Glossary Of Terms - Australian Accounting Standards Board
Glossary of Defined Terms(Updated to 30 September 2015)This Glossary contains the defined terms from Australian Accounting Standards. References are byStandard and paragraph number or appendix reference.The Glossary also includes terms defined in the Framework for the Preparation and Presentation ofFinancial Statements, CF 2013-1 Amendments to the Australian Conceptual Framework and Statements ofAccounting Concepts SAC 1 Definition of the Reporting Entity. References to the Framework andCF 2013-1are denoted by F and CF 2013-1, respectively. References to Statements of Accounting Conceptsare denoted by SAC.References shown in italics indicate minor variations in wording.The definitions referenced are generally those from the most recent Standards. In addition, the relevantdefinitions from some superseded, but still applicable Standards, are retained. Different versions ofStandards are identified by the issue or amended date in brackets included in the footnotes.12-month expected creditlossesThe portion of lifetime expected credit losses thatrepresent the expected credit losses that result fromdefault events on a financial instrument that arepossible within the 12 months after the reporting date.AASB 9.AABS GFS ManualAustralian Bureau of Statistics (ABS) publicationsAustralian System of Government Finance Statistics:Concepts, Sources and Methods, 2005 (ABS CatalogueNo. 5514.0) and Amendments to Australian System ofGovernment Finance Statistics, 2005 (ABS CatalogueNo. 5514.0) published on the ABS website.AASB 1049.Aaccounting policiesThe specific principles, bases, conventions, rules andpractices applied by an entity in preparing andpresenting financial statements.AASB 108.5accounting profitProfit or loss for a period before deducting taxexpense.AASB 112.5accrual basis ofaccountingThe effects of transactions and other events arerecognised when they occur (and not as cash or itsequivalent is received or paid) and they are recorded inthe accounting records and reported in the financialstatements of the periods to which they relate.F.22accrued benefitsBenefits the plan is presently obliged to transfer in thefuture to members and beneficiaries as a result ofmembership of the plan up to the end of the reportingperiod and, in the case of defined contribution plans,encompasses benefits which have been allocated toindividual members' accounts and benefits not yet soallocated.AAS 25.10acquireeThe business or businesses that the acquirer obtainscontrol of in a business combination.AASB 3.AacquirerThe entity that obtains control of the acquiree.AASB 3.A1
acquisition costsThe fixed and variable costs of acquiring newbusiness, including commissions and similardistribution costs, and costs of accepting, issuing andinitially recording policies.AASB 1038.20.1(Acquisition costs relate to the costs incurred inacquiring specific life insurance contracts during thereporting period. They do not include the generalgrowth and development costs incurred by a lifeinsurer.)acquisition dateThe date on which the acquirer obtains control of theacquiree.AASB 3.Aactive marketA market in which transactions for the asset or liabilitytake place with sufficient frequency and volume toprovide pricing information on an ongoing basis.AASB 13.Aactuarial gains and lossesThe changes in the present value of the defined benefitobligation resulting from:AASB 119.8(a)experience adjustments (the effects ofdifferences between the previous actuarialassumptions and what has actually occurred);and(b)the effects of changes in actuarial assumptions.adjusting events after thereporting periodSee ‘events after the reporting period’agricultural activityThe management by an entity of the biologicaltransformation of biological assets for sale intoagricultural produce or into additional biologicalassets.AASB 141.5agricultural produceThe harvested product of the entity’s biological assets.AASB 141.5amortisation(depreciation)The systematic allocation of the depreciable amount ofan asset over its useful life.AASB 136.6amortisationThe systematic allocation of the depreciable amount ofan intangible asset over its useful life.AASB 138.8amortised cost of afinancial asset or financialliabilityThe amount at which the financial asset or financialliability is measured at initial recognition minusprincipal repayments, plus or minus the cumulativeamortisation using the effective interest method of anydifference between that initial amount and the maturityamount, and minus any reduction (directly or throughthe use of an allowance account) for impairment oruncollectibility.AASB 139.9amortised cost of afinancial asset or financialliabilityThe amount at which the financial asset or financialliability is measured at initial recognition minus theprincipal repayments, plus or minus the cumulativeamortisation using the effective interest method ofany difference between that initial amount and thematurity amount and, for financial assets, adjusted forany loss allowance.AASB 9.A2AASB 138.8
