primary financial instrumentsFinancial instruments such as receivables, payables and equity securities, that are not derivative financial instruments. [IAS 32.AG15]


prior period errors – Omissions from, and misstatements in, the entity’s financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that:
(a) was available when financial statements for those periods were authorized for issue; and
(b) could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements.
Such errors include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud.
[IAS 8.5]

probable – More likely than not. IFRS 5.A, (IAS 37.23)

profit – The residual amount that remains after expenses (including capital maintenance adjustments, where appropriate) have been deducted from income. Any amount over and above that required to maintain the capital at the beginning of the period is profit. [F.105, F.107]

profit or loss – The total of income less expenses, excluding the components of other comprehensive income. [IAS 1.7]

projected unit credit method – An actuarial valuation method that sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation (sometimes known as the accrued benefit method pro-rated on service or as the benefit/years of service method). [IAS 19.64–66]

property, plant and equipment – Tangible items that:
(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
(b) are expected to be used during more than one period.
[IAS 16.6]

proportionate consolidation – A method of accounting and reporting whereby a venturer’s share of each of the assets, liabilities, income and expenses of a jointly controlled entity is combined line by line with similar items in the venturer’s financial statements or reported as separate line items in the venturer’s financial statements. [IAS 31.3]

prospective application – Prospective application of a change in accounting policy and of recognizing the effect of a change in an accounting estimate, respectively, are:
(a) applying the new accounting policy to transactions, other events and conditions occurring after the date as at which the policy is changed; and
(b) recognizing the effect of the change in the accounting estimate in the current and future periods affected by the change.
[IAS 8.5]

provision – A liability of uncertain timing or amount. [IAS 37.10]

prudence – The inclusion of a degree of caution in the exercise of the judgements needed in making the estimates required under conditions of uncertainty, such that assets or income are not overstated and liabilities or expenses are not understated. [F.37]

put options (on ordinary shares) – Contracts that give the holder the right to sell ordinary shares at a specified price for a given period. [IAS 33.5]

qualifying asset – An asset that necessarily takes a substantial period of time to get ready for its intended use or sale. [IAS 23.5]

qualifying insurance policy – An insurance policy issued by an insurer that is not a related party (as defined in IAS 24) of the reporting entity, if the proceeds of the policy:
(a) can be used only to pay or fund employee benefits under a defined benefit plan;
(b) are not available to the reporting entity’s own creditors (even in bankruptcy) and cannot be paid to the reporting entity, unless either: (i) the proceeds represent surplus assets that are not needed for the policy to meet all the related employee benefit obligations; or (ii) the proceeds are returned to the reporting entity to reimburse it for employee benefits already paid. [IAS 19.7]

realizable value – The amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal. [F.100(c)]

reclassification adjustments – Amounts reclassified to profit or loss in the current period that were recognized in other comprehensive income in the current or previous periods. [IAS 1.7]

recognition – The process of incorporating in the balance sheet [statement of financial position] or income statement [statement of comprehensive income] an item that meets the definition of an element and satisfies the following criteria for recognition:
(a) it is probable that any future economic benefit associated with the item will flow to or from the entity; and
(b) the item has a cost or value that can be measured with reliability.

recoverable amount – The higher of an asset’s (or cash-generating unit’s) fair value less costs to sell and its value in use. [IAS 36.6, IFRS 5.A]

recoverable amount – The higher of an asset’s net selling price and its value
in use. [IAS 16.6]

regular way purchase or sale – A purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned. [IAS 39.9]

reinsurance assets – A cedant’s net contractual rights under a reinsurance contract. [IFRS 4.A]

reinsurance contract – An insurance contract issued by one insurer (the reinsurer) to compensate another insurer (the cedant) for losses on one or more contracts issued by
the cedant. [IFRS 4.A]

reinsurer – The party that has an obligation under a reinsurance contract to compensate a cedant if an insured event occurs. [IFRS 4.A]

related party – A party is related to an entity if:
(a) directly, or indirectly through one or more intermediaries, the party: (i) controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries); (ii) has an interest in the entity that gives it significant influence over the entity; or (iii) has joint control over the entity;
(b) the party is an associate (as defined in IAS 28) of the entity;
(c) the party is a joint venture in which the entity is a venturer (see IAS 31);
(d) the party is a member of the key management personnel of the entity or its parent;
(e) the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or
(g) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity.
[IAS 24.9]

