Cash generating unit The smallest identifiable group of assets that generates

Cash generating unit the smallest identifiable group

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Cash-generating unit - The smallest identifiable group of assets that generates cash in- flows that are largely independent of the cash in- flows from other assets or groups of assets. Class of assets - A grouping of assets of a similar nature and use in an entity’s operations. Depreciation (amortization) - The systematic allocation of the depreciable amount of an asset over its useful life. Recoverable amount - The higher of an asset’s (or cash-generating unit’s) fair value less costs to sell and its value in use. 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. Value in use - The present value of the future cash - flows expected to be derived from an asset or cash generating unit. IAS 37: Provisions, Contingent Liabilities and Contingent Assets Contingent asset A possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity Contingent liability (a) A possible obligation that arises from past events and whose existence will be conformed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or IFRS and IAS Glossary of Terms 35
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(b) A present obligation that arises from past events but is not recognized because: (i) It is not probable that an out- owe of resources embodying economic benefits will be required to settle the obligation; or (ii) The amount of the obligation cannot be measured with sufficient reliability Legal obligation - An obligation that derives from: (a) a contract (through its explicit or implicit terms); (b) legislation; or (c) other operation of law Liability - A present obligation of the entity arising from past events, the settlement of which is expected to result in an out- owe from the entity of resources embodying economic benefits. Obligating event - An event that creates a legal or constructive obligation that results in an entity having no realistic alternative to settling that obligation. Obligation - A duty or responsibility to act or perform in a certain way. Obligations may be legally enforceable as a consequence of a binding contract or statutory requirement. Obligations also arise, however, from normal business practice, custom and a desire to maintain good business relations or act in an equitable manner. Offsetting - See ‘set-off, legal right of’’ Onerous contract - A contