This document discusses the objective and qualitative characteristics of financial statements. Some key points:
1. The objective of financial statements is to provide information about an entity's financial position, performance and cash flows that is useful for economic decision-making.
2. For information to be useful, it must be relevant, reliable, understandable, comparable and able to be verified. There must also be a balance between benefit and cost.
3. The elements of financial statements that are recognized are assets, liabilities, equity, income and expenses. An item meets the definition of an element if it is probable future benefits will flow to the entity and its cost can be measured reliably.
What Plan Fiduciaries can Expect with 404(a)(5) DisclosuresBroadridge
This document discusses the Department of Labor's 404(a)(5) disclosure regulations for participant-directed retirement plans. The regulations aim to provide plan participants with sufficient information about fees, expenses, and investment options so they can make informed decisions. Key requirements include disclosing:
1) General plan information like investment instructions and restrictions
2) Administrative and individual expenses allocated to participant accounts
3) Investment-related information for each option like name, type, performance history, benchmarks, and fees.
Plan administrators must provide this information initially and annually, as well as upon request or if any details change. The regulations seek to help participants while not overburdening plan administrators by allowing reliance on information from service
This document outlines the Framework for the Preparation and Presentation of Financial Statements established by the International Accounting Standards Board (IASB).
The framework provides guidance on the objective of financial statements, the underlying assumptions used in preparing them, qualitative characteristics that make the information useful, and the elements that financial statements are comprised of. It also covers recognition criteria, measurement bases, and concepts of capital and capital maintenance. The framework aims to promote harmonization and is used in developing accounting standards.
Data Integration for FDIC loss share assistsBrett Rosynek
The document discusses the challenges of integrating and reporting data from loss-sharing agreements between acquiring banks and the FDIC after failed bank acquisitions. It outlines key requirements for loss-sharing agreements, including monthly and quarterly loan loss reporting. Acquiring banks face complications integrating loan data from multiple legacy systems, ensuring data quality, and adapting to changing FDIC requirements over time. A strategic, coordinated approach is needed to effectively manage loan portfolio data integration for FDIC reporting and future acquisitions.
This document defines various terms related to personal finance. It provides definitions for terms like accountant, annual fee, annual percentage rate, asset, automated teller machine, automatic bill paying, balanced budget, bank, bank register, bankruptcy, bond, blue chip stock, broker, budget, capital gain, cash value, certificate of deposit and more. The definitions cover topics in accounting, banking, credit, investing, taxes, and other areas of personal finance.
Manajemen NPL (Non Performing Loan) dan Strategy Asset RecoveryEMLI Indonesia
EMLI Training-Manajemen NPL (Non Performing Loan) dan Strategy Asset Recovery. Materi tersebut di sampaikan oleh Bapak Bachtiar Marbun yang telah memiliki pengalaman perbankan yang sangat luas baik di bidang operasional Bank maupun bidang marketing, melalui pengalaman perbankan diawali pada tahun 1988. Disamping itu beliau juga seorang praktisi Hukum sebagai partner pada sebuah Lawfirm di Jakarta. Sebagai pegiat di bidang pembiayaan, beliau didukung latar belakang pendidikan ekonomi dengan meraih Master in General Business dari Newport University, California, USA dan juga Sarjana Hukum disalah satu Universitas didalam negeri.
This document defines various terms related to banking and finance. It provides definitions for 76 terms in a table format with two columns - one listing the term and the other providing the definition. Some of the terms defined include acceptance letter, account balance, account statement, acquirer, active account, additional cardholder, administrative fee, advance EMI, affinity card, amortization, annual fee, annual percentage yield, and anywhere banking.
Financial institutions play an important role as financial intermediaries in the market by collecting funds from savers and channeling them to borrowers. They perform functions like accepting deposits from savers, providing commercial and real estate loans to investors, issuing mortgage loans secured by property, and issuing share certificates. Financial institutions work as intermediaries that connect the surplus and deficit units, distributing financial resources in a planned way and contributing to economic growth.
What Plan Fiduciaries can Expect with 404(a)(5) DisclosuresBroadridge
This document discusses the Department of Labor's 404(a)(5) disclosure regulations for participant-directed retirement plans. The regulations aim to provide plan participants with sufficient information about fees, expenses, and investment options so they can make informed decisions. Key requirements include disclosing:
1) General plan information like investment instructions and restrictions
2) Administrative and individual expenses allocated to participant accounts
3) Investment-related information for each option like name, type, performance history, benchmarks, and fees.
Plan administrators must provide this information initially and annually, as well as upon request or if any details change. The regulations seek to help participants while not overburdening plan administrators by allowing reliance on information from service
This document outlines the Framework for the Preparation and Presentation of Financial Statements established by the International Accounting Standards Board (IASB).
The framework provides guidance on the objective of financial statements, the underlying assumptions used in preparing them, qualitative characteristics that make the information useful, and the elements that financial statements are comprised of. It also covers recognition criteria, measurement bases, and concepts of capital and capital maintenance. The framework aims to promote harmonization and is used in developing accounting standards.
Data Integration for FDIC loss share assistsBrett Rosynek
The document discusses the challenges of integrating and reporting data from loss-sharing agreements between acquiring banks and the FDIC after failed bank acquisitions. It outlines key requirements for loss-sharing agreements, including monthly and quarterly loan loss reporting. Acquiring banks face complications integrating loan data from multiple legacy systems, ensuring data quality, and adapting to changing FDIC requirements over time. A strategic, coordinated approach is needed to effectively manage loan portfolio data integration for FDIC reporting and future acquisitions.
This document defines various terms related to personal finance. It provides definitions for terms like accountant, annual fee, annual percentage rate, asset, automated teller machine, automatic bill paying, balanced budget, bank, bank register, bankruptcy, bond, blue chip stock, broker, budget, capital gain, cash value, certificate of deposit and more. The definitions cover topics in accounting, banking, credit, investing, taxes, and other areas of personal finance.
Manajemen NPL (Non Performing Loan) dan Strategy Asset RecoveryEMLI Indonesia
EMLI Training-Manajemen NPL (Non Performing Loan) dan Strategy Asset Recovery. Materi tersebut di sampaikan oleh Bapak Bachtiar Marbun yang telah memiliki pengalaman perbankan yang sangat luas baik di bidang operasional Bank maupun bidang marketing, melalui pengalaman perbankan diawali pada tahun 1988. Disamping itu beliau juga seorang praktisi Hukum sebagai partner pada sebuah Lawfirm di Jakarta. Sebagai pegiat di bidang pembiayaan, beliau didukung latar belakang pendidikan ekonomi dengan meraih Master in General Business dari Newport University, California, USA dan juga Sarjana Hukum disalah satu Universitas didalam negeri.
