6586800
Description
Flashcards by kelly whittingham, updated more than 1 year ago
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Created by kelly whittingham
over 7 years ago
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| Question | Answer |
| the conceptual framework | The objective of general purpose financial reporting is to provide financial information about the reporting entity, that is useful to existing and potential investors , lenders and other creditors in making decisions about providing resources to the entity. |
| Measurements of Costs The framework identifies four possible measurement bases for assets | *Historical cost -historical cost measurements is simply the value of the asset at the cash amount it was purchased for *Current - This measurement uses the current replacement cost of the asset *Realisable Value - the net realisable value is the amount of cash you expect to receive from your assets *Present Value - All future cash inflows and outflows are discounted back to the present day using a rate of interest |
| Current Assets | Are ones that an entity expects to use within one years time from the reporting date and are held primarily for the purpose of trading |
| Non Current Assets | are those whose benefits are expected to last more than one year from the reporting date |
| The IASB Framework defines a liability as : | A present obligation of the entity arising from past events , the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits |
| Current Liability | is one which the entity expects to pay off within one year from the reporting date |
| Non current liability | is one which the entity expects to settle after one year from the reporting date |
| The IASB Framework defines equity interest as : | The residual interest in the assets of the entity after deducting all its liabilities Examples of Equity recognised in the financial statements include: *Share Capital * Share Premium * Retained Earnings * Revaluation Surpluses |
| The IASB defines income as: | Income is increases in economic benefits during the accounting period in the form of inflows or enhancement of assets other than those relating to contributions from equity participants |
| Common sources of income recognised in the financial statements | * Sales Revenue generated from the sale of a commodity *Interest received on a bank account * Dividend earned on entity's investment * Rentals received on property leased by the entity * Gain on re-valuations of company assets |
| The IASB defines an asset as : | A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity |
| Net realisable value | is the selling price less estimated costs of completion and costs to complete the sale |
| Tangible Asset | Held for use in the production or supply or services , for rental to others , or for administrative purposes |
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