<p>Decreased share prices for some entities (C)</p> Signup and view all the answers

<p>To reflect contributions or distributions to equity holders (B)</p> Signup and view all the answers

<p>Purchase of inventory on credit (A)</p> Signup and view all the answers

<p>The relationship to recognized assets and liabilities (D)</p> Signup and view all the answers

<p>It may impact the decision on whether to recognize an element. (A)</p> Signup and view all the answers

<p>At the value of the consideration received minus transaction costs. (B)</p> Signup and view all the answers

<p>Highly relevant for future predictive analysis. (C)</p> Signup and view all the answers

<p>Old costs are associated with current revenues. (A)</p> Signup and view all the answers

<p>Values change only when a future transaction occurs. (C)</p> Signup and view all the answers

<p>Higher costs may mislead users about a company's efficiency. (C)</p> Signup and view all the answers

<p>It may misrepresent the true indicative value of the asset. (D)</p> Signup and view all the answers

<p>Initial recognition minus principal repayments plus cumulative amortisation. (C)</p> Signup and view all the answers

<p>It discounts future cash receipts or payments to present value. (D)</p> Signup and view all the answers

<p>It can lead to poor long-term investment decisions. (C)</p> Signup and view all the answers

<p>It may yield differing asset valuations based on company efficiency. (A)</p> Signup and view all the answers

<p>Estimates of future cash flows discounted at a rate (A)</p> Signup and view all the answers

<p>It reflects the actual transaction values without modification. (C)</p> Signup and view all the answers

<p>The exit price for selling an asset (D)</p> Signup and view all the answers

<p>Objectivity can be compromised when determining historical costs. (D)</p> Signup and view all the answers

<p>Level 1 inputs (D)</p> Signup and view all the answers

<p>Future changes in market conditions. (C)</p> Signup and view all the answers

<p>A forward-looking assessment. (B)</p> Signup and view all the answers

<p>It assumes an orderly transaction (C)</p> Signup and view all the answers

<p>Market prices for similar but not identical assets (B)</p> Signup and view all the answers

<p>It lacks relevance for held-to-maturity assets (D)</p> Signup and view all the answers

<p>The cost of an equivalent asset at measurement date (D)</p> Signup and view all the answers

<p>By the inputs' visibility in the market (C)</p> Signup and view all the answers

<p>Reference to quoted prices and cash flow amounts (D)</p> Signup and view all the answers

<p>The price received to sell an asset (B)</p> Signup and view all the answers

<p>They are developed with significant unobservable inputs (B)</p> Signup and view all the answers

<p>Level 3 (D)</p> Signup and view all the answers

<p>Valuation models with significant observable inputs (B)</p> Signup and view all the answers

<p>Adequate time for marketing before the sale (B)</p> Signup and view all the answers

<p>A present obligation of the entity to transfer an economic resource as a result of past events. (D)</p> Signup and view all the answers

<p>A company has a long-standing practice of accepting returns of faulty goods beyond the warranty period to maintain customer relationships. (D)</p> Signup and view all the answers

<p>Declaration of future dividends. (A)</p> Signup and view all the answers

<p>An asset (equipment) and a liability (accounts payable) are recognized. (D)</p> Signup and view all the answers

<p>The residual interest in the assets of the entity after deducting all its liabilities. (B)</p> Signup and view all the answers

<p>The item must be a physical asset. (A)</p> Signup and view all the answers

<p>It has no immediate impact on the balance sheet until the transaction occurs. (D)</p> Signup and view all the answers

<p>Capitalized as part of the road and depreciated over its useful life. (B)</p> Signup and view all the answers

<p>When the machinery is received. (A)</p> Signup and view all the answers

<p>The entity's control of the benefits arising from using the asset. (A)</p> Signup and view all the answers

<p>The entity avoids an outflow of resources by discharging the debt obligation. (C)</p> Signup and view all the answers

<p>Assets can only arise from past events. (B)</p> Signup and view all the answers

<p>Present obligation, transfer of economic resources, and past events. (A)</p> Signup and view all the answers

<p>Signing a contract to purchase equipment next year. (B)</p> Signup and view all the answers

<p>Equity is derived based on the difference between assets and liabilities. (B)</p> Signup and view all the answers

<p>Dr Bonus expense $50,000, Cr Equity $50,000 (D)</p> Signup and view all the answers