This document defines various terms related to banking and finance. It provides definitions for 76 terms in a table format with two columns - one listing the term and the other providing the definition. Some of the terms defined include acceptance letter, account balance, account statement, acquirer, active account, additional cardholder, administrative fee, advance EMI, affinity card, amortization, annual fee, annual percentage yield, and anywhere banking.
Financial institutions play an important role as financial intermediaries in the market by collecting funds from savers and channeling them to borrowers. They perform functions like accepting deposits from savers, providing commercial and real estate loans to investors, issuing mortgage loans secured by property, and issuing share certificates. Financial institutions work as intermediaries that connect the surplus and deficit units, distributing financial resources in a planned way and contributing to economic growth.
An audit of a bank is different than other audits due to banks dealing in money as raw material and product. Banks must also comply with regulatory requirements. Major areas of a branch audit include loans, deposits, and banking operations. Loans are the largest asset and greatest risk exposure so internal controls are important. Common types of loans include overdrafts, cash finance, term loans, and export financing. Audit procedures involve verifying loan amounts, terms, and classifications.
this is a presentation about bank.basically it consist of saving account and current account. and features of bank account and purpose of creating a bank account.
The document discusses the scope and procedures for bank concurrent audits. It describes concurrent audits as intended to supplement internal bank checks, reduce the time between transactions and examination, and improve bank functioning. The scope includes verification of advances, deposits, housekeeping, revenue leakage, foreign exchange transactions, and other key areas. General audit procedures involve both on-site and off-site verification and documentation. Essential documentation and records for concurrent audits are also outlined.
This document provides an overview of the credit process at banks, outlining the key components and objectives. It discusses the importance of thoroughly analyzing the creditworthiness of borrowers by evaluating their industry, financial condition, management quality, and security. The credit initiation and analysis process is described as beginning with screening prospective customers, collecting data, analyzing risks, and structuring proposed credit facilities to minimize losses while maximizing profit. Key factors to consider include industry dynamics, the borrower's financial statements, management competence and reputation, and collateral liquidation value. A strong credit process focuses on understanding these credit foundations to determine repayment ability and risk.
This document provides an overview of banking management software. It defines banking as accepting deposits from the public that are repayable on demand. The primary functions of a bank include accepting deposits, advancing loans and credit, and facilitating investment. The document then describes the user authentication process and includes flow charts demonstrating how the software would allow users to perform tasks like opening a new account, making deposits and withdrawals, and modifying account details. It also provides examples of how the software could store customer and staff data and manage transactions.
SEC Study Financial Literacy of Retail InvestorsSteven Reta
This document summarizes a study by the SEC staff regarding financial literacy among investors as required by the Dodd-Frank Act. The study was based on research including a literature review by the Library of Congress, public comments, focus groups, and an online survey. Key findings include:
1) Existing studies show U.S. retail investors have weak understanding of basic financial concepts and lack knowledge to avoid fraud. Certain subgroups have even less knowledge.
2) Feedback and research identified methods to improve disclosure timing, content, and format including providing disclosures before decisions, using summaries and layered formats, and clear plain language.
3) Useful information for investors includes fees, performance, strategies, risks for financial products and intermedi
This document discusses the cash flow view of banks and non-deterministic cash flows. It notes that understanding cash flow behavior is key to managing bank liquidity and product pricing. There are three parameters that define a cash flow: amount, tenor, and currency. Time value and liquidity are two characteristics that define cash flow riskiness. The document outlines various bank balance sheet categories like retail loans, credit cards, deposits, etc. and how their cash flows are non-deterministic, deviating from contractual terms. It emphasizes analyzing non-maturing deposits, which have major implications for rate sensitivity and liquidity. Factors like product type, transactional nature, business segment, and deposit size drive depositor behavior and cash flow analysis
The document defines an audit report as a formal opinion issued by an auditor about an audit of a legal entity. It then outlines the objectives of the mini project, which are to understand how bank audits are conducted, the audit procedures of a bank branch, and the rules for auditing banks. It also provides details about the audit process for a bank, including pre-commencement work, understanding the business, developing an audit program and procedures, substantive testing and analytical procedures, and reporting. Finally, it summarizes the financial performance of Vijaya Bank for 2011-12.
Credit Suisse launched the Nature Conservation Notes in 2014 to provide market-rate returns while supporting sustainable agriculture and forest protection through investments in the Althelia Climate Fund and green bonds. The Notes offer a 6.5-year term with partial repayments after 3.5 years and exposure to a portfolio of high-quality green bonds alongside the Althelia Climate Fund's projects in countries like Brazil, Peru and Kenya. USAID provides a guarantee on up to 50% of potential losses from the Althelia Climate Fund. The document also outlines some other potential scalable instruments for mobilizing finance towards landscape initiatives and conservation.
Tausa Jones is seeking a position in mortgage servicing, underwriting support, or document review. She has over 20 years of experience in finance and mortgage industries. Her skills include bank reconciliation, accounting, auditing, mortgage loan software programs, and Microsoft Office programs. Currently she is a Business Analyst and Quality Assurance professional where she performs RESPA compliance reviews, front-end eligibility checks for loan modifications, and ensures calculations and documents are accurate before mailing. Previously she has held roles reconciling loan modifications, analyzing bankruptcy claims, auditing billing exceptions, and resolving research inquiries as an adjustment analyst.
The document discusses central banking, international banking and trade, international trade finance methods and instruments, and the roles of international financial institutions. It describes how central banks set monetary policy, act as currency authorities and bankers to governments. It outlines the purposes and duties of the National Bank of Ethiopia. It also explains different methods of international trade finance like letters of credit, drafts, and factors that influence choice of payment methods. Finally, it summarizes the roles of the IMF, World Bank and IFC in providing loans and stabilizing exchange rates and payments balances between countries.
The blog provide some key insights on the subject – as to how to compute EIR for fixed or floating rate instruments, how to compute EIR for products which involves both interest income and fee income, what are the challenges which banks might face while computing EIR, what are the operational simplifications which banks might consider while computing EIR.
The document discusses automating the corporate credit approval process. It describes how the current process is inefficient, involving multiple disparate systems and high operational costs. An automated solution is proposed to streamline the process, improve visibility and control, expedite loan applications, and ensure compliance. The key benefits of the solution include faster credit availability, reduced risks and costs, and an enhanced customer experience.
SEC Warns RIAs About Complying With The Custody RuleAdvisors4Advisors
SEC issues compliance alert after its Office of Compliance Inspections and Examinations (OCIE) found deficiencies that about of a third of RIAs with significant deficiencies were not complying with custody rules.
