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DEFINITION OF TERMS

Conceptual Framework
Accrual Basis. When financial statements are prepared on the accrual basis of accounting, the effects of transactions and other
events are recognized when they occur (and not as cash or its equivalent is received or paid), and they are recorded in the
accounting records and reported in the financial statements of the periods to which they relate.
Going Concern. When financial statements are prepared on a going concern basis, it is assumed that the entity
has neither the intention nor the need to liquidate or curtail materially the scale of its operations, but will continue in operation
for the foreseeable future. If this assumption is not valid, the financial statements may need to be prepared on a different basis
and, if so, the basis used is disclosed.
Relevance refers to information being relevant to the decision-making needs of users. 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. The concept of relevance is closely related to the concept of materiality.
Faithful representation. General purpose financial reports represent economic phenomena in words and numbers, To be
useful, financial information must not only be relevant, it must also represent faithfully the phenomena it purports to represent.
This fundamental characteristic seeks to maximise the underlying characteristics of completeness, neutrality and freedom from
error.
Reliability refers to information being free from material error and bias and can be depended on by users to represent faithfully
that which it either purports to represent or could reasonably be expected to represent.
Prudence. whereby preparers of financial statements should include a degree of caution in exercising judgments
needed in making estimates, such that assets or income are not overstated and liabilities or expenses are not understated.
Comparability refers to information being comparable through time and across entities. Information about a reporting entity is
more useful if it can be compared with similar information about other entities and with similar information about the same
entity for another period or another date. Comparability enables users to identify and understand similarities in, and differences
among, items.
Verifiability helps to assure users that information represents faithfully the economic phenomena it purports to represent.
Verifiability means that different knowledgeable and independent observers could reach consensus, although not necessarily
complete agreement, that a particular depiction is a faithful representation.
Understandability refers to information being readily understandable by users who have a reasonable knowledge of business
and economic activities and accounting and a willingness to study the information with reasonable diligence.
Timeliness means that information is available to decision-makers in time to be capable of influencing their decisions.
Assets. An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are
expected to flow to the entity.
Liabilities. A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result
in an outflow from the entity of resources embodying economic benefits.
Equity. Equity is the residual interest in the assets of the entity after deducting all its liabilities.
Income. Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of
assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity
participants.
Expenses. Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of
assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity
participants.
Historical cost. A measurement basis according to which assets are recorded at the amount of cash or cash equivalents paid or
the fair value of the consideration given to acquire them at the time of their acquisition. Liabilities are recorded at the amount of
proceeds received in exchange for the obligation, or in some circumstances (for example, income taxes), at the amounts of cash
or cash equivalents expected to be paid to satisfy the liability in the normal course of business.
Current cost. The current cost of a similar asset offering equivalent utility.
Net realisable (settlement) value. The value of an asset that can be realized upon the sale of the asset, less a reasonable
estimate of the costs associated with either the eventual sale or the disposal of the asset in question.
Present value (discounted). The value, as of a specified date, of a future payment or series of future payments discounted to
the specified date (or to time period zero) at an appropriate discount rate.
IAS 1: Presentation of Financial Statements
General purpose financial statements (referred to as financial statements) are those intended to meet the needs of users who
are not in a position to require an entity to prepare reports tailored to their particular information needs.
Impracticable. Applying a requirement becomes impracticable when the entity cannot apply a requirement despite all
reasonable efforts to do so.
International Financial Reporting Standards (IFRS). Standards and interpretations adopted by the International Accounting
Standards Board (IASB). They include
(a) International Financial Reporting Standards
(b) International Accounting Standards
(c) Interpretations originated by the International Financial Reporting Interpretations
Committee (IFRIC) or the former Standing Interpretations Committee (SIC)
Material. An item is deemed to be material if its omission or misstatement would influence the economic decisions of a user
taken on the basis of the financial statements. Materiality is determined based on the items nature, size, and/or the surrounding
circumstances.
Notes to financial statements. A collection of information providing descriptions and disaggregated information relating to
items included in the financial statements (i.e., balance sheet, income statement, statement of changes in equity, and cash flow
statement), as well as those
that do not appear in the financial statements but are disclosed due to requirements of IFRS. Other comprehensive income
comprises items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as
required or permitted by other IFRSs.
Owners are holders of instruments classified as equity.
Profit or loss is the total of income less expenses, excluding the components of other comprehensive income.
Reclassification adjustments are amounts reclassified to profit or loss in the current period that were recognised in other
comprehensive income in the current or previous periods.
Total comprehensive income is 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 33: Earnings per Share


