Term
| rev recognition criteria ASPE 3400 |
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Definition
-performance is complete( risks and rewardss transferred, significant acts performed)
-consideration is measurable
-collection reasonably assured |
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Term
| rev rec criteria IFRS IAS 18 |
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Definition
| - risks and rewards of ownership have transferred -entity has no effective control over the goods sold -economic benefits will probably flow to the entity -costs incurred can be measured reliably |
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Term
| rev rec performance criteria (ASPE) |
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Definition
-persuasive evidence of arrangment exists
-delivery has occured
-price to buyer is fixed |
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Term
| rev rec returns (ASPE and IFRS) |
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Definition
- if significant and unpredictable amounts of goods being returned, do not recognize revenue
-if reliable, estimate and record provision for returns |
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Term
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Definition
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Term
| rev multiple deliverables IFRS |
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Definition
-seperate deliverables would not be recognized as one revenue unit but would be recognized based on revenue stream
- identify the separate components of the transaction
-identify the FV of each component (FV) or residual method of allocation |
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Term
| Revenue -services and long term contracts framework |
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Definition
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Term
| Government assistance HB section |
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Definition
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Term
| Construction contracts HB section |
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Definition
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Term
| Liability characteristics |
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Definition
- duty to other requiring future settlement of assets or provisions
-cant avoid duty
-event that caused obligation has occurred |
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Term
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Definition
- payable within 1 year from the BS date or within normal operating cycle
- deferred revenue due within 1 year or normal op cycle
- obligations where contractual arrangements have been made for settlement from non current assets should be excluded from current liabilities |
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Term
| Asset Retirement Obligation HB section |
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Definition
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Term
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Definition
- future benefit
- entity has control
- result of a past transaction |
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Term
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Definition
- value at lower of cost and NRV
-NRV= estimated selling price less selling costs
- cost comprises of direct fixed and VC and direct OH (admin OH not included)
-Must use FIFO or weighted average, LIFO not permitted |
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Term
| Discontinued Ops HB section |
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Definition
- IFRS 5 - 31,32,33
-ASPE 3475 - .03,.30 |
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Term
| Assets held for sale HB section |
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Definition
- IFRS 5 - 06,07,08,15
-ASPE 3475 - .04,.08,.13 |
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Term
| Investment property HB section |
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Definition
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Term
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Definition
-land or building held to earn rentals or capital appreciations rather than for use in the production or supply of goods/services
-recognize if probable future economic benefits will flow to the entity and costs can be reliably measured
-record at cost plus directly attributable exp when acquired
- after initial recognition, can choose either cost or FV
- properties are not amortized but must be tested for impairment |
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Term
| Intangible Assets HB sections |
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Definition
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Term
| Intangible assets criteria |
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Definition
-embody a future economic benefit
- result of a past transaction
- controlled by the entity
- identifiable from the entity and can be sold or arises from contractual legal rights |
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Term
| Internally generated intangible assets ASPE |
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Definition
-R&D costs are expensed
-accounting policy choice to capitalize or expense development costs- must apply to all projects
-development costs can be capitalized if all criteria for development stage is met:
a) technically feasible
b) availability of adequate technical, financial and other resources
c) intentiion to complete
d) ability to use or sell/existing market
e) ability to reliably measure costs
f) probable future economic benefits |
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Term
| Internally generated intangible assets IFRS |
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Definition
-NO option - development costs must be capitalized
- Development phase reached when 6 conditions met:
a) Feasability
b) Ability
c) Intent
d) Resources
e) measurable
f) Economic benefit
- only direct costs can be capitalized
- expenses that cannot be capitalized
--> (selling, admin and OH, inefficiencies, staff training)
- prohibits reinstatement of costs incurred previously recognized as expense |
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Term
| Goodwill and intangible assets amortization ASPE |
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Definition
- similar to IFRS
- no requirement of annual impairment testing of goodwill or intangibles |
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Term
| Goodwill and intangible assets amortization IFRS |
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Definition
No reversal of goodwill impairment under ASPE or IFRS
- Intangible amortized over estimated use life unless considered to have an indefinite life
-assets with indefinite lives not to be amortized unless life no longer considered indefinite (should still be tested for impairment)
-method and useful life reviewed annually |
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Term
| Impairment of long lived assets HB section |
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Definition
-ASPE
-IAS 36--09,10,12,18 |
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Term
| Impairment of long loved assets steps ASPE |
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Definition
1-group asset with other assets to form group at lowest level that generates cash flow (CGU)
2- determine if factors indicating impairment exist
3-calculate impairment by comparing NBV to NRV (FV less costs to sell or undercounted cash flows + residual value)
- cannot reverse write downs |
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Term
| Impairment of long loved assets steps IFRS |
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Definition
1- Assess whether there is any indication that an asset may be impaired (internal / external )
2- regardless of whether there are indicators, must test the following impairment annually:
a) intangible asset with an indefinite useful life or an intangible asset not yet available for use
b) goodwill
3) determine if asset is part of a CGU or individual asset.