This document discusses various types and sources of working capital finance. It describes trade credit, cash credit/bank overdrafts, working capital loans, bill discounting, bank guarantees, letters of credit, and factoring as common types of working capital financing. Sources are categorized as spontaneous, short-term, or long-term, with spontaneous sources including trade credit, short-term including bank loans, and long-term including retained profits and share capital. The document provides details on each type and source.
The financial system of a country is crucial to its economic development by providing necessary financial inputs. It consists of institutions that mobilize savings from surplus units and transfer them to deficit units through financial markets and services. Financial markets can be classified as money markets which deal in short term assets, and capital markets which include primary markets for new securities and secondary markets for existing securities. Together these markets and their instruments such as shares, bonds, and deposits help circulate funds in an economy.
The document provides additional details and examples for categorizing operational risk losses according to the ORX taxonomy. It defines business lines, event types, products, processes, and other attributes. For each category, it lists the level 1 and level 2 codes and descriptions to clarify how to appropriately classify different loss events. Examples are also frequently provided to illustrate how certain events would be categorized.
BASEL III AND IFRS 9_ THEIR INTERSECTION AND IMPLEMENTATION CHALLENGES ON BAN...Stuart Croll
The document discusses the intersection and implementation challenges of Basel III and IFRS 9 for banks in South Africa. It notes that both regulations were introduced in response to the 2007-2009 financial crisis to strengthen the financial system. Basel III aims to improve capital adequacy, while IFRS 9 seeks to revamp impairment methodology and accounting practices. The research investigates how the two regulations relate and interact, as they concurrently impact banks. It finds that IFRS 9's more stringent impairment requirements decrease net income and retained earnings, compounding the need for additional capital to meet Basel III standards. This leaves banks needing to balance increasing provisions and retaining earnings in the transition period. Overall, the regulations are intended to decrease bank fragility through
Credit monitoring is the ongoing supervision of a loan account to ensure the borrower continues to meet the terms of the loan sanction. It helps maintain asset quality and prevent slippage into NPA status. There are four stages of monitoring - pre-sanction, post-sanction pre-disbursement, during disbursement, and post-disbursement. Regular inspections, financial statement reviews, and verifying end-use of funds are some key monitoring activities. Early warning signs like delays in submission of documents or frequent requests for extensions should trigger corrective actions like discussions with the borrower to resolve issues impacting the business.
Framework for the preparation and presentation of financial statements icaiyuvraj singh
This document outlines the objectives and scope of the Framework for the Preparation and Presentation of Financial Statements. It discusses the purpose of financial statements in providing useful information to users for economic decision making. Specifically, it aims to provide information about an entity's financial position, performance, and cash flows. It also establishes concepts such as accrual accounting, going concern assumption, consistency, understandability, relevance, reliability, and comparability that underlie the preparation of high-quality financial statements.
This document outlines the framework for preparing and presenting financial statements in the Philippines. It discusses the purpose and status of the framework, which is to assist various groups in developing accounting standards and interpreting financial statements. The framework also covers topics like the objective of financial statements, underlying assumptions, qualitative characteristics, elements of financial statements, and recognition and measurement principles. However, the framework itself does not define specific standards and can be overridden by Philippine Accounting Standards in cases of conflict.
An audit of a bank is different than other audits due to banks dealing in money as raw material and product. Banks must also comply with regulatory requirements. Major areas of a branch audit include loans, deposits, and banking operations. Loans are the largest asset and greatest risk exposure so internal controls are important. Common types of loans include overdrafts, cash finance, term loans, and export financing. Audit procedures involve verifying loan amounts, terms, and classifications.
this is a presentation about bank.basically it consist of saving account and current account. and features of bank account and purpose of creating a bank account.
The document discusses the scope and procedures for bank concurrent audits. It describes concurrent audits as intended to supplement internal bank checks, reduce the time between transactions and examination, and improve bank functioning. The scope includes verification of advances, deposits, housekeeping, revenue leakage, foreign exchange transactions, and other key areas. General audit procedures involve both on-site and off-site verification and documentation. Essential documentation and records for concurrent audits are also outlined.
This document provides an overview of the credit process at banks, outlining the key components and objectives. It discusses the importance of thoroughly analyzing the creditworthiness of borrowers by evaluating their industry, financial condition, management quality, and security. The credit initiation and analysis process is described as beginning with screening prospective customers, collecting data, analyzing risks, and structuring proposed credit facilities to minimize losses while maximizing profit. Key factors to consider include industry dynamics, the borrower's financial statements, management competence and reputation, and collateral liquidation value. A strong credit process focuses on understanding these credit foundations to determine repayment ability and risk.
This document provides an overview of banking management software. It defines banking as accepting deposits from the public that are repayable on demand. The primary functions of a bank include accepting deposits, advancing loans and credit, and facilitating investment. The document then describes the user authentication process and includes flow charts demonstrating how the software would allow users to perform tasks like opening a new account, making deposits and withdrawals, and modifying account details. It also provides examples of how the software could store customer and staff data and manage transactions.
SEC Study Financial Literacy of Retail InvestorsSteven Reta
This document summarizes a study by the SEC staff regarding financial literacy among investors as required by the Dodd-Frank Act. The study was based on research including a literature review by the Library of Congress, public comments, focus groups, and an online survey. Key findings include:
1) Existing studies show U.S. retail investors have weak understanding of basic financial concepts and lack knowledge to avoid fraud. Certain subgroups have even less knowledge.
2) Feedback and research identified methods to improve disclosure timing, content, and format including providing disclosures before decisions, using summaries and layered formats, and clear plain language.
3) Useful information for investors includes fees, performance, strategies, risks for financial products and intermedi
This document discusses the cash flow view of banks and non-deterministic cash flows. It notes that understanding cash flow behavior is key to managing bank liquidity and product pricing. There are three parameters that define a cash flow: amount, tenor, and currency. Time value and liquidity are two characteristics that define cash flow riskiness. The document outlines various bank balance sheet categories like retail loans, credit cards, deposits, etc. and how their cash flows are non-deterministic, deviating from contractual terms. It emphasizes analyzing non-maturing deposits, which have major implications for rate sensitivity and liquidity. Factors like product type, transactional nature, business segment, and deposit size drive depositor behavior and cash flow analysis
The document defines an audit report as a formal opinion issued by an auditor about an audit of a legal entity. It then outlines the objectives of the mini project, which are to understand how bank audits are conducted, the audit procedures of a bank branch, and the rules for auditing banks. It also provides details about the audit process for a bank, including pre-commencement work, understanding the business, developing an audit program and procedures, substantive testing and analytical procedures, and reporting. Finally, it summarizes the financial performance of Vijaya Bank for 2011-12.