<p>As an increase in liabilities measured at fair value (D)</p> Signup and view all the answers

<p>Calculated based on the fair value of the goods or services received (A)</p> Signup and view all the answers

<p>Measure and remeasure the liability at fair value until settled (B)</p> Signup and view all the answers

<p>Use the fair value of equity instruments granted for measurement (D)</p> Signup and view all the answers

<p>When employee services are received in equity-settled transactions (A)</p> Signup and view all the answers

<p>It drives the measurement of both equity and assets (C)</p> Signup and view all the answers

<p>They can be remeasured until the liability is settled (C)</p> Signup and view all the answers

<p>Future cash flows often involve uncertainty. (A)</p> Signup and view all the answers

<p>As the best estimate of required expenditure to settle the obligation. (C)</p> Signup and view all the answers

<p>Determining recoverable amount for the cash-generating unit when individual assets cannot be assessed. (A)</p> Signup and view all the answers

<p>The choice of discount rate significantly impacts the present value. (C)</p> Signup and view all the answers

<p>Market risk due to economy-wide factors affecting all assets. (B)</p> Signup and view all the answers

<p>Through diversification of their investment portfolio. (C)</p> Signup and view all the answers

<p>When the cash flows are discounted at a rate adjusted for systematic risk and yield a positive net present value. (C)</p> Signup and view all the answers

<p>Discount rates should reflect the market yields on high-quality corporate bonds. (B)</p> Signup and view all the answers

<p>Allocating cash flows to specific items may introduce subjectivity. (C)</p> Signup and view all the answers

<p>The systematic risk associated with an asset or group of assets. (D)</p> Signup and view all the answers

<p>They must be included if there is sufficient objective evidence they will occur. (D)</p> Signup and view all the answers

<p>They reflect the interest rate implicit in the original contract. (D)</p> Signup and view all the answers

<p>It does not affect the value perceived by investors. (B)</p> Signup and view all the answers

<p>Both systematic and unsystematic risks should be combined. (C)</p> Signup and view all the answers

<p>The non-cancellable period plus any guaranteed extensions (D)</p> Signup and view all the answers

<p>The cost of lease liability plus any initial direct costs (A)</p> Signup and view all the answers

<p>Present value of future lease payments (B)</p> Signup and view all the answers

<p>If the lessee is reasonably certain to exercise that option (A)</p> Signup and view all the answers

<p>The asset can stand alone without dependency on other assets (C)</p> Signup and view all the answers

<p>The lessee continues using historical cost unless alternative models are applied (B)</p> Signup and view all the answers

<p>At the cost of the right-of-use asset (A)</p> Signup and view all the answers

<p>They form part of the cost of the right-of-use asset (D)</p> Signup and view all the answers

<p>Interest expense, lease payments, and remeasurement (B)</p> Signup and view all the answers

<p>A lease of 10 months duration (A)</p> Signup and view all the answers

<p>The lease is deemed short term (D)</p> Signup and view all the answers

<p>Past patterns of operating leases (C)</p> Signup and view all the answers

<p>Fair value model in accordance with IAS 40 (A)</p> Signup and view all the answers

<p>Includes all possible penalties for termination (B)</p> Signup and view all the answers

<p>$10,000 (A)</p> Signup and view all the answers

<p>If the main business of the entity is not selling cars (C)</p> Signup and view all the answers

<p>Amounts owed to the counterparty and other parties to fulfill a liability (A)</p> Signup and view all the answers

<p>Fulfilment value reflects entity-specific assumptions, while fair value is based on market assumptions (C)</p> Signup and view all the answers

<p>It incorporates future cash flows estimated by management, which can vary widely (B)</p> Signup and view all the answers

<p>It reflects management's intentions and expectations regarding future cash flows (A)</p> Signup and view all the answers

<p>It can be subjective and lack clarity on its basis (D)</p> Signup and view all the answers

<p>It estimates other measurement bases through cash flow discounting (A)</p> Signup and view all the answers

<p>The current market assessment of time value of money and risks (C)</p> Signup and view all the answers

<p>Fulfilment value can reflect both entity-specific and market expectations (D)</p> Signup and view all the answers

<p>It may involve arbitrary allocations of cash flows across assets (C)</p> Signup and view all the answers

<p>Determining cash flows may not be feasible or reliable (A)</p> Signup and view all the answers

