ACCT2011 Flashcards
Calculate taxable income
Adjust profit for differences between accounting and tax treatment
Tax base asset definition
CA where eco benefits not taxable
OR amount that will be deductible for future against any taxable eco benefits that will flow to entity when it recovers the CA of the asset
Derivative (secondary) financial instrument
Derive their value from something else.
Creates rights and obligations that have the effect of transferring financial risks inherent in an underlying primary financial instrument
Offsetting
FA + FL offset, net amount presented on statement when: legally enforceable right to offset, intends to settle on net basis, or realise asset and settle liability simultaneously
A financial instrument is an equity instrument if…
- No contractual obligation to deliver cash/other financial instrument.
- May be settled in issuer’s own equity instruments.
Tax Base Liability Definition
- CA - amount that will be deductible in future
* CA - revenue not taxable in future
Revenue
gross inflow of economic benefits during the period, arising in the course of ordinary activities, resulting in increases in equity, other than contributions from equity participants
Successful Efforts
limits asset recognition to those E&E costs likely to result in discovery of economically viable reserves
Comprehensive Income Approach
comprehensive income approach to profit measurement includes all changes in net assets (i.e. equity), other than transactions with owners (i.e. contributions and distributions to shareholders) - that is, it includes items that meed CF definition and recognition criteria for income and expense.
P/L + OCI
Error
omissions/misstatements from failure to use reliable info: which was available and could reasonably be expected to have been taken into account
e.g. mathematical error, oversight, fraud