4) determine RECOVERABLE AMOUNT = higher of
a) FV less costs to sell
b) discounted future cash flows
5) If recoverable amount subsequently increases, can reverse impairment loss to extent previously recorded.
Note goodwill can never be reversed |
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Term
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Definition
Internal: change in use, phase out, new technology, change in cost structure, obsolescence, or physical damage, economic performance or physical damage
External: decreases in market price, change in industry demand, change in technology |
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Term
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Definition
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Term
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Definition
-capitalize betterment: enhances service potential, useful life is extended or quality of output improved
-expense R&M |
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Term
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Definition
- cost is amount of consideration given up to acquire, construct, develop, or better an item of PP&E
- includes installation and costs to prepare asset for intended use |
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Term
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Definition
After initial recognition at cost, PP&E can be accounted for using the cost or revaluation model:
Cost model- carried at cost less accumulated amortization and impairment
Revaluation model for PPE whose:
- FV can be reliably measured and its more reflective of value of asset
- client wants expects value to increase and wants stronger balance sheet
- should be done with sufficient regularity to ensure the CA does not differ from the FV.
-All items in the same class are revalued at the same time
-Suplus or deficit arising on revaluation should be recognized as follows:
---> surplis - credit to OCI unless surplus reverses a previous deficit, then can charge to net income to extent of any previous deficit
--> deficit credit to profit / loss unless deficit reverses previous surplus in which case charged to OCI to use up any previous surplus |
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Term
| PPE depreciation HB section |
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Definition
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Term
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Definition
- allocated on a systematic basis over an assets useful life
-deprecaition begins when asset is available for use
-deprecaition ceases when an asset is classified as held for sale or derecognized
-dep doesn't cease when an asset becomes idle or retied from active use
- residual value and useful life should be reviewed annually - changed are accounted for prospectively as it is a change in estimate
deprecation methods:
-SL
-Output
-Declining balance |
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Term
| Capital Lease criteria (ASPE section 3065) |
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Definition
meet one of the criteria:
1- transfer of ownership or BPO
2- lease term at least 75% of the economic life as asset
3- PV of minimum lease payment at least 90% of FV of leased asset (discount rate = lower of borrowing rate or implicit rate)
-record value at PV of payments |
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Term
| Types of Capital Leases (lessor) ASPE 3065 |
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Definition
Sales Type leases
-arise when a dealer uses leasing as a way to sell its products
-record as sale
Direct Financing Lease
-usuallyarise when lessor acts as intermediary between manufacturere and leesee
-at incpetion , FV of leased PPE is = to its CV
-inital entry to dr lease receivable (pymts * N + residual value) cr FV of equipment leesed and plug cr to difference between lease rec and CV as unearned finance income
- finance income will be recognized each year |
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Term
| Foreign Currecny Transalation (ASPE 1651) |
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Definition
-transalate monetary items at BS rate
-translate non monetary items at historica rate
-transalte transactions using the rate at the time of transaction
FX gains and losses to be included in net income |
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Term
| Foreign Translation of Foreign OPS (ASPE 1651) |
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Definition
Integrated foreign operation - a foreign op that is financially and or operataiionally interdependent with the reporting entity
- exposure to FX rate changes is similar to reprting entity
- USE TEMPROAL METHOD
Sels sustating foreign operations- foreign ops that is financially independent of reporting entity
-exposure toFX changes is limited to net invesment
-use CURRENT RATE method |
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Term
| foreign translation (temporal method) |
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Definition
Used for integrated foreign Ops
-CND $ unit of measure
-monetary items translated at spot rate
-non monetary items translated at historical rate unless carried at market
-revenues and expenses translated at date they occured excpet amor
-amort use rate of related assets
-FX gains and losses are included in income |
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Term
| Foriegn translation (current rate method) |
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Definition
- foreign $ unit of measure
-assets and liabilites are translated at spot
- rev and expenses translated at rate they occrued
-exchange gains and losses are inluded in equity (no income effect) |
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Term
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Definition
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Term
| determining functional currency IAS 21 |
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Definition
Primary factors:
- currecny that influences sales price
- currecy that influences competeitive and regulatory sales
-currency that influences labour and COGS
secondary factors
- currecy of financing activities
-currency of bank accounts |
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Term
| Subsidiaries ASPE 1590.15.16 |
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Definition
- IF sub is controlled:
- can use consolidation, equity, or cost method
-cant use cost method if sub quoted on active market |
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Term
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Definition
IFRS requires consolidation if control.
