Please enable JavaScript.
Coggle requires JavaScript to display documents.
Conceptual Framework Discussion, (Measurement Uncertainty), (Existence…
Conceptual Framework Discussion
ASSET
NB NB CONCLUDE
Faithful Representation
Relevance
Recognition:
Note that when a Question asks for "recommendation/Advice on appropriate Acc treatment," you need to explore all possibilities. For example,
Theory ---> Asset only recognised if it meets the recognition Criteria
If Def of Asset & Recognition criteria is met. Explore the class of assets (Inventory, IA, PPE, IP, FA)
Past Event --> Date NB if applicable
If it's a Group explore if it is a subsidiary, Associate, Joint venture or Joint Operation or merely a Financial Asset Investment
Control --> Legal title can give control
Potential --> NB to mention CashFlows (Examples)
Right --> Is it established Legally or contractually? Example of how?
4 things to discuss:
Def Theory: Par 4.3 together with par 4.4
LIABILITY
Transfer Economic Benefits
CashFlows (NB Examples)
Has no practical ability to avoid (If enforced by law or in the public interest or avoid by liquidating)
Past Event
Either legal or constructive (Prove this)
Taken action?
Obligation
Or already obtained Economic Benefits?
3 Things to discuss:
NB to note that past event creates PRESENT OBLIGATION
Def Theory: Liability (4.26) + Obligation (4.29)
Present obligation can exist even if transfer will be in future (e.g. Provision)
NB NB to CONCLUDE
Recognition Criteria is same as Asset,
except for Relevance we prove if OUTFLOW is probable
Qualitative Characteristics
Complete depiction:
Include all descriptions & explanations
3 things: Only discuss the relevant one
FAITHFUL REPRESENTATION (NB)
Neutrality
Prudence should be exercised if there is uncertainty
Ensure no Overstatements or Understatements
Info must be & is Only relevant if material
Free from Error
RELEVANCE (NB)
If estimates were made, they should be represented/stated that they are estimates (Faithful representation)
Chapter 2
Measurement uncertainty? It does not prevent an estimate from providing useful information (Link with Level 3 Fair Value)
Comparability, Verifiability, Understandability & Timeliness are enhancing QC
Include Qualitative Characteristics if Q asks to discuss " conceptually" and/or has very high marks
EXTRA
Accrual basis can be added if appliccable
Measurement Uncertainty
Existence Uncertainty? -> Right is present & it exists
Materiality: Qualitative if need to know of existence & Quantitative
Predictive Value, Confirmative value /Both?
Inflow of economic benefits? Are they probable?