<p>To measure performance accurately based on management's expectations (A)</p> Signup and view all the answers

<p>The present value of cash flows from asset usage and disposal specific to the entity (D)</p> Signup and view all the answers

<p>As the present value of expected resource transfers to fulfill a liability (A)</p> Signup and view all the answers

<p>The lessee has the option to purchase the asset at a significantly lower price. (C)</p> Signup and view all the answers

<p>The transfer of risks and rewards of ownership. (C)</p> Signup and view all the answers

<p>The lease is cancellable. (D)</p> Signup and view all the answers

<p>Recognize lease payments on a straight-line or systematic basis. (A)</p> Signup and view all the answers

<p>Added to the carrying amount and expensed over the lease term. (C)</p> Signup and view all the answers

<p>Whether the lease is classified as a finance or operating lease. (C)</p> Signup and view all the answers

<p>They must be reported alongside lease liabilities separately. (A)</p> Signup and view all the answers

<p>The amount recognized systematically over the lease term. (A)</p> Signup and view all the answers

<p>Finance leases include fixed payments and potentially other receipts. (B)</p> Signup and view all the answers

<p>All financial benefits offered to employees or for termination of employment. (A)</p> Signup and view all the answers

<p>Ownership of the asset is often transferred to the lessee over time. (A)</p> Signup and view all the answers

<p>They must be reported alongside corresponding right-of-use assets. (A)</p> Signup and view all the answers

<p>The lessee can cancel the lease agreement at any time. (D)</p> Signup and view all the answers

<p>To measure the lessor's net investment in the lease. (B)</p> Signup and view all the answers

<p>When employees provide services that result in entitlements (A)</p> Signup and view all the answers

<p>Net present value of obligations minus fair value of plan assets (B)</p> Signup and view all the answers

<p>Projected Unit Credit Method (D)</p> Signup and view all the answers

<p>Projected salary levels, including inflation and promotions (D)</p> Signup and view all the answers

<p>Current market yields on high-quality corporate bonds (A)</p> Signup and view all the answers

<p>Plan assets and qualifying insurance policies (B)</p> Signup and view all the answers

<p>When the goods are obtained or services are received (B)</p> Signup and view all the answers

<p>The existence of a liability for cash transfer (C)</p> Signup and view all the answers

<p>Projected annual salary levels (D)</p> Signup and view all the answers

<p>The probability of employee qualification for future payments (D)</p> Signup and view all the answers

<p>By recognizing an increase in equity (D)</p> Signup and view all the answers

<p>Estimating current market prices of the equity instruments (D)</p> Signup and view all the answers

<p>A liability to transfer cash or other assets (B)</p> Signup and view all the answers

<p>Discount rate used for valuation (B)</p> Signup and view all the answers

<p>Benefits expected to be settled within 12 months (C)</p> Signup and view all the answers

<p>Undiscounted amount expected to be paid (C)</p> Signup and view all the answers

<p>Medical care (A)</p> Signup and view all the answers

<p>Accumulating absences can be carried forward to future periods (B)</p> Signup and view all the answers

<p>Only when the absence is taken (B)</p> Signup and view all the answers

<p>Unused benefits are paid upon employment termination (D)</p> Signup and view all the answers

<p>The probability that the leave will be taken (B)</p> Signup and view all the answers

<p>LSL is an entitlement accrued with years of service (A)</p> Signup and view all the answers

<p>As employees render services increasing their entitlement (D)</p> Signup and view all the answers

<p>The additional amount expected due to unused entitlement (B)</p> Signup and view all the answers

<p>They can be carried to future periods if unused (A)</p> Signup and view all the answers

<p>Non-accumulating benefits cannot be carried forward (A)</p> Signup and view all the answers

<p>As services are provided during the reporting period (C)</p> Signup and view all the answers

<p>The definition of a liability must be satisfied (B)</p> Signup and view all the answers

The key components defining financial statements: assets, liabilities, equity, income, and expenses.

An asset is a present economic resource controlled by an entity, generated from past events.

1. A right; 2. Potential for future economic benefits; 3. Control by the entity.

Determining if an item meets the definition to be included in financial statements.

A right that can potentially produce economic benefits for an entity.

An entity must have rights established by contract or legislation over an asset.

Establishing whether a right exists can determine if an asset is present.

