ACOUNTING THEORY TASK

AMANDA RAYSHA (C1L013029)

CLASSIFICATIO
N
RECOGNITION

MEASUREMENT

IAS No.1

IAS No.2

An entity shall
recognize all items of
income and expense in
a period in profit or
loss unless an IFRS
requires or permits
otherwise.

When inventories are sold,

the carrying amount of
those inventories shall be
recognized as an expense
in the period in which the
related revenue is
recognized. The amount of
any write-down of
inventories to net
realizable value and all
losses of inventories shall
be recognized as an
expense in the period the
write-down or loss occurs.
The amount of any
reversal of any write-down
of inventories, arising
from an increase in net
realizable value, shall be
recognized as a reduction
in the amount of
inventories recognized as
an expense in the period in
which the reversal occurs.
Inventories shall be
measured at the lower of
cost and net realizable
value.
The cost of inventories
shall comprise all costs of
purchase, costs of
conversion and other costs

The classification of
items in the financial
statements shall be
retained from one
period to the next.
Comparative
information shall be
included for narrative

IAS No.7

IAS No.8

IAS No.10

The statement of cash

flow shall report cash
flows during the period
classified by operating,
investing and financing
activities.

To the extent that a change

in an accounting estimate
gives rise to changes in
assets and liabilities, or
relates to an item of equity,
it shall be recognized by
adjusting the carrying
amount of the related
asset, liability or equity
item in the period of the
change.

An entity shall adjust

the amounts
recognized in its
financial statements to
reflect adjusting
events after the
reporting period.
An entity shall not
adjust the amounts
recognized in its
financial statements to
reflect non-adjusting
events after the
reporting period.
If an entity declares
dividends to holders
of equity instruments
after the reporting
period, the entity shall
not recognize those
dividends as a liability
at the end of the
reporting period.

An entity shall report

cash flows from operating
activities using either: (a)
direct method or; (b)
indirect method. An entity
shall report separately
major classes of gross
cash receipts and gross

A change in the
measurement basis applied
is a change in an
accounting policy, and is
not a change in an
accounting estimate. When
it is difficult to distinguish
a change in an accounting

An entity declares
dividends to holders
of equity instruments
after the reporting
period, the entity shall
not recognize those
dividends as a liability
at the end of the

DISCLOSURE

and descriptive
information when it is
relevant to an
understanding of the
current periods
financial statements.
Each material class of
similar items shall be
presented separately in
the financial
statements. Items of a
dissimilar nature or
function shall be
presented separately
unless they are
immaterial.
An entity shall disclose
in the summary of
significant accounting
policies:
(a) the measurement
basis (or bases) used in
preparing the financial
statements, and
(b) the other
accounting policies
used that are relevant
to an understanding of
the financial
statements.

incurred in bringing the

inventories to their present
location and condition.

cash payments arising

from investing and
financing activities,
except to the extent that
cash flows described in
paragraphs 22 and 24 are
reported on a net basis.

policy from a change in an

accounting estimate, the
change is treated as a
change in an accounting
estimate. For some types
of estimates, it is
impracticable to
distinguish these types of
information.

reporting period.

(a) the accounting policies

adopted in measuring
inventories; (b) the total
carrying amount of
inventories and the
carrying amount in
classifications appropriate
to the entity; (c) the
carrying amount of
inventories carried at fair
value less costs to sell; (d)
the amount of inventories
recognized as an expense
during the period; (e) the
amount of any write-down
of inventories recognized
as an expense in the
period; (f) the amount of
any reversal of any writedown
that is recognized as a

An entity shall disclose,

together with a
commentary by
management, the amount
of significant cash and
cash equivalent balances
held by the entity that are
not available for use by
the group.

An entity shall disclose the

nature and amount of a
change in an accounting
estimate that has an effect
in the current period or is
expected to have an effect
in future periods, except
for the disclosure of the
effect on future periods
when it is impracticable to
estimate that effect.
If the amount of the effect
in future periods is not
disclosed because
estimating it is
impracticable, an entity
shall disclose that fact.

An entity shall
disclose the date when
the financial
statements were
authorized for issue
and who gave that
authorization. If the
entitys owners or
others have the power
to amend the financial
statements after issue,
the entity shall
disclose that fact.

reduction in the amount

of inventories recognized
as expense in the period;
(g) the circumstances or
events that led to the
reversal of a write-down of
inventories; (h) the
carrying amount of
inventories pledged as
security for liabilities.