Define an asset
A present economic resource controlled by the entity as a result of past events
Define an economic resource
A right that has the potential to produce economic benefits
Define a liability
A present obligation to transfer an economic resource as a result of past events
Define an obligation
A duty or responsibility that an entity has no practical ability to avoid
Name and define the four measurement bases
Historical cost: original amount paid
Current cost: amount that would be paid now for the same asset
Fair value: what it could be sold for
Value in use: how valuable the asset’s future earnings are today
What is stewardship?
Management’s responsibility to manage the business on behalf of owners, ensuring accountability and long-term protection of assets
How are liabilities and contingent liabilities treated under IAS 37? Probable → recognise a provision
Possible → disclose as a contingent liability
Remote → ignore How are contingent assets treated under IAS 37?
Virtually certain → recognise the asset
Probable → disclose
Possible → ignore
Remote → ignore