related party transaction – A transfer of resources, services or obligations between related parties, regardless of whether a price is charged. [IAS 24.9]

relevance – Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present or future events or confirming, or correcting, their past evaluations. [F.26]

reliability – Information has the quality of reliability when it is free from material error and bias and can be depended upon by users to represent faithfully that which it either purports to represent or could reasonably be expected to represent. [F.31]

reload feature – A feature that provides for an automatic grant of additional share options whenever the option holder exercises previously granted options using the entity’s shares, rather than cash, to satisfy the exercise price. [IFRS 2.A]

reload option – A new share option granted when a share is used to satisfy the exercise price of a previous share option. [IFRS 2.A]

reportable segment – An operating segment for which IFRS 8 requires information to be disclosed. [IFRS 8.11]

reporting entity – An entity for which there are users who rely on the financial statements as their major source of financial information about the entity. [F.8]

research – Original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. [IAS 38.8]

residual value (of an asset) – The estimated amount that an entity would currently obtain from disposal of an asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. [IAS 16.6, (IAS 38.8]

restructuring – A program that is planned and controlled by management, and materially changes either:
(a) the scope of a business undertaken by an entity; or
(b) the manner in which that business is conducted.
[IAS 37.10]

retirement benefit plans – Arrangements whereby an entity provides benefits for its employees on or after termination of service (either in the form of an annual income or as a lump sum) when such benefits, or the employer’s contributions towards them, can be determined or estimated in advance of retirement from the provisions of a document or from the entity’s practices. (See also ‘post-employment benefit plans’.) [IAS 26.8]

retrospective application – Applying a new accounting policy to transactions, other events and conditions as if that policy had always been applied. [IAS 8.5]

retrospective restatement – Correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period error had never occurred. [IAS 8.5]

return on plan assets (of an employee benefit plan)Interest, dividends and other revenue derived from the plan assets, together with realized and unrealized gains or losses on the plan assets, less any costs of administering the plan and less any tax payable by the plan itself. [IAS 19.7]

revaluation – Restatement of assets and liabilities. [F.81]

revalued amount of an asset – The fair value of an asset at the date of a revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. [IAS 16.31]

revenue – The gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants. [IAS 18.7]

reverse acquisition – An acquisition where the acquirer is the entity whose equity interests have been acquired and the issuing entity is the acquiree. This might be the case when, for example, a private entity arranges to have itself ‘acquired’ by a smaller public entity as a means of obtaining a stock exchange listing. [IFRS 3.21]

rewards associated with a leased asset – Rewards may be represented by the expectation of profitable operation over the asset’s economic life and of gain from appreciation in value or realization of a residual value. [IAS 17.7]

risks associated with a leased asset – Risks include possibilities of losses from idle capacity or technological obsolescence and of variations in return because of changing economic conditions. [IAS 17.7]

sale and leaseback transaction – The sale of an asset and the leasing back of the same asset. The lease payment and the sale price are usually interdependent because they are negotiated as a package. [IAS 17.58]

separate financial statements – Those presented by a parent, an investor in an associate or a venturer in a jointly controlled entity, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees. [IAS 27.4, IAS 28.2, IAS 31.3]

set-off, legal right of – A debtor’s legal right, by contract or otherwise, to settle or otherwise eliminate all or a portion of an amount due to a creditor by applying against that amount an amount due from the creditor. [IAS 32.45]

settlement (of employee benefit obligations) – A transaction that eliminates all further legal or constructive obligation for part or all of the benefits provided under a defined benefit plan, for example, when a lump-sum cash payment is made to, or on behalf of, plan participants in exchange for their rights to receive specified post-employment benefits. [IAS 19.112]

settlement date – The date that a financial asset is delivered to or by an entity. [IAS 39.AG56]

settlement value – The undiscounted amounts of cash or cash equivalents expected to be paid to satisfy the liabilities in the normal course of business. [F.100(c)]

share-based payment arrangement – An agreement between the entity and another party (including an employee) to enter into a share-based payment transaction, which thereby entitles the other party to receive cash or other assets of the entity for amounts that are based on the price of the entity’s shares or other equity instruments of the entity, or to receive equity instruments of the entity, provided the specified vesting conditions, if any, are met. [IFRS 2.A]