TheobjectiveofgeneralpurposefinancialreportingObjective,usefulnessandlimitationsofgeneralpurposefinancialreporting‘Theobjectiveofgeneralpurposefinancialreportingisprovidefinancialinformationaboutthereportingentitythattoexistingandpotentialinvestors,lendersandothercreditorsinmakingdecisionsaboutprovidingresourcestotheentity.Thosedecisionsinvolvebuying,sellingorholdingequityanddebtinstruments,andprovidingorsettlingloansandotherformsofcredit.’Generalpurposefinancialreportsdonotandcannotprovidealloftheinformationthatexistingandpotentialinvestors,lendersandothercreditorsneed.ThereportingThissectionistobeaddedbytheIASBatalaterFinancialstatementsarenormallypreparedontheassumptionthatanentityisagoingconcernandwillcontinueinoperationfortheforeseeablefuture.FundamentalqualitativeInformationisrelevantifitwill madebyitsusers.Relevantinformationhaspredictivevalueorconfirmatoryvaluetoauser.Relevanceissupportedby Informationisregardedasmaterialifitsomissionorcouldinfluencethedecisionsmadebyusersofthat Anomissionormis-statementcouldbematerialduetoitssize Materilityisanentity-specificconsiderationandsothedoesnotspecifyaminimumForfinancialinformationtobefaithfullypresented,it fromerrorTherefore,itmustcompriseinformationnecessaryforaproperunderstanding,itmustbewithoutbiasormanipulationandclearlydescribedInformationismoreusefulifitcanbecomparedwithsimilarinformationaboutotherentities,oreventhesameentityoverdifferenttimeperiods.Consistencyofpresentationhelpstoachievecomparabilityoffinancialinformation.PermittingdifferentaccountingtreatmentsforsimilaritemsislikelytoreducecomparabilityTheFrameworkex insthatverifiabilitymeansthat“different,knowledgeableandindependentobserverscouldreachconsensus,althoughnotnecessarilycompleteagreement,thataparticularpresentationofanitemoritemsisafaithfulrepresentation(Framework,paraQC26).Verifiabilityoffinancialinformationprovidesassurancetousersregardingitscredibilityandreliability.Timeliness:havinginformationavailabletodecision-makersintimetobecapableofinfluencingtheirUnderstandability:classifying,characterisingandpresentinginformationclearlyandconcisely.InherentlycomplexphenomenashouldnothoweverbeexcludedasthereportswouldbepleteandpotentiallyThecostconstraintonusefulfinancialcoststoprovideandusethatAresource byanentityasaresultofpasteventsandfromwhichfutureeconomicbenefitsareexpectedtoflowtotheentity. oftheentityarisingfrompastevents,thesettlementofwhichisexpectedtoresultinanoutflowfromtheentityofresourcesembodyingeconomicbenefits.Theresidualinterestintheassetsofanentityafterdeductingallitsliabilities. Increase i economi benefitdurin th accountin perioi th for o inflow oenhancement o asset odecrease o liabilitie tharesul i increase i equityothe tha thos relatin tcontributions from equityparticipants. ExpenseDecrease i economibenefit durin th accountinperio i th for o outflowo depletion o asset oDOcostsincurredresultinthecontrolofaresource?EntityDisstreamliningitsoperations.ItdecidestomoveoneofitsfactoriestoAsia,toreduceoperatingcosts,andisabletoreducefuturecashoutflowsignificantlyby ngso.Redundancypaymentsweremadetoemployeescurrentllyworkinginthepresentfactoryaspartoftherelocationexercise.TheredundancypaymentsdonotgiveentityDcontroloveraresource,althoughItresultsinentityDreducingitsfuturecashoutflows.AnassetshouldonlyberecognisediftheentitycontrolscertainresourcesExGrangeanticipatesthatitwillbefined$1millionbythelocalregulatorforenvironmentalpollution.Italsoanticipatesthatitwillhavetopaycompensationtolocalresidentsof$6million,althoughthisisonlythebestestimateofthatliability.Inaddition,theregulatorhasrequestedthatcertainchangesbemadetothemanufacturingprocessinordertomaketheprocessmoreenvironmentallyfriendly.Thisisanticipatedtocostthe $4million.Anitemthatmeetsthedefinitionofanelementisitisthatanyfutureeconomicbenefitwiththeitemwillflowtoorfromtheentity;theitemhasacostorvaluethatcanbeRecognitionofanassetisprohibitedunderaspecificstandardEntityFisinthebeveragebusiness.Itsbrandisknownthroughouttheworld.brandcanbesoldandhasamarketManagementshouldnotrecognisethebrandasanasset,althoughitmeetsthedefinitionofone.Managementisprohibitedfromrecognisinginternallygeneratedbrands,mastheads,publishingtitles,customerlistsanditemssimilarinsubstance.TherecognitioncriteriaforintangibleassetsaremorenarrowlydefinedbyIAS38,limitingrecognitiontoassetsforwhichcostcanbemeasuredreliably,ratherthancostorvalue.Thecostcannotbedistinguishedfromthecostofdevelo thebusinessasawhole.Suchitemsarenotrecognisedasintangibleassets,asthecostcannotbereliablyWheresimilarassetsareacquiredfromathirdparty,theconsiderationgiventoacquirethoseassetsisdistinguishablefromthegeneralcostsofdevelo thebusinessasawholeandwould,therefore,berecognised,providedtheyalsomeetthecriteriaofcontrolandtheprobableflowoffutureeconomicbenefits.(7)oftheelementsoffinancialDefinesdifferentbasesofmeasurementoftheelementsoffinancialstatementsincludinghistoricalcurrentrealisablevalue;presentHistoricalcostisthebasismostcommonly(8)ConceptsofcapitalandcapitalDiscussesalternativecapitalmaintenanceconceptsThefinancialreportingframeworkTheobjectiveofgeneralpurposefinancialThereporting oftheelementsoffinancial ConceptsofcapitalandcapitalFinancialpositionapproach資產負債表觀——FinancialpositionapproacheIncreasesineconomicbenefitsduringtheaccountingperiodintheformofinflowsorenhancementsofassetsordecreasesofliabilitiesthatresultinincreasesinequity,otherthanthoserelatingtocontributionsfromequityDecreasesineconomicbenefitsduringtheaccountingperiodintheformofoutflowsordepletionsofassetsorincreasesofliabilitiesthatresultindecreasesinequity,otherthanthoserelatingtodistributionstoequity撿Ex–資產置Jocatthadexchangedsurpluslandwithacarryingvalueof$10millionforcashof$15millionand valuedat$4million.Thetransactionhascommercial復式記Ex–配ponentsof fromtheentity'sordinaryactivitiessuchthedisposaloffixed 益流2018/09Q3Discusswhethertheproceedsofthesaleofthedevelopmentprojectaboveshouldbetreatedasinthefinancialstatementsfortheyear31August20X8.(4AnswerGainsarisingfromderecognitionofanintangibleassetcannotbepresentedasrevenueasIAS38explicitlyforbidsit.ThereisnoindicationthatSkizer’sbusinessmodelistoselldevelopmentprojectsbut,rather,itundertakesthedevelopmentofnewproductsinconjunctionwiththirdpartyentities.Skizer’sbusinessmodelistojointlydevelopaproduct,thenleavetheproductiontopartners.AsSkizerhasrecognisedanintangibleassetinaccordancewithIAS38,andfullyimpairedtheasset,itcannotarguethatithasthereafterbeenheldforsaleintheordinaryco