1 Flashcards
(30 cards)
Oci items will not be reclassified to pl in future
Changes in reval surplus
Remeasurement component
Remeasurements of inv in equity
OCI items may be reclassified to pl in future
FX exchange gains or losses on translation of foreign operation
Gains/losses on cash flow hedge
Remeasurements of investments In debt instruments
What is a discontinued operation?
Component sold or held for sale and is ..
Separate line of business
Part of a plan to dispose of separate line of business
Sub acquired solely for purpose of resale
Presentation of discontinued op?
Single amount on spl comprising of:
Profit/loss on operation
Profit/loss on disposal, or any loss on classification as held for sale
What is the 5 revenue recognition step
- Identify contract
- Identify separate perf obligations
- Transaction price
- Allocate trans price to perf obligation
- Recognise revenue when perf obligation satisfied
What is a contract (rr1)?
Contract = agreement between 2 parties that creates rights and obligations
Revenue recognition in a contract criteria
- Parties have approved contract and each party’s rights can be identified
- Payment terms can be identified
- Contract has commercial substance
- Probable selling entity will receive consideration
Define performance obligations
Promise to transfer distinct goods/services to a customer
Nature of performance obligations
Providing goods/services itself = principal
Arranging for goods/services to be provided by another entity = agent
What is the transaction price?
Variable consideration
Financing
Consideration payable to customer
Non cash consideration
Ias16 reval gains and losses
Gains go to oci because we don’t actually care if it goes up that’s not part of our business model
Loss go to pl as we want to be prudent and so realise losses
Where does reval gain/loss of investment property go
Goes to pl because that’s part of our business model so we want there to be a gain
What is a financial instrument?
Anything which will give rise to financial asset in books of 1 party and a financial liability/equity in books of another party
Ias 32 - what is financial equity?
Fixed number of own equity in exchange for any financial asset or cash
Ias 32 - financial liability
Variable number of own equity in exchange for any financial asset or cash
What are the 2 types of financial asset?
Debt instruments and equity instruments
Financial assets - debt (Amortised cost)
Initial measurement: record at fv
Subsequent measurement:
Amortised cost –> opening asset + effective rate of interest - cash received = closing asset
Closing asset - spf
Effective rate of interest - spl income
Cash received - sfp
Financial assets - debt (fvoci)
Initial measurement: fv
Subsequent measurement:
Amortised cost table
Opening assets + interests earned on cost - cash received = closing asset
Take closing asset to fv and gain/loss goes to oci
Financial assets - debt (fvpl)
Initial measurement: fv
Subsequent measurement: fv each year - gain or loss goes to pl
Tests to decide which model for financial assets
- Business model test
- Contractual cash flow test
Business model test for financial assets
What is intention behind holding the asset:
Hold to maturity = Amortised cost
Not sure, if favourable might sell = fvoci
Short term = fvpl
Contractual cashflow test
Where you receive interest in cash.
Not met in case of convertible debentures (some cash, some shares)
Ccf test not met then keep under fvpl no matter what business model it is
Financial assets - equity instruments
Fvoci or fvpl
Usually fvpl but use
Fvoci is when you make a irrevocable choice to opt for it when initially recorded and intend to keep asset for long time.
What is a derivative?
Anything settled at a future date which has no initial value or very little initial value and which depends on an underlying factor