annual reporting periodThe financial year or similar period to which annualfinancial statements relate.AASB 1054.6antidilutionAn increase in earnings per share or a reduction in lossper share resulting from the assumption thatconvertible instruments are converted, that options orwarrants are exercised, or that ordinary shares areissued upon the satisfaction of specified conditions.AASB 133.5area of interestAn individual geological area which is considered toconstitute a favourable environment for the presence ofa mineral deposit or an oil or natural gas field, or hasbeen proved to contain such a deposit or field.AASB 6.AassetA resource:AASB 138.8,F.49(a)(a)controlled by an entity as a result of past events;and(b)from which future economic benefits areexpected to flow to the entity.asset ceilingThe present value of any economic benefits availablein the form of refunds from the plan or reductions infuture contributions to the plan.AASB 119.8assets held by a long-termemployee benefit fundAssets (other than non-transferable financialinstruments issued by the reporting entity) that:AASB 119.8(a)are held by an entity (a fund) that is legallyseparate from the reporting entity and existssolely to pay or fund employee benefits; and(b)are available to be used only to pay or fundemployee benefits, are not available to thereporting entity’s own creditors (even inbankruptcy), and cannot be returned to thereporting entity, unless either:(i)the remaining assets of the fund aresufficient to meet all the related employeebenefit obligations of the plan or thereporting entity; or(ii)the assets are returned to the reportingentity to reimburse it for employeebenefits already paid.associateAn entity over which the investor has significantinfluence.AASB 128.3attachment dateFor a direct insurer, the date as from which the insureraccepts risk from the insured under an insurancecontract or endorsement or, for a reinsurers, the datefrom which the reinsurer accepts risk from the directinsurer or another reinsurer under a reinsurancearrangement.AASB 1023.19.1available-for-sale financialassetsThose non-derivative financial assets that aredesignated as available for sale or are not classified as(a) loans and receivables, (b) held-to-maturityinvestments, or (c) financial assets at fair valuethrough profit or loss.AASB 139.93
beneficiariesThose persons who are currently receiving, or arecurrently entitled to receive, benefits from thesuperannuation plan.AAS 25bearer plantA living plant that:AASB 141.5,AASB 116.6(a)is used in the production or supply ofagricultural produce;(b)is expected to bear produce for more than oneperiod; and(c)has a remote likelihood of being sold asagricultural produce, except for incidental scrapsales.biological assetA living animal or plant.AASB 141.5biological transformationThe processes of growth, degeneration, production,and procreation that cause qualitative or quantitativechanges in a biological asset.AASB 141.5borrowing costsInterest and other costs that an entity incurs inconnection with the borrowing of funds.AASB 123.5businessAn integrated set of activities and assets that is capableof being conducted and managed for the purpose ofproviding a return in the form of dividends, lower costsor other economic benefits directly to investors orother owners, members or participants.AASB 3.Abusiness combinationA transaction or other event in which an acquirerobtains control of one or more businesses.Transactions sometimes referred to as ‘true mergers’or ‘mergers of equals’ are also business combinationsas that term is used in this Standard.AASB 3.AcapitalUnder a financial concept of capital, such as investedmoney or invested purchasing power, the net assets orequity of the entity. The financial concept of capital isadopted by most entities.F.102Under a physical concept of capital, such as operatingcapability, the productive capacity of the entity basedon, for example, units of output per day.carrying amountThe amount at which an asset is recognised afterdeducting any accumulated depreciation (amortisation)and accumulated impairment losses thereon.AASB 116.6,AASB 136.6carrying amountThe amount at which an asset is recognised in thestatement of financial position after deducting anyaccumulated amortisation and accumulated impairmentlosses thereon.AASB 138.8carrying amountThe amount at which an asset is recognised in thestatement of financial position.AASB 140.5,AASB 141.8cashCash on hand and demand deposits.AASB 107.64
cash equivalentsShort-term, highly liquid investments that are readilyconvertible to known amounts of cash and which aresubject to an insignificant risk of changes in value.AASB 107.6cash flowsInflows and outflows of cash and cash equivalents.AASB 107.6cash-generating unitThe smallest identifiable group of assets that generatescash inflows that are largely independent of the cashinflows from other assets or groups of assets.AASB 136.6,AASB 5.Acash-settled share-basedpayment transactionA share-based payment transaction in which the entityacquires goods or services by incurring a liability totransfer cash or other assets to the supplier of thosegoods or services for amounts that are based on theprice (or value) of equity instruments (including sharesor share options) of the entity or another group entity.AASB 2.Acash surplus/(deficit)Net cash flows from operating activities plus net cashflows from acquisition and disposal of non-financialassets less distributions paid less value of assetsacquired under finance leases and