Only rights that can generate economic benefits beyond those available to others are counted as assets.

An asset recognized under IFRS 16 for leased items, showing controlled benefits.

Process of recording costs on an asset rather than as an expense immediately.

The period over which an asset is expected to generate economic benefits.

Non-physical assets like patents that provide future economic benefits.

A present obligation to transfer resources due to past events.

Current duty to transfer resources stemming from past events.

The process of fulfilling a liability through a transfer of economic resources.

Residual interest in assets after deducting liabilities; net worth of an entity.

An occurrence that gives rise to the recognition of an asset or liability.

A choice made by management that does not, by itself, create a liability.

Funds provided by the government that can lead to the recognition of an asset.

The allocation of the cost of an asset over its useful life.

The method by which a liability is settled through cash, services, or other assets.

Changing a liability into equity, such as issuing shares to settle debts.

Lack of precision in the financial statement elements' recognition.

Accurate depiction of financial statement elements as intended.

Recognition depends on whether benefits justify costs.

Removal of an asset or liability from financial statements.

Tracked when asset changes do not match liability changes.

Occurs simultaneously with an asset's or liability's recognition.

Occurs when liability or asset changes impact expenses requested.

Guidelines establishing the criteria for recognizing financial elements.

Accountants must apply judgment considering complex situations.

Variations in applying accounting standards across regions.

Impact of accounting decisions on financial performance perception.

Principles dictating when to recognize assets, liabilities, income, and expenses.

Process to develop and adjust accounting standards considering various interests.

Limitations on professional autonomy due to social expectations.

Restrictions imposed by regulators on reporting practices.

Limitations stemming from inadequate time and funding.

Determining how to quantify financial statement items.

How an asset or liability is measured when first recorded.

Ongoing measurement of an asset or liability after initial recognition.

Criteria for evaluating the value of assets and liabilities.

The initial purchase price of an asset over time.

The value of an asset based on its present market conditions.

Valuation methods focusing on entry prices paid for assets.

Valuation approaches that require valuation techniques.

The value expected when an asset is sold minus costs to sell.

The price an asset would sell for in an orderly transaction.

Allocating the cost of an asset over its useful life.

Methods used to calculate various values in reporting.

Equity is the residual interest in the assets of an entity after deducting liabilities.

Recognition involves capturing items in financial statements that meet specific definitions.

Liabilities are recorded at the value of consideration received to incur the liability.

A financial report showing assets, liabilities, and equity at a specific date.

An accounting model that incorporates various measurement bases, not just historical cost.

Historical cost is easily understood, reliable, and inexpensive to implement.

Income is increases in assets or decreases in liabilities that raise equity, not from owner contributions.

Income must either increase assets or decrease liabilities and increase equity.

Historical cost provides minimal predictive value as it records past events, not future expectations.

Current revenues may be distorted by associating them with historical costs.

Revenue arises from normal activities, while gains occur from non-ordinary events.

Expenses are decreases in assets or increases in liabilities that lower equity, not from distributions.

The future economic benefits an entity expects from an asset must not exceed its carrying amount.

An expense results in reducing assets or increasing liabilities, decreasing equity.

Costs may be allocated to assets in a way that doesn't reflect true economic value.

Profit or loss is determined by subtracting expenses from income.

The monetary amount at which an asset, liability, or equity is recognized in financial records.

Historical costs can undermine comparability between companies due to varying efficiencies in asset construction.

Recognition of an item is useful if it offers relevant data and faithfully represents its value.

Determining historical cost can be difficult, especially for fair value assessments.

A measure for financial assets and liabilities reflecting initial recognition minus repayments, plus amortisation.

An item is recognized if it provides relevant and faithful representation.

Allocates interest income or expense over the effective life using the effective interest rate.

An element may not be recognized if its economic benefit inflow or outflow probability is low.

Includes all changes in equity, except those from owner contributions or distributions.

Estimated future cash receipts or payments that are discounted to arrive at net carrying amounts.

Assets and liabilities that exist in financial context and can be measured at amortised cost under IFRS.

Equity changes during the period due to financial performance and equity holder transactions.

The present value of cash or resources expected to be transferred to settle a liability.

The present value of expected future cash flows from an asset's use.

A method for valuing assets by discounting future cash flows.

Assumptions made by entities in the market for fair value measurements.

