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Accounting [IFRS and IAS] Terms and Definitions: [S to W]



share-based payment transaction – A transaction in which the entity receives goods or services as consideration for equity instruments of the entity (including shares or share options), or acquires goods or services by incurring liabilities to the supplier of those goods or services for amounts that are based on the price of the entity’s shares or other equity instruments of the entity. [IFRS 2.A]

share option – A contract that gives the holder the right, but not the obligation, to subscribe to the entity’s shares at a fixed or determinable price for a specific period of time. [IFRS 2.A]


short seller – An entity that sells financial assets that it has borrowed and does not yet own. [IAS 39.AG15]

short-term employee benefits – Employee benefits (other than termination benefits) which fall due wholly within twelve months after the end of the period in which the employees render the related service. [IAS 19.7]

significant influence – The power to participate in the financial and operating policy decisions of an entity, but not control over those policies. Significant influence may be gained by share ownership, statute or agreement. [IAS 24.9, (IAS 28.2), (IAS 31.3)]

solvency – The availability of cash over the longer term to meet financial commitments as they fall due. [F.16]

spot exchange rate – The exchange rate for immediate delivery. [IAS 21.8]

state (employee benefit) plan – Employee benefit plans established by legislation to cover all entities (or all entities in a particular category, for example a specific industry) and operated by national or local government or by another body (for example an autonomous agency created specifically for this purpose) which is not subject to control or influence by the reporting entity. [IAS 19.37]

subsidiary – An entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent). [IFRS 3.A, IAS 27.4, IAS 28.2]

substance over form – The principle that transactions and other events are accounted for and presented in accordance with their substance and economic reality and not merely their legal form. [F.35, (IAS 8.7–10)]

tax base of an asset or liability – The amount attributed to that asset or liability for tax purposes. [IAS 12.5]

tax expense (tax income) –  The aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax. Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax expense (deferred tax income). [IAS 12.5, IAS 12.6]

taxable profit (tax loss) – The profit (loss) for a period, determined in accordance with the rules established by the taxation authorities, upon which income taxes are payable (recoverable). [IAS 12.5]

taxable temporary differences – Temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled. [IAS 12.5]

temporary differences – Differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Temporary differences may be either:
(a) taxable temporary differences; or
(b) deductible temporary differences.
[IAS 12.5]

termination benefits –  Employee benefits payable as a result of either:
(a) an entity’s decision to terminate an employee’s employment before the normal retirement date; or
(b) an employee’s decision to accept voluntary redundancy in exchange for those benefits.
[IAS 19.7]

total comprehensive income – The change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners. [IAS 1.7]

trade date – The date that an entity commits itself to purchase or sell an asset. [IAS 39.AG55]

transaction costs (financial instruments) – Incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or financial liability (see IAS 39 paragraph AG13). An incremental cost is one that would not have been incurred if the entity had not acquired, issued or disposed of the financial instrument. [IAS 39.9]

transitional liability (defined benefit plans) – For an entity on first adopting IAS 19:
(a) the present value of the obligation at the date of adoption;
(b) minus the fair value, at the date of adoption, of plan assets (if any) out of which the obligations are to be settled directly;
(c) minus any past service cost that shall be recognized in later periods.
[IAS 19.154]

treasury shares – An entity’s own equity instruments, held by the entity or other members of the consolidated group. [IAS 32.33]

unbundle – Account for the components of a contract as if they were separate contracts. [IFRS 4.A]

understandability – Information provided in financial statements has the quality of understandability when it is comprehensible to users who have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence. [F.25]

unearned finance income – The difference between:
(a) the gross investment in the lease, and
(b) the net investment in the lease.
[IAS 17.4]

unguaranteed residual value – That portion of the residual value of the leased asset, the realization of which by the lessor is not assured or is guaranteed solely by a party related to the lessor. [IAS 17.4]

useful life – The estimated remaining period, from the commencement of the lease term, without limitation by the lease term, over which the economic benefits embodied in the asset are expected to be consumed by the entity. [IAS 17.4]

useful life – Either:
(a) the period over which an asset is expected to be available for use by an entity; or
(b) the number of production or similar units expected to be obtained from the asset by the entity.
[IAS 16.6, IAS 36.6, IAS 38.8]

value in use –  The present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. [IFRS 5.A]

value in use – The present value of the future cash flows expected to be derived from an asset or cash-generating unit. [IAS 36.6]

variable production overheads – Those indirect costs of production that vary directly, or nearly directly, with the volume of production, such as indirect materials and indirect labor. [IAS 2.12]

venturer – A party to a joint venture that has joint control over that joint venture. [IAS 31.3]

vest – To become an entitlement. Under a share-based payment arrangement, a counterparty’s right to receive cash, other assets or equity instruments of the entity vests when the counterparty’s entitlement is no longer conditional on the satisfaction of any vesting conditions. [IFRS 2.A]

vested benefits – Benefits, the rights to which, under the conditions of a retirement benefit plan, are not conditional on continued employment. [IAS 26.8]

vested employee benefits – Employee benefits that are not conditional on future employment [ IAS 19.7]

vesting conditions – The conditions that determine whether the entity receives the services that entitle the counterparty to receive cash, other assets or equity instruments of the entity, under a share-based payment arrangement. Vesting conditions are either service conditions or performance conditions. Service conditions require the counterparty to complete a specified period of service. Performance conditions require the counterparty to complete a specified period of service and specified performance targets to be met (such as a specified increase in the entity’s profit over a specified period of time). A performance condition might include a market condition. [IFRS 2.A]

vesting period – The period during which all the specified vesting conditions of a share-based payment arrangement are to be satisfied. [IFRS 2.A]

warrant – A financial instrument that gives the holder the right to purchase ordinary shares. [IAS 33.5]

weighted average cost formula – Under this formula, the cost of each item is determined from the weighted average of the cost of similar items at the beginning of a period and the cost of similar items purchased or produced during the period. The average may be calculated on a periodic basis, or as each additional shipment is received, depending upon the circumstances of the entity. [IAS 2.27]

weighted average number of ordinary shares outstanding during the period –  The number of ordinary shares outstanding at the beginning of the period, adjusted by the number of ordinary shares bought back or issued during the period multiplied by a time-weighting factor. [IAS 33.20]

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