Isna Farhani (008201700056)

Accounting Theory

1. Assets characterized

IASB (AASB) Framework for the Preparation and Presentation of Financial

Statements: an advantage is an asset constrained by the substance because of
past occasions and from which future monetary advantages are required to
stream to the element.

Three fundamental attributes:

a. future financial advantages
b. control by a substance
c. past occasions

- exchangeability
- recognition rules

2. Future financial advantages

Future financial advantages are the possibility to contribute, either

straightforwardly or by implication, to the progression of money and money
reciprocals to the element

a. profit looking for substance

b. not-revenue driven element
Identify with financial assets
c. scarcity
d. utility

An advantage is something that exists presently, has the capacity of

rendering administration or advantage at present or later on and recognize the
article, for example, a structure or machine, and the administration or advantage
exemplified in it.

3. Control by a substance
a. The monetary advantage must be constrained by the substance
b. An element's entitlement to utilize or control an advantage is
never total
c. Ownership is frequently simultaneous with control, however it's
anything but a fundamental normal for an advantage
d. Does not depend on lawful enforceability

4. Past occasions

a. Control because of a past occasion

b. Planned resources are prohibited
c. Event can be deciphered in various ways
d. executory contracts
5. Exchangeability
a. Some contend that a fourth fundamental trademark is that an
advantage be replaceable
b. Separable from an element

6. Asset acknowledgment

The degree and timing of the acknowledgment of advantages is

significant on the grounds that it can have monetary ramifications for
preparers and clients of budget reports.

a. Recognising resources on the monetary record includes

acknowledgment rules

- conventions and definitive professions

b. Recognition criteria

- the future financial advantages must be plausible

- the resource must be fit for being estimated dependably

c. Past acknowledgment criteria

- reliance on the law

- determination of financial substance of the exchange or

occasion

- use of the conservatism guideline: envision misfortunes, yet

not gains

7. Asset estimation

a. All the components of bookkeeping are connected and estimation

of benefit streams from estimation of the adjustment in net
resources

b. The standards and works on administering resource

acknowledgment and estimation will likewise influence estimation
of benefit and, thus, capital (value)
c. Once the definition and acknowledgment criteria have been met,
the bookkeeper must choose how to gauge the benefit

- several estimation approaches accessible

- qualitative qualities of money related data
 - Once estimated
- on asset report

- restricted to simply note exposure

8. Tangible resources

a. Traditional approach has been to quantify resources at chronicled

cost

b. IASB guidelines license consequent re estimation utilizing various

methodologies

c. fair esteem

- exit worth or incentive being used

d. UK and Australian firms could utilize values other than authentic

expense for a long time

9. Intangible resources

Bookkeeping estimation has by and large been preservationist

a. cost (less amassed amortization and weakness) is normally

utilized

b. fair values from a functioning business sector

c. internally created intangibles can't be perceived

10. Financial instruments

FASB/IASB

a. derivatives are estimated at reasonable worth instead of expense

IASB

b. committed to the utilization of reasonable worth estimation for

money related instruments

11. Issues for inspectors

Inspecting reasonable qualities makes challenges since it requires the use

of valuation models, and, much of the time, the utilization of valuation
specialists