Definition of a derivative A derivative is a financial instrument or other contract within the scope of the IAS 39 with all three of the following characteristics: its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating […]

Embedded derivative concept: An embedded derivative is a component of a hybrid (combined) instrument that also includes a non-derivative host…

The equity method is a method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor’s share of net assets of the investee. The profit or loss of the investor includes the investor’s share of the profit or loss of the investee. Under the equity […]

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Net realisable value refers to the net amount that an entity expects to realise from the sale of inventory in the ordinary course of business. Fair value reflects the amount […]

Financial Autonomy Concept Financial autonomy indicates the part of the company’s total applications, namely goods and investment applications, financial applications, stocks applications, credit granted to clients, etc., which was supported by capitals owned by the company self, this is, the called equity. This concept is extremely useful on the long term financial risk evaluation since […]

According to IAS – International Accounting Standards, the financial statements are a structured representation of the financial position and financial performance of an entity. The objective of general purpose financial statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of […]

A financial asset means any asset that is money, equity instrument of another entity or a contractual right to receive cash.

According to the International Accounting Standards, Government assistance is action by government designed to provide an economic benefit specific to an entity or range of entities qualifying under certain criteria. Government assistance for the purpose of this standard does not include benefits provided only indirectly through action affecting general trading conditions, such as the provision […]

Presentation of IAS 1 – Presentation of Financial Statements This Standard prescribes the basis for presentation of…

International financial reporting standards (IFRSs) are standards and interpretations adopted by the International Accounting Standards Board (IASB). They comprise: (a) international financial reporting standards; (b) international accounting standards; and (c) interpretations originated by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).