Assumptions reflecting an entity's unique circumstances when measuring fulfilment value.

The interest rate used in present value calculations to adjust future cash flows.

The reliance on management's estimates in determining an asset's value.

Resources an entity can use to fulfill its obligations without external assistance.

Groups of assets that generate cash inflows to measure value in use.

Reflects the expected cash flows needed to settle commitments.

The obligation of management to justify and explain their estimates in financial reporting.

Issues arising from subjective value estimation that cannot be easily verified.

The consideration received for a liability minus transaction costs at the measurement date.

The current cost of replacing an existing asset with an identical one.

The current cost of replacing an existing asset with one of equivalent capacity.

A valuation technique based on current replacement cost.

Current cost may lack relevance, reliability, and comparability for decision-making.

Fair value of an asset minus incremental costs directly tied to its disposal.

Items held for sale in the ordinary course of business measured at lower of cost or net realisable value.

Inventory that is not yet complete and requires evaluation for net realisable value.

Incremental costs directly associated with selling an asset, excluding finance and tax costs.

A measurement depending on management's strategies and asset utilization.

Assessing if an asset's carrying value exceeds its recoverable amount.

A standard (IAS 29) addressing current cost amidst extreme inflation.

A transaction that is not forced, allowing for usual marketing activities before the sale.

The amount received to sell an asset or paid to transfer a liability, regarded in fair value measurements.

The price paid to acquire an asset or received to assume a liability in an exchange transaction.

A ranking system for inputs in fair value measurements based on their reliability.

Quoted prices for identical assets in active markets.

Valuation techniques using observable inputs for similar assets but not identical.

Unobservable inputs used when no market data is available, based on assumptions.

Fair value is more pertinent for assets actively traded versus those held to maturity.

Concerns around how trustworthy fair value can be for assets not traded openly.

The process of determining the fair value of an asset or liability using market data or models.

The net amount of cash being transferred into and out of a business.

Discount rate based on market conditions at the time of issue.

A method to calculate the amortised cost and interest expense based on the effective interest rate.

Rates used based on past transactions rather than current market conditions.

Discount rates relevant at the end of the reporting period, often adjusted for risks.

The current worth of future cash flows, discounted at the appropriate rate.

Valuation method reflecting market conditions to measure assets and liabilities.

Standard measuring employer obligations for employee benefits at present value.

Standard requiring discount rates that reflect current market assessments for asset values.

Requires provisions to be measured at present value using current market discount rates.

Standard outlining recognition and measurement of lease obligations in financial statements.

Process of assessing whether a contract contains a lease under IFRS 16.

Using discretion to assess complex situations in financial reporting.

Provide consistency and understanding to financial reporting across organizations.

Accounting approach allowing for different measurement bases to be applied across standards.

The unpredictability of expected incoming cash streams over time.

The amount recognized as a provision must reflect the most accurate prediction of future costs.

The concept that a sum of money has a different value today than in the future due to potential earning capacity.

Market risk that affects all investments, influenced by economic factors.

Risk specific to an individual asset that can be minimized through diversification.

The calculation of present value of cash inflows minus present value of cash outflows.

A discount rate reflecting the risk level of an asset or project.

The rate implicit in a financial contract at the time of issuance.

The factual basis that supports the predictability of future events affecting cash flows.

Benefits expected to be settled within twelve months after services are rendered.

Includes wages, bonuses, medical care, and annual leave.

Measured at the undiscounted amount expected to be paid.

Employee benefits like annual leave or sick leave compensated by the employer.

Accumulating can carry over; non-accumulating lapse if unused.

Obligations to pay any unused benefits when an employee leaves.

Benefits lapse if not used within the current period.

Liability for accumulating, non-vesting benefits depends on payment probability.

Entitlement that accrues with years of service, often payable after ten years.

Certain benefits like superannuation settle after employment ends.

Employees get legal entitlement to LSL after a set period of service.

Recognize liability once the conditions for a liability are met.

Measure expected costs as the unused entitlement accumulates at period's end.

Recognize liability based on the probability of payments being made.

Costs for non-vesting compensated absences recognized when leave is taken.

Incentives for executives based on meeting performance goals.

Share-based transactions measured at fair value of services received.

Payments made in cash that increase liabilities when services are received.

Assessment of payment value in share transactions, either directly or indirectly.