similararrangements. Defined in the ABS GFS Manual(paragraph 2.124).AASB 1049.AcedantThe policyholder under a reinsurance contract.AASB 4.A,AASB 1023.19,AASB 1038.20.1change in accountingestimateAn adjustment of the carrying amount of an asset or aliability, or the amount of the periodic consumption ofan asset, that results from the assessment of the presentstatus of, and expected future benefits and obligationsassociated with, assets and liabilities. Changes inaccounting estimates result from new information ornew developments and, accordingly, are notcorrections of errors.AASB 108.5claimA demand by any party external to the entity forpayment by the insurer on account of an alleged lossresulting from an insured event or events, that haveoccurred, alleged to be covered by an insurancecontract.AASB 1023.19.1claims expenseThe charge to the statement of comprehensive incomefor the reporting period and represents the sum ofclaims settled and claims management expensesrelating to claims incurred in the period and themovement in the gross outstanding claims liability inthe period.AASB 1023.19.1claims incurredClaims that have occurred prior to the end of thereporting period, whether reported or unreported at theend of the reporting period.AASB 1023.19.1class of assetsA grouping of assets of a similar nature and use in anentity’s operations.AASB 136.1275
close members of thefamily of an individualThose family members who may be expected toinfluence, or be influenced by, that person in theirdealings with the entity and include:(a)that person’s children and spouse or domesticpartner;(b)children of that person’s spouse or domesticpartner; and(c)dependants of that person or that person’sspouse or domestic partner.AASB 124.9closing rateThe spot exchange rate at the end of the reportingperiod.AASB 121.8commencement of thelease termThe date from which the lessee is entitled to exerciseits right to use the leased asset. It is the date of initialrecognition of the lease (ie the recognition of theassets, liabilities, income or expenses resulting fromthe lease, as appropriate).AASB 117.4compensationIncludes all employee benefits (as defined inAASB 119 Employee Benefits) including employeebenefits to which AASB 2 Share-based Paymentapplies. Employee benefits are all forms ofconsideration paid, payable or provided by the entity,or on behalf of the entity, in exchange for servicesrendered to the entity. It also includes suchconsideration paid on behalf of a parent of the entity inrespect of the entity. Compensation includes:AASB 124.9component of an entity(a)short-term employee benefits, such as wages,salaries and social security contributions, paidannual leave and paid sick leave, profit-sharingand bonuses (if payable within twelve months ofthe end of the period) and non-monetary benefits(such as medical care, housing, cars and free orsubsidised goods or services) for currentemployees;(b)post-employment benefits such as pensions,other retirement benefits, post-employment lifeinsurance and post-employment medical care;(c)other long-term employee benefits, includinglong-service leave or sabbatical leave, jubilee orother long-service benefits, long-term disabilitybenefits and, if they are not payable whollywithin twelve months after the end of the period,profit-sharing, bonuses and deferredcompensation;(d)termination benefits; and(e)share-based payment.Operations and cash flows that can be clearlydistinguished, operationally and for financial reportingpurposes, from the rest of the entity.6AASB 5.A
compound financialinstrumentA financial instrument that, from the issuer’sperspective, contains both a liability and an equityelement.AASB 132.28–29consolidated financialstatementsThe financial statements of a group in which the assets,liabilities, equity, income, expenses and cash flows ofthe parent and its subsidiaries are presented as those ofa single economic entity.AASB 10.A,AASB 127.4,AASB 128.3construction contractA contract specifically negotiated for the constructionof an asset or a combination of assets that are closelyinterrelated or interdependent in terms of their design,technology and function or their ultimate purpose oruse.AASB 111.3constructive obligationAn obligation that derives from an entity’s actionswhere:AASB 137.10(a)by an established pattern of past practice,published policies or a sufficiently specificcurrent statement, the entity has indicated toother parties that it will accept certainresponsibilities; and(b)as a result, the entity has created a validexpectation on the part of those other parties thatit will discharge those responsibilities.contingent assetA possible asset that arises from past events and whoseexistence will be confirmed only by the occurrence ornon-occurrence of one or more uncertain future eventsnot wholly within the control of the entity.AASB 137.10contingent considerationUsually, an obligation of the acquirer to transferadditional assets or equity interests to the formerowners of an acquiree as part of the exchange forcontrol of the acquiree if specified future events occuror conditions are met. However, contingentconsideration also may give the acquirer the right tothe return of previously transferred consideration ifspecified conditions are met.AASB 3.Acontingent liabilityIs:AASB 137.10(a)a possible obligation that arises from past eventsand whose existence will be confirmed only bythe occurrence or non-occurrence of one or moreuncertain future events not wholly within thecontrol of the entity; or(b)a present obligation that arises from past eventsbut is not recognised because:(i)it is not probable that an outflow ofresources embodying economic benefitswill be required to settle the obligation; or(ii)the amount of the obligation cannot bemeasured with sufficient reliability.7