Credit Suisse launched the Nature Conservation Notes in 2014 to provide market-rate returns while supporting sustainable agriculture and forest protection through investments in the Althelia Climate Fund and green bonds. The Notes offer a 6.5-year term with partial repayments after 3.5 years and exposure to a portfolio of high-quality green bonds alongside the Althelia Climate Fund's projects in countries like Brazil, Peru and Kenya. USAID provides a guarantee on up to 50% of potential losses from the Althelia Climate Fund. The document also outlines some other potential scalable instruments for mobilizing finance towards landscape initiatives and conservation.
Tausa Jones is seeking a position in mortgage servicing, underwriting support, or document review. She has over 20 years of experience in finance and mortgage industries. Her skills include bank reconciliation, accounting, auditing, mortgage loan software programs, and Microsoft Office programs. Currently she is a Business Analyst and Quality Assurance professional where she performs RESPA compliance reviews, front-end eligibility checks for loan modifications, and ensures calculations and documents are accurate before mailing. Previously she has held roles reconciling loan modifications, analyzing bankruptcy claims, auditing billing exceptions, and resolving research inquiries as an adjustment analyst.
The document discusses central banking, international banking and trade, international trade finance methods and instruments, and the roles of international financial institutions. It describes how central banks set monetary policy, act as currency authorities and bankers to governments. It outlines the purposes and duties of the National Bank of Ethiopia. It also explains different methods of international trade finance like letters of credit, drafts, and factors that influence choice of payment methods. Finally, it summarizes the roles of the IMF, World Bank and IFC in providing loans and stabilizing exchange rates and payments balances between countries.
The blog provide some key insights on the subject – as to how to compute EIR for fixed or floating rate instruments, how to compute EIR for products which involves both interest income and fee income, what are the challenges which banks might face while computing EIR, what are the operational simplifications which banks might consider while computing EIR.
The document discusses automating the corporate credit approval process. It describes how the current process is inefficient, involving multiple disparate systems and high operational costs. An automated solution is proposed to streamline the process, improve visibility and control, expedite loan applications, and ensure compliance. The key benefits of the solution include faster credit availability, reduced risks and costs, and an enhanced customer experience.
SEC Warns RIAs About Complying With The Custody RuleAdvisors4Advisors
SEC issues compliance alert after its Office of Compliance Inspections and Examinations (OCIE) found deficiencies that about of a third of RIAs with significant deficiencies were not complying with custody rules.
This document discusses various types and sources of working capital finance. It describes trade credit, cash credit/bank overdrafts, working capital loans, bill discounting, bank guarantees, letters of credit, and factoring as common types of working capital financing. Sources are categorized as spontaneous, short-term, or long-term, with spontaneous sources including trade credit, short-term including bank loans, and long-term including retained profits and share capital. The document provides details on each type and source.
The financial system of a country is crucial to its economic development by providing necessary financial inputs. It consists of institutions that mobilize savings from surplus units and transfer them to deficit units through financial markets and services. Financial markets can be classified as money markets which deal in short term assets, and capital markets which include primary markets for new securities and secondary markets for existing securities. Together these markets and their instruments such as shares, bonds, and deposits help circulate funds in an economy.
The document provides additional details and examples for categorizing operational risk losses according to the ORX taxonomy. It defines business lines, event types, products, processes, and other attributes. For each category, it lists the level 1 and level 2 codes and descriptions to clarify how to appropriately classify different loss events. Examples are also frequently provided to illustrate how certain events would be categorized.
BASEL III AND IFRS 9_ THEIR INTERSECTION AND IMPLEMENTATION CHALLENGES ON BAN...Stuart Croll
The document discusses the intersection and implementation challenges of Basel III and IFRS 9 for banks in South Africa. It notes that both regulations were introduced in response to the 2007-2009 financial crisis to strengthen the financial system. Basel III aims to improve capital adequacy, while IFRS 9 seeks to revamp impairment methodology and accounting practices. The research investigates how the two regulations relate and interact, as they concurrently impact banks. It finds that IFRS 9's more stringent impairment requirements decrease net income and retained earnings, compounding the need for additional capital to meet Basel III standards. This leaves banks needing to balance increasing provisions and retaining earnings in the transition period. Overall, the regulations are intended to decrease bank fragility through
Credit monitoring is the ongoing supervision of a loan account to ensure the borrower continues to meet the terms of the loan sanction. It helps maintain asset quality and prevent slippage into NPA status. There are four stages of monitoring - pre-sanction, post-sanction pre-disbursement, during disbursement, and post-disbursement. Regular inspections, financial statement reviews, and verifying end-use of funds are some key monitoring activities. Early warning signs like delays in submission of documents or frequent requests for extensions should trigger corrective actions like discussions with the borrower to resolve issues impacting the business.
Framework for the preparation and presentation of financial statements icaiyuvraj singh
This document outlines the objectives and scope of the Framework for the Preparation and Presentation of Financial Statements. It discusses the purpose of financial statements in providing useful information to users for economic decision making. Specifically, it aims to provide information about an entity's financial position, performance, and cash flows. It also establishes concepts such as accrual accounting, going concern assumption, consistency, understandability, relevance, reliability, and comparability that underlie the preparation of high-quality financial statements.
This document outlines the framework for preparing and presenting financial statements in the Philippines. It discusses the purpose and status of the framework, which is to assist various groups in developing accounting standards and interpreting financial statements. The framework also covers topics like the objective of financial statements, underlying assumptions, qualitative characteristics, elements of financial statements, and recognition and measurement principles. However, the framework itself does not define specific standards and can be overridden by Philippine Accounting Standards in cases of conflict.
This document provides an overview of a seminar on financial reporting practices. It defines financial reporting as communicating accounting information about a company to external users. The scope includes both general and special purpose financial reports presented annually or as needed. Companies typically present three major financial statements: the balance sheet, income statement, and statement of cash flows. The objectives, qualitative characteristics, and conceptual framework of financial reporting are also outlined. Key aspects covered include relevance, faithful representation, comparability, verifiability, and the balance between benefits and costs.
The document provides an overview of the IASB Conceptual Framework 2018, which was revised in March 2018. It summarizes the key topics covered in each of the 8 chapters of the framework. The chapters cover the objectives of financial reporting, qualitative characteristics of useful financial information, the elements of financial statements, recognition and derecognition, measurement, presentation and disclosure, and concepts of capital and capital maintenance. Key definitions and concepts introduced or revised in the 2018 framework include the definition of an economic resource, separate recognition criteria, and discussion of derecognition. The framework also describes the reporting entity and consolidated financial statements.