Antidilution is an increase in earnings per share or a reduction in loss per share resulting from the assumption that convertible
instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of
specified conditions.
A contingent share agreement is an agreement to issue shares that is dependent on the satisfaction of specified conditions.
Contingently issuable ordinary shares are ordinary shares issuable for little or no cash or other consideration upon the
satisfaction of specified conditions in a contingent share agreement.
Dilution is a reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible
instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of
specified conditions.
Options, warrants and their equivalents are financial instruments that give the holder the right to purchase ordinary shares.
An ordinary share is an equity instrument that is subordinate to all other classes of equity instruments.
A potential ordinary share is a financial instrument or other contract that may entitle its holder to ordinary shares.
Put options on ordinary shares are contracts that give the holder the right to sell ordinary shares at a specified price for a given
period.
Basic Earnings Per Share. The number of ordinary shares is the weighted-average number of ordinary shares outstanding
during the period.

IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors


Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and
presenting financial statements.
A change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of the
periodic consumption of an asset, that results from the assessment of the present status of, and expected future benefits and
obligations associated with, assets and liabilities. Changes in accounting estimates result from new information or new
developments and, accordingly, are not
corrections of errors.
International Financial Reporting Standards (IFRSs) are Standards and Interpretations adopted by the International
Accounting Standards Board (IASB). They comprise:
(a) International Financial Reporting Standards;
(b) International Accounting Standards; and
(c) Interpretations developed by the International Financial Reporting Interpretations Committee (IFRIC) or the
former Standing Interpretations Committee (SIC).
Material Omissions or misstatements of items are material if they could, individually or collectively, influence the economic
decisions that users make on the basis of the financial statements. Materiality depends on the size and nature of the omission or
misstatement judged in the surrounding circumstances. The size or nature of the item, or a combination of both, could be the
determining
factor.
Prior period errors are omissions from, and misstatements in, the entitys 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 authorised 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.
Retrospective application is applying a new accounting policy to transactions, other events and conditions as if that policy had
always been applied.
Retrospective restatement is correcting the recognition, measurement and disclosure of amounts of elements of financial
statements as if a prior period error had never occurred.
Impracticable Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to
do so. For a particular prior period, it is impracticable to apply a change in an accounting policy retrospectively or to make a
retrospective restatement to correct an error if:
(a) the effects of the retrospective application or retrospective restatement are not determinable;
(b) the retrospective application or retrospective restatement requires assumptions about what managements intent
would have been in that period; or
(c) the retrospective application or retrospective restatement requires significant estimates of amounts and it is
impossible to distinguish objectively information about those estimates that:
(i) provides evidence of circumstances that existed on the date(s) as at which those
amounts are to be recognised, measured or disclosed; and
(ii) would have been available when the financial statements for that prior period were
authorised for issue
from other information.
Prospective application of a change in accounting policy and of recognising 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) recognising the effect of the change in the accounting estimate in the current and future
periods affected by the change.

IFRS 5: Noncurrent Assets Held For Sale and Discontinued Operations


Cash-generating unit. The smallest identifiable group of assets that generates cash inflows that are largely independent of the
cash inflows from other assets or groups of assets.
Component of an entity. Operations and cash flows that can be clearly distinguished, operationally and for financial reporting
purposes, from the rest of the entity.
Costs to sell. The incremental costs directly attributable to the disposal of an asset (or disposal group), excluding finance costs
and income tax expense.
Current asset. An entity shall classify an asset as current when:
(a) it expects to realise the asset, or intends to sell or consume it, in its normal operating
cycle;
(b) it holds the asset primarily for the purpose of trading;
(c) it expects to realise the asset within twelve months after the reporting period; or
(d) the asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or
used to settle a liability for at least twelve months after the reporting period.
Discontinued operation. A component of an entity that either has been disposed of or is classified as held for sale and:
(a) represents a separate major line of business or geographical area of operations,
(b) is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations or
(c) is a subsidiary acquired exclusively with a view to resale.
Disposal group. A group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and
liabilities directly associated with those assets that will be transferred in the transaction. The group includes goodwill acquired
in a business combination if the group is a
Cash-generating unit. to which goodwill has been allocated in accordance with the requirements of paragraphs 8087 of IAS
36 Impairment of Assets (as revised in 2004) or if it is an operation within such a cash-generating unit.
Fair value. The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in
an arms length transaction.
Firm purchase commitment. An agreement with an unrelated party, binding on both parties and usually legally enforceable,
that
(a) specifies all significant terms, including the price and timing of the transactions, and
(b) includes a disincentive for non-performance that is sufficiently large to make performance highly probable.
Highly probable. Significantly more likely than probable.
Non-current asset. An asset that does not meet the definition of a current asset.
Probable. More likely than not.
Recoverable amount. The higher of an assets fair value less costs to sell and its value in use.
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.