contingent rentThat portion of the lease payments that is not fixed inamount but is based on the future amount of a factorthat changes other than with the passage of time (egpercentage of future sales, amount of future use, futureprice indices, future market rates of interest).AASB 117.4contingent shareagreementAn agreement to issue shares that is dependent on thesatisfaction of specified conditions.AASB 133.5contingently issuableordinary sharesOrdinary shares issuable for little or no cash or otherconsideration upon the satisfaction of specifiedconditions in a contingent share agreement.AASB 133.5contractAn agreement between two or more parties that hasclear economic consequences that the parties havelittle, if any, discretion to avoid, usually because theagreement is enforceable at law. Contracts may take avariety of forms and need not be in writing.AASB 132.13contractAn agreement between two or more parties that createsenforceable rights and obligations.AASB 15.Acontract assetAn entity’s right to consideration in exchange forgoods or services that the entity has transferred to acustomer when that right is conditioned on somethingother than the passage of time (for example, theentity’s future performance).AASB 15.Acontract assetsThose rights that AASB 15 Revenue from Contractswith Customers specifies are accounted for inaccordance with this Standard for the purposes ofrecognising and measuring impairment gains or losses.AASB 9.Acontract liabilityAn entity’s obligation to transfer goods or services to acustomer for which the entity has receivedconsideration (or the amount is due) from thecustomer.AASB 15.AcontributionsNon-reciprocal transfers to the entity.AASB 1004.Acontributions by ownersFuture economic benefits that have been contributed tothe entity by parties external to the entity, other thanthose which result in liabilities of the entity, that giverise to a financial interest in the net assets of the entitywhich:AASB 1004.Acontrol(a)conveys entitlement both to distributions offuture economic benefits by the entity during itslife, such distributions being at the discretion ofthe ownership group or its representatives, andto distributions of any excess of assets overliabilities in the event of the entity being woundup; and/or(b)can be sold, transferred or redeemed.The capacity of an entity to dominate decision-making,directly or indirectly, in relation to the financial andoperating policies of another entity so as to enable thatother entity to operate with it in achieving theobjectives of the controlling entity.8SAC 1.6
control of an investeeAn investor controls an investee when the investor isexposed, or has rights, to variable returns from itsinvolvement with the investee and has the ability toaffect those returns through its power over theinvestee.AASB 10.Acorporate assetsAssets other than goodwill that contribute to the futurecash flows of both the cash-generating unit underreview and other cash-generating units.AASB 136.6costThe amount of cash or cash equivalents paid or the fairvalue of the other consideration given to acquire anasset at the time of its acquisition or construction, or,when applicable, the amount attributed to that assetwhen initially recognised in accordance with thespecific requirements of other Australian AccountingStandards, for example AASB 2 Share-based Payment.AASB 116.6,AASB 138.8,AASB 140.5cost approachA valuation technique that reflects the amount thatwould be required currently to replace the servicecapacity of an asset (often referred to as currentreplacement cost).AASB 13.Acost of inventoriesAll costs of purchase, costs
This Glossary contains the defined terms from Australian Accounting Standards. References are by Standard and paragraph number or appendix reference. The Glossary also includes terms defined in the Framework for the Preparation and Presentation of Financial Statements, CF 2013-1 Amendments to the Australian Conceptual Framework and Statements of
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Financial Accounting Institute P.O. Box 118 Tenafly, NJ 07670 www.financialaccounting.com Phone 201-568-0249 Glossary of Utility Finance and Accounting Terms used in our Seminars Letters in parenthesis, preceding the definition, identify the sources used in compiling the glossary. A list of these sources is at end.
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American Revolution has fallen into the condition that overtakes so many of the great . 4 events of the past; it is, as Professor Trevor-Roper has written in another connection, taken for granted: "By our explanations, interpretations, assumptions we gradually make it seem automatic, natural, inevitable; we remove from it the sense of wonder, the unpredictability, and therefore the freshness .