This document provides guidance on financial reporting and the preparation of general purpose financial statements. It discusses the objectives of financial reporting which is to provide useful information to decision makers and demonstrate accountability. The key components of financial statements are identified as the statement of financial position, statement of financial performance, statement of changes in net assets/equity, statement of cash flows, statement of comparison of budget and actual amounts, and notes to the financial statements. Qualitative characteristics like understandability, relevance, reliability, and comparability are also outlined.
This document provides an overview of the International Financial Reporting Standard (IFRS) for Small and Medium-sized Entities. It describes the intended scope of the standard for entities that do not have public accountability and publish general purpose financial statements. It defines small and medium-sized entities and provides examples of entities that would have public accountability. It also discusses topics such as the objective of financial statements for SMEs, qualitative characteristics of useful financial information, concepts of assets, liabilities, equity, income and expenses, and the criteria for recognition of items in the financial statements.
Importance of financial reporting analysisyashikagupta48
Financial reporting provides key financial metrics and insights into a company's revenues, expenses, profits, assets, and cash flows. It demonstrates the overall health of a company from a financial perspective. There are three main types of financial reports: the income statement, balance sheet, and cash flow statement. Financial reporting is important as it allows companies to comply with regulations, facilitates audits, and supports financial planning, benchmarking, and decision making for various stakeholders. Overall, financial reporting provides reliable and relevant financial information to stakeholders for purposes such as investment decisions, management accountability, and regulatory compliance.
International Financial Reporting Standard (IFRS) for
Small and Medium-sized Entities
The IFRS for SMEs is intended for use by small and medium-sized entities (SMEs). This section describes
the characteristics of SMEs.
Difference Between IASB And FASB conceptual framework Ro'ya Abd Elhafez
This document compares and contrasts the conceptual frameworks of the FASB and IASB. Some key differences include:
- The FASB framework includes more chapters and statements, while the IASB framework was revised in 2018 to its current form.
- Both frameworks identify similar fundamental concepts such as objectives of financial reporting, qualitative characteristics of useful information, elements of financial statements, and recognition and measurement criteria.
- However, the IASB framework provides more detailed guidance around presentation and disclosure, derecognition, and the definition of a reporting entity.
- The frameworks also take different approaches to concepts like the capital maintenance concept, with the FASB focusing on financial capital maintenance and the I
This document discusses concepts from SFAC 7 and 8 regarding accounting theory and measurement. It provides definitions and principles for key concepts such as present value, fair value, liability measurement, and asset measurement.
The goals of financial reporting according to SFAC 8 are to provide useful information to investors, creditors, and other users for decision making. Such information includes reporting on an entity's financial position and cash flows. Qualitative characteristics like relevance and reliability are also discussed.
SFAC 8 establishes that the fundamental qualitative characteristics for financial information are representation and relevance. Relevant information must be predictive of future outcomes or allow for performance evaluation. Representation means information is complete, neutral, and free from error.
This document provides an overview of chapter 1 of an accounting textbook, including a table of topics covered in the chapter and case/question assignments. It also includes sample solutions to codification exercises and answers to questions about the development of accounting standards and standard-setting bodies in the United States.
Provide a brief description of the qualitative characteristics of us.pdfudit652068
Provide a brief description of the qualitative characteristics of useful information including
relevance/materiality and the cost constraint.
Solution
The framework states that the users should be provided information which is relevant to them.
Too much information should be avoided, and similarly, too little information also may not help
the users. Information provided should be relevant to the decisions the various stakeholders need
to make. Information is considered relevant if it has some predictive or confirmatory value, or
both. The relevance of information is generally determined by its nature (i.e. what type of
information is being provided) and its materiality (discussed further below).
Information is material if omitting it or misstating it could influence the decisions of the users
that the users make on the basis of financial information about a specific reporting entity.
Materiality need not always be assessed in terms of quantum of the amounts involved. For eg. if
Directors remuneration paid is over the limits laid by the concerned corporate law in place even
by a small amount, such information indicates non compliance with the laws of land and hence,
though the amount concerned may not be significant, the information will still be considered to
be material
Faithful representation warrants that the financial statements should reflect information which is
complete, neutral and free from error. Further, the accounting for the particular transaction
should reflect the substance of the transaction, rather than the mere legal form, considering that
IFRS are meant to be principle-based standards.
A complete depiction includes all information necessary for a user to understand the
phenomenon being depicted, including all necessary descriptions and explanations.
A neutral depiction means that information must not be manipulated in any way in order to
influence the decisions of users. The recording and reporting of transactions should be free from
any individual bias.
Free from error means there are no errors or omissions in the description of the phenomenon and
no errors made in the process by which the financial information was produced. It does preclude
any inaccuracies from arising, particularly where estimates have to be made.
Substance over form, as per IASB, is implied in faithful representation of a transaction because
faithful representation is only possible if transactions are accounted for according to their
substance and economic reality.
The primary objective of the financial statements is to enable users to take varied decision. These
decisions often involve selection of one entity among various options available to the decision
maker, for eg. which entity to invest in out of multiple options available. This requires that the
financial statements of various entities must be comparable, i.e. similar items should look similar
and different items must look different.
Consistency, though related, is different from comparability.
(TCO 1) Who are the users of managerial accounting information- How do.docxdorisc7
(TCO 1) Who are the users of managerial accounting information? How does their use of accounting information differ from the users of financial accounting information?
Solution
Answer: Accounting information helps users to make better financial decisions. Users of financial information may be both internal and external to the organization.
Internal users (Primary Users) of accounting information include the following:
External users (Secondary Users) of accounting information include the following:
They use financial statements in order to satisfy some of their different needs for information. These needs include the following:
(a) Investors. The providers of risk capital and their advisers are concerned with the risk inherent in, and return provided by, their investments. They need information to help them determine whether they should buy, hold or sell. Shareholders are also interested in information which enables them to assess the ability of the enterprise to pay dividends.
(b) Employees. Employees and their representative groups are interested in information about the stability and profitability of their employers. They are also interested in information which enables them to assess the ability of the enterprise to provide remuneration, retirement benefits and employment opportunities.
(c) Lenders. Lenders are interested in information that enables them to determine whether their loans, and the interest attaching to them, will be paid when due.
(d) Suppliers and other trade creditors. Suppliers and other creditors are interested in information that enables them to determine whether amounts owing to them will be paid when due. Trade creditors are likely to be interested in an enterprise over a shorter period than lenders unless they are dependent upon the continuation of the enterprise as a major customer.