Control defined if investor has following:
-power over investee
-exposire, rights, variable returns from its involvment with the investee
-ability to use its power over the investtee to affect amount of the investors return
IFRS would require to disclose:
-NCI in equity section
-Profit or loss attributable to NCI and owners of parent
-Total comprehensive income of NCI and owner of parent |
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Term
| Joint Venture (ASPE 3055) |
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Definition
- JV would make accounting policy choice to account for it interest in joint venture using :
Prop Con, equity, cost
- need to present seprately in BS and IS for both JV's and sub's if cost and equity method used. |
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Term
| Joint Arrangements (IFRS 11) |
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Definition
2 classifications
- Joint operation- parties have the right to assets and obligations relating to the arragment:
--use Prop Con approach
Joint Venture- have rights to net assets of arrangements, structured through seperate entity:
-->account as investment using equity method.
classification depends on rights and obligatoins of the parties to the arrangment |
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Term
| Investments (ASPE 3051 and 3856.11-.15) |
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Definition
investment subject to significant influence can be accounted for using the equity or cost method
-invesemtnes without sign influence :
not quaoted on active market accounted for using cost method
-quoted on active market use FV
- irrovocable policy once made on all investment accounting policy |
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Term
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Definition
significant influence --> equity method
indicators of significant influence:
-20-50% ownership
- investor particiapation in decisions
- BOD rep
-investor provided resources |
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Term
| Investments ( IAS 28) Equity method |
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Definition
-include share of affiliate income on income statemetn as income from investment
-share of comp income presented in OCI
-investment in affiliate asset repoted at cost + net income -dividends received
-disclose any losses noted that are not recognized
-loss of significant influence :
remeasure at FV
Specific excpetion to not use equity method:
- classified as non current held for sale
-wholly or partially owned subsidiary
-seperate financial statments |
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Term
| Compund Financial Instruments ASPE 3865.21,.31 |
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Definition
compund financial instruments have both
-liability and equity instrument
Under ASPE 2 accpetable mthods:
- measure equity compenant at 0 and entire proceeds of issue are allocated to liability component
-the less easily measurable compenent is allocated the residual after deducting the separtely determined componenet from the entire proceeds |
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Term
| Financial instruments IFRS IAS 32 |
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Definition
most noteably , IFRS does not allow for the total equity classification of redeemable preferred shares issued as part of tax planning strategy or total debt classification of comound financial instruments
-convertible debenture should be evaluated to classify seperate liability and equity componenets
-inital measurment : if has both aspects of debt and equity classify separately. |
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Term
| Financial instruments - impairment |
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Definition
Tested for impairment at the end of each reporting period
-where impariment exists , reduce the CV to the highest of:
-PV of cash flows expected from holding asset
-NRV
-Amount entity expects to reliazed |
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Term
| Financial instruments classification |
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Definition
financial assets classified in one of 4 categories:
-FV through P&L
-HTM
-Loans and rec
-AFS |
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Term
| Related Party transactions ASPE 3840 |
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Definition
one party has the ability to excersize control or influence over another
-transactions should be recorded at Carrying amount
exception: transaction has commercial substance and carried out in normal course of operations (ie same business) - record at the exchange amount of consideration agreed to between the related parties
IE- if in the normal course of business then transaction should reflect the amount of consideration given up, but if not in normal course of business then transaction takes place at CA and would essentailly be a transfer of assets |
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Term
| Related Party transactions IAS 24 disclosures |
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Definition
-relationship between the realted parties irrespective is trasnactions have occured between the 2.
-disclose key managment personnel compensation for each category:
short term benefits,post employment benefits, other long term benefits, termination benefits, share based payment
-nature of the related party, outstanding balances, and amounts of transactions, the terms and conditions, provisions or doubtful debts due from related parties |
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Term
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Definition
-interest and financing costs that an entity incurs in connection with the borrowing of funds
-capitalize borrowing costs that are directly attributable to the acquaitions, construction or production of a qualifying asset |
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Term
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Definition
occur between the YE dat and the date the FS is signed off by the auditor
Two types of subsequent events:
type A - those which affect the financials existing at or before FS date. need to adjust financials
type B- conditions that arose after the F?S date-> disclose if signifant impact
disclosre:
description and nature of event
-estimate financial effect
-IFRS also requires date wen the statments authorized, and who gave authorization |
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