GLOSSARY of Accounting Terms
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Joint venture |
A contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. |
GLOSSARY of Accounting Terms
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Joint venture |
A contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. |
GLOSSARY of Accounting Terms
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Income |
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. |
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Intangible asset |
An identifiable non-monetary asset without physical substance. |
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Interim financial report |
A financial report containing either a complete set of financial statements or a set of condensed financial statements for an interim period. |
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Interim period |
A financial reporting period shorter than a full financial year. |
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Inventories |
Assets:
Inventories encompass goods purchased and held for resale including, for example, merchandise purchased by a retailer and held for resale, or land and other property held for resale. Inventories also encompass finished goods produced, or work in progress being produced, by the entity and include materials and supplies awaiting use in the production process. In the case of a service provider, inventories include the costs of the service for which the entity has not yet recognised the related revenue. |
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Investing activities |
The acquisition and disposal of long-term assets and other investments not included in cash equivalents. |
GLOSSARY of Accounting Terms
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Historical cost |
A measurement basis according to which 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. |
GLOSSARY of Accounting Terms
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Historical cost |
A measurement basis according to which 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. |
GLOSSARY of Accounting Terms
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Gains |
Increases in economic benefits and as such are no different in nature from revenue. |
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Going concern |
The financial statements are prepared on a going concern basis unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative but to do so. |
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Goodwill |
Future economic benefits arising from assets that are not capable of being individually identified and separately recognised. |
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Group |
A parent and all its subsidiaries. |
GLOSSARY of Accounting Terms
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FIFO (first-in, first-out) |
The assumption that the items of inventory that were purchased or produced first are sold first, and consequently the items remaining in inventory at the end of the period are those most recently purchased or produced. |
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Finance lease |
A lease that transfers substantially all the risks and rewards incident to ownership of an asset. Title may or may not eventually be transferred. |
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Foreign currency |
A currency other than the functional currency of the entity. |
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Foreign currency transaction |
A transaction that is denominated in or requires settlement in a foreign currency. |
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Foreign operation |
An entity that is a subsidiary, associate, joint venture or branch of the reporting entity, the activities of which are based or conducted in a country other than the country of the reporting entity. |
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Functional currency |
The currency of the primary economic environment in which the entity operates. |
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Future economic benefit |
The potential to contribute, directly or indirectly, to the flow of cash and cash equivalents to the entity. The potential may be a productive one that is part of the operating activities of the entity. It may also take the form of convertibility into cash or cash equivalents or a capability to reduce cash outflows, such as when an alternative manufacturing process lowers the costs of production. |
GLOSSARY of Accounting Terms
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Economic life |
Either:
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Equity |
The residual interest in the assets of the entity after deducting all its liabilities. |
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Events after the balance sheet date |
Those events favourable and unfavourable, that occur between the balance sheet date and the date when the financial statements are authorised for issue. Two types of events can be identified:
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Exchange difference |
The difference resulting from translating a given number of units of one currency into another currency at different exchange rates. |
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Exchange rate |
The ratio of exchange for two currencies. |
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Expenses |
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. |
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Depreciation (amortisation) |
The systematic allocation of the depreciable amount of an asset over its useful life. [ In the case of an intangible asset, the term ‘amortisation’ is generally used instead of ‘depreciation’. The two terms have the same meaning. ] |
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Dividends |
Distributions of profits to holders of equity investments in proportion to their holdings of a particular class of capital. |
GLOSSARY of Accounting Terms
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Capital |
Under a financial concept of capital, such as invested money or invested purchasing power, the net assets or equity of the entity. The financial concept of capital is adopted by most entities. Under a physical concept of capital, such as operating capability, the productive capacity of the entity based on, for example, units of output per day. |
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Capitalisation |
Recognising a cost as part of the cost of an asset. |
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Cash Equivalents |
Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. |
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Cash flows |
Inflows and outflows of cash and cash equivalents |
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Consolidated financial statements |
The financial statements of a group presented as those of a single economic entity. |
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Cost |
The amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction, or, when applicable, the amount attributed to that asset when initially recognized in accordance with the specific requirements of other FRSs, eg |
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Cost of inventories |
All costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition |
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Cost of purchase |
All of the purchase price, import duties and other taxes (other than those subsequently recoverable by the entity from the taxing authorities), and transport, handling and other costs directly attributable to the acquisition of the item. Trade discounts, rebates and other similar items are deducted in determining the costs of purchase. |
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Current Asset |
An asset which satisfies any of the following criteria:
it is cash or a cash equivalent (as defined in |
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Current liability |
A liability that satisfies any of the following criteria:
All other liabilities shall be classified as non-current. |
GLOSSARY of Accounting Terms
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Basic earnings per share |
Profit or loss that is attributable to ordinary equity holders of the parent entity (the numerator) divided by the weighted average number of ordinary shares outstanding during the period (the denominator). |
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Borrowing costs |
Interest and other costs incurred by an entity in connection with the borrowing of funds. |
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Business |
An integrated set of activities and assets conducted and managed for the purpose of providing: a return to investors; or lower costs or other economic benefits directly and proportionately to policyholders or participants. A business generally consists of inputs, processes applied to those inputs, and resulting outputs that are, or will be, used to generate revenues. If goodwill is present in a transferred set of activities and assets, the transferred set shall be presumed to be a business. |