(e) Customers. Customers have an interest in information about the continuance of an enterprise, especially when they have a long-term involvement with, or are dependent on, the enterprise.
(f) Governments and their agencies. Governments and their agencies are interested in the allocation of resources and, therefore, the activities of enterprises. They also require information in order to regulate the activities of enterprises, determine taxation policies and as the basis for national income and similar statistics.
(g) Public. Enterprises affect members of the public in a variety of ways. For example, enterprises may make a substantial contribution to the local economy in many ways including the number of people they employ and their patronage of local suppliers. Financial statements may assist the public by providing information about the trends and recent developments in the prosperity of the enterprise and the range of its activities.
.
Solution manual for Auditing & Assurance Services A Systematic Approach 12th ...ssuserf63bd7
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This document discusses corporate financial reporting. It begins by explaining the conceptual bases and preparation of financial statements. It then describes the corporate financial reporting system and key concepts like measurement and disclosure. The principal financial statements of balance sheet, income statement, and cash flow statement are also outlined. Finally, it discusses the objectives of corporate financial reporting and identifies key users like investors, creditors, employees and governments. The overall goal is to provide useful information to help users make investment and economic decisions.
The document provides information on a conceptual framework for financial reporting, including:
- It includes tables classifying questions and assignments by topic and learning objective.
- It discusses the objectives of a conceptual framework, qualitative characteristics of accounting information like relevance and faithful representation, and the elements of financial statements.
- It also covers basic assumptions of accounting like going concern, principles like revenue and expense recognition, and constraints like materiality.
Internal.docRunning head Accounting information 1Acco.docxmariuse18nolet
Internal.doc
Running head: Accounting information
1
Accounting information
2
Accounting information
Student Name
University Name
Picket, n.d. defines internal controls as mechanisms to ensure objectives are achieved. Good controls encourage efficiency, compliance with laws and regulations, sound information, and seek to eliminate fraud and abuse. Internal control is also a process designed to provide assurance regarding the achievement of objectives in the effectiveness and efficiency of operations, reliability and internal and external reporting, and compliance with applicable laws and regulations and internal policies.
Everyone in the organization has some role to play in the organization’s internal control system. The board of directors is responsible for the company’s system of internal control and it sets appropriate policies on internal control and seek regular assurance to ensure that the system of internal control is effective in managing risks in the manner which it has approved. It is also the role of the management to implement board policies on risk and control and all the employees of an organization have some responsibility for internal control as part of their accountability for achieving objectives. Management also needs to review the effectiveness of internal control by forming its own view on effectiveness after due and careful enquiry based on the information and assurances provided to it.
A few examples of internal control activities are as follows: (1) Tracking of major agency achievements and comparing these to the plans, goals and established objectives by the management. (2) Establishing physical control to secure and safeguard vulnerable assets. (3) Use a variety of control activities in information processing. (4) There should be a proper execution of transactions by making sure they are authorized and executed only by persons
acting within the scope of their authority. (5) Segregate the key duties and responsibilities to reduce the risk of error or fraud. (6) Appropriate documentation of transactions and other
significant events and they should be readily available for examination. (7) Establish finance committee to spearhead planning and monitoring of financial activities and reporting. (8) Design an effective organizational structure that takes into account the culture of the organization which is critical for effective financial management. (9) Effective management controls which includes methods of financial planning and budgeting and reporting of actual results and follow-up of variances between budgeted and actual amounts.
There are two groups of users of accounting information: internal users and external users. The internal users are the company managers who use the accounting information to decide how to plan and control operations on a daily and long-term basis while the external users are the existing or the potential investors, creditors, analysts, financial advise.
In March 2014 the Financial Accounting Standards Board (FASB or Board) issued an exposure draft: Proposed Statement of Financial Accounting Concepts: Conceptual Framework for Financial Reporting, Chapter 8: Notes to Financial Statements. The exposure draft proposes a framework that the FASB will use to identify information that is most important to financial statement users of for-profit and not-for-profit entities’ financial statements, and to reduce unnecessary disclosures within those financial statements. Comments on the exposure draft are due July 14, 2014.
The disclosure framework project began in 2009 as an effort to create financial disclosures that are more effective, coordinated and less redundant. In 2012 the FASB issued an invitation to comment that outlined the objectives of the project’s two phases: the Board’s decision process and the entity’s decision process. The March 2014 exposure draft addresses the Board’s decision process phase of the project.
The document provides an introduction and background to a study on the sanctioning of term loans. It discusses the importance of the financial system and SME sector for economic development. The objectives of the project are to study the credit appraisal process for sanctioning term loans and working capital loans, understand the CMA data and financial analysis, and learn about the procedures at Bank of Baroda. It outlines the methodology, scope, limitations and structure of the banking industry in India. The major players, operations, and drivers of growth of the banking sector are also summarized.
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Conceptual frame work
1. Preface
The Board of IASC believes that financial statements prepared for this
purpose meet the common needs of most users. This is because
nearly all users are making economic decisions, for example, to:
(a) decide when to buy, hold or sell an equity investment;
(b) assess the stewardship or accountability of management;
(c) assess the ability of the entity to pay and provide other benefits to
its employees;
(d) assess the security for amounts lent to the entity;
(e) determine taxation policies;
(f) determine distributable profits and dividends;
(g) prepare and use national income statistics; or
(h) regulate the activities of entities.
1 08:22 ١٤٣٣/١١/٢٧
2. Purpose and status
assist preparers of financial statements in
applying International Accounting
Standards and in dealing with topics that
have yet to form the subject of an
International Accounting Standard;
2 08:22 ١٤٣٣/١١/٢٧
3. Scope
The Framework deals with:
(a) the objective of financial statements;
(b) the qualitative characteristics that determine
the usefulness of information in financial
statements;
(c) the definition, recognition and measurement of
the elements from which financial statements
are constructed; and
(d) concepts of capital and capital maintenance.
3 08:22 ١٤٣٣/١١/٢٧
4. Users and their information
needs
(a) Investors. The providers of risk capital and their
advisers are concerned with the risk inherent in, and
return provided by, their investments. They need
information to help them determine whether they should
buy, hold or sell. Shareholders are also interested in
information which enables them to assess the ability of
the entity to pay dividends.
(b) Employees. Employees and their representative groups
are interested in information about the stability and
profitability of their employers. They are also interested
in information which enables them to assess the ability of
the entity to provide remuneration, retirement benefits
and employment opportunities.
4 08:22 ١٤٣٣/١١/٢٧
5. Users and their information
needs
(c) Lenders. Lenders are interested in information
that enables them to determine whether their
loans, and the interest attaching to them, will be
paid when due.
(d) Suppliers and other trade creditors. Suppliers
and other creditors are interested in information
that enables them to determine whether
amounts owing to them will be paid when due.
Trade creditors are likely to be interested in an
entity over a shorter period than lenders unless
they are dependent upon the continuation of the
entity as a major customer.
5 08:22 ١٤٣٣/١١/٢٧
6. Users and their information
needs
(e) Customers. Customers have an interest in
information about the continuance of an entity,
especially when they have a long-term
involvement with, or are dependent on, the
entity.
(f) Governments and their agencies. Governments
and their agencies are interested in the
allocation of resources and, therefore, the
activities of entities. They also require
information in order to regulate the activities of
entities, determine taxation policies and as the
basis for national income and similar statistics.
6 08:22 ١٤٣٣/١١/٢٧
7. Users and their information
needs
g) Public. Entities affect members of the public in a
variety of ways. For example, entities may make
a substantial contribution to the local economy in
many ways including the number of people they
employ and their patronage of local suppliers.
Financial statements may assist the public by
providing information about the trends and
recent developments in the prosperity of the
entity and the range of its activities.
7 08:22 ١٤٣٣/١١/٢٧
8. The objective of financial
statements
1. The objective of financial statements is to provide information about the
financial position, performance and changes in financial position of an entity
that is useful to a wide range of users in making economic decisions.
2. Financial statements prepared for this purpose meet the common needs of
most users. However, financial statements do not provide all the information
that users may need to make economic decisions since they largely portray
the financial effects of past events and do not necessarily provide non-
financial information.
3. Financial statements also show the results of the stewardship of
management, or the accountability of management for the resources
entrusted to it. Those users who wish to assess the stewardship or
accountability of management do so in order that they may make economic
decisions; these decisions may include, for example, whether to hold or sell
their investment in the entity or whether to reappoint or replace the
management.
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9. Underlying assumptions
Accrual basis:
In order to meet their objectives, financial
statements are prepared on the accrual basis of
accounting. Under this basis, the effects of
transactions and other events are recognised
when they occur (and not as cash or its
equivalent is received or paid) and they are
recorded in the accounting records and reported
in the financial statements of the periods to
which they relate. Financial statements prepared
on the accrual basis inform users not only of
past transactions involving
9 08:22 ١٤٣٣/١١/٢٧
10. Underlying assumptions
Accrual basis:
the payment and receipt of cash but also of
obligations to pay cash in the future and of
resources that represent cash to be
received in the future. Hence, they provide
the type of information about past
transactions and other events that is most
useful to users in making economic
decisions.
10 08:22 ١٤٣٣/١١/٢٧
11. Underlying assumptions
Going concern:
The financial statements are normally prepared on
the assumption that an entity is a going concern
and will continue in operation for the foreseeable
future. Hence, it is assumed that the entity has
neither the intention nor the need to liquidate or
curtail materially the scale of its operations; if
such an intention or need exists, the financial
statements may have to be prepared on a
different basis and, if so, the basis used is
disclosed
11 08:22 ١٤٣٣/١١/٢٧
12. Qualitative characteristics of
financial statements
Understandability:
An essential quality of the information provided in financial
statements is that it is readily understandable by users.
For this purpose, users are assumed to have a
reasonable knowledge of business and economic
activities and accounting and a willingness to study the
information with reasonable diligence. However,
information about complex matters that should be
included in the financial statements because of its
relevance to the economic decision-making needs of
users should not be excluded merely on the grounds that
it may be too difficult for certain users to understand.
12 08:22 ١٤٣٣/١١/٢٧
13. Qualitative characteristics of
financial statements
Relevance:
To be useful, information must be relevant to the decision-making
needs of users. Information has the quality of relevance when it
influences the economic decisions of users by helping them
evaluate past, present or future events or confirming, or correcting,
their past evaluations.
The predictive and confirmatory roles of information are interrelated.
For example, information about the current level and structure of
asset holdings has value to users when they endeavour to predict
the ability of the entity to take advantage of opportunities and its
ability to react to adverse situations. The same information plays a
confirmatory role in respect of past predictions about, for example,
the way in which the entity would be structured or the outcome of
planned operations.
13 08:22 ١٤٣٣/١١/٢٧
14. Qualitative characteristics of
financial statements
Relevance:
Materiality
The relevance of information is affected by its nature and
materiality. In some cases, the nature of information
alone is sufficient to determine its relevance. For
example, the reporting of a new segment may affect the
assessment of the risks and opportunities facing the
entity irrespective of the materiality of the results
achieved by the new segment in the reporting period. In
other cases, both the nature and materiality are
important, for example, the amounts of inventories held
in each of the main categories that are appropriate to the
business.
14 08:22 ١٤٣٣/١١/٢٧
15. Qualitative characteristics of
financial statements
Reliability:
To be useful, information must also be reliable. Information has the
quality of reliability when it is free from material error and bias and
can be depended upon by users to represent faithfully that which it
either purports to represent or could reasonably be expected to
represent.
Information may be relevant but so unreliable in nature or
representation that its recognition may be potentially misleading. For
example, if the validity and amount of a claim for damages under a
legal action are disputed, it may be inappropriate for the entity to
recognise the full amount of the claim in the balance sheet, although
it may be appropriate to disclose the amount and circumstances of
the claim.
15 08:22 ١٤٣٣/١١/٢٧
16. Qualitative characteristics of
financial statements
Faithful representation
Substance over form
Neutrality
Prudence
Completeness
16 08:22 ١٤٣٣/١١/٢٧
17. Qualitative characteristics of
financial statements
Comparability:
Users must be able to compare the financial statements of
an entity through time in order to identify trends in its
financial position and performance. Users must also be
able to compare the financial statements of different
entities in order to evaluate their relative financial
position, performance and changes in financial position.
Hence, the measurement and display of the financial
effect of like transactions and other events must be
carried out in a consistent way throughout an entity and
over time for that entity and in a consistent way for
different entities.
17 08:22 ١٤٣٣/١١/٢٧
18. Constraints on relevant and
reliable information
Timeliness
Balance between benefit and cost
Balance between qualitative characteristics
In practice a balancing, or trade-off, between qualitative
characteristics is often necessary. Generally the aim is to
achieve an appropriate balance among the
characteristics in order to meet the objective of financial
statements . The relative importance of the
characteristics in different cases is a matter of
professional judgment.
18 08:22 ١٤٣٣/١١/٢٧
19. The elements of financial
statements
Assets: is 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.
Many assets, for example, property, plant and equipment,
have a physical form. However, physical form is not
essential to the existence of an asset; hence patents
and copyrights, for example, are assets if future
economic benefits are expected to flow from them to the
entity and if they are controlled by the entity.
19 08:22 ١٤٣٣/١١/٢٧
20. The elements of financial
statements
Assets:
Many assets, for example, receivables and property, are associated
with legal rights, including the right of ownership. In determining the
existence of an asset, the right of ownership is not essential; thus,
for example, property held on a lease is an asset if the entity
controls the benefits which are expected to flow from the property.
Although the capacity of an entity to control benefits is usually the
result of legal rights, an item may nonetheless satisfy the definition
of an asset even when there is no legal control. For example, know-
how obtained from a development activity may meet the definition of
an asset when, by keeping that know-how secret, an entity controls
the benefits that are expected to flow from it.
20 08:22 ١٤٣٣/١١/٢٧
21. The elements of financial
statements
Assets:
The assets of an entity result from past transactions or
other past events. Entities normally obtain assets by
purchasing or producing them, but other transactions or
events may generate assets; examples include property
received by an entity from government as part of a
programme to encourage economic growth in an area
and the discovery of mineral deposits. Transactions or
events expected to occur in the future do not in
themselves give rise to assets; hence, for example, an
intention to purchase inventory does not, of itself, meet
the definition of an asset.
21 08:22 ١٤٣٣/١١/٢٧
22. The elements of financial
statements
Liabilities: is a present obligation of the
entity arising from past events, the
settlement of which is expected to result in
an outflow from the entity of resources
embodying economic benefits.
22 08:22 ١٤٣٣/١١/٢٧
23. The elements of financial
statements
Liabilities:
An essential characteristic of a liability is that the entity has a present
obligation. An obligation is a duty or responsibility to act or perform
in a certain way. Obligations may be legally enforceable as a
consequence of a binding contract or statutory requirement. This is
normally the case, for example, with amounts payable for goods and
services received. Obligations also arise, however, from normal
business practice, custom and a desire to maintain good business
relations or act in an equitable manner. If, for example, an entity
decides as a matter of policy to rectify faults in its products even
when these become apparent after the warranty period has expired,
the amounts that are expected to be expended in respect of goods
already sold are liabilities.
23 08:22 ١٤٣٣/١١/٢٧
24. The elements of financial
statements
Liabilities:
Some liabilities can be measured only by using a substantial degree of
estimation. Some entities describe these liabilities as provisions. In
some countries, such provisions are not regarded as liabilities
because the concept of a liability is defined narrowly so as to
include only amounts that can be established without the need to
make estimates. The definition of a liability in paragraph 49 follows
a broader approach. Thus, when a provision involves a present
obligation and satisfies the rest of the definition, it is a liability even if
the amount has to be estimated. Examples include provisions for
payments to be made under existing warranties and provisions to
cover pension obligations.
24 08:22 ١٤٣٣/١١/٢٧
25. The elements of financial
statements
Equity:
is the residual interest in the assets of the
entity after deducting all its liabilities.
25 08:22 ١٤٣٣/١١/٢٧
26. Performance
Income is increases in economic benefits during the
accounting period in the form of inflows or
enhancements of assets or decreases of liabilities
that result in increases in equity, other than those
relating to contributions from equity participants.
Expenses are decreases in economic benefits during the
accounting period in the form of outflows or depletions of
assets or incurrences of liabilities that result in
decreases in equity, other than those relating to
distributions to equity participants.
26 08:22 ١٤٣٣/١١/٢٧
27. Recognition of the elements of
financial statements
An item that meets the definition of an
element should be recognised if:
(a) it is probable that any future economic
benefit associated with the item will flow to
or from the entity; and
(b) the item has a cost or value that can be
measured with reliability.
27 08:22 ١٤٣٣/١١/٢٧
28. Reliability of measurement
The second criterion for the recognition of an item is that it
possesses a cost or value that can be measured with
reliability as discussed in paragraphs 31 to 38 of this
Framework. In many cases, cost or value must be
estimated; the use of reasonable estimates is an
essential part of the preparation of financial statements
and does not undermine their reliability. When, however,
a reasonable estimate cannot be made the item is not
recognised in the balance sheet or income statement.
For example, the expected proceeds from a lawsuit may
meet the definitions of both an asset and income as well
as the probability criterion for recognition; however, if it is
not possible for the claim to be measured reliably, it
should not be recognised as an asset or as income; the
existence of the claim, however, would be disclosed in
the notes, explanatory material or supplementary
schedules.
28 08:22 ١٤٣٣/١١/٢٧
29. Measurement of the elements of
financial statements
Historical cost. Assets are recorded at the amount
of cash or cash equivalents paid or the fair value
of the consideration given to acquire them at the
time of their acquisition. Liabilities are recorded
at the amount of proceeds received in exchange
for the obligation, or in some circumstances
(for example, income taxes), at the amounts of
cash or cash equivalents expected to be paid to
satisfy the liability in the normal course of
business.
29 08:22 ١٤٣٣/١١/٢٧
30. Measurement of the elements of
financial statements
Current cost. Assets are carried at the
amount of cash or cash equivalents that
would have to be paid if the same or an
equivalent asset was acquired currently.
Liabilities are carried at the undiscounted
amount of cash or cash equivalents that
would be required to settle the obligation
currently.
30 08:22 ١٤٣٣/١١/٢٧
31. Measurement of the elements of
financial statements
Realisable (settlement) value. Assets are
carried at the amount of cash or cash
equivalents that could currently be
obtained by selling the asset in an orderly
disposal. Liabilities are carried at their
settlement values; that is, the
undiscounted amounts of cash or cash
equivalents expected to be paid to satisfy
the liabilities in the normal course of
business.
31 08:22 ١٤٣٣/١١/٢٧
32. Measurement of the elements of
financial statements
Present value. Assets are carried at the
present discounted value of the future
net cash inflows that the item is expected
to generate in the normal course of
business. Liabilities are carried at the
present discounted value of the
future net cash outflows that are expected to
be required to settle the
liabilities in the normal course of business.
32 08:22 ١٤٣٣/١١/٢٧
33. Measurement of the elements of financial
statements
The measurement basis most commonly adopted by
entities in preparing their financial statements is
historical cost. This is usually combined with other
measurement bases. For example, inventories are
usually carried at the lower of cost and net realisable
value, marketable securities may be carried at market
value and pension liabilities are carried at their present
value. Furthermore, some entities use the current cost
basis as a response to the inability of the historical cost
accounting model to deal with the effects of changing
prices of non-monetary assets.
Note: this material has prepared based on IASC
Foundation Publications Department
33 08:22 ١٤٣٣/١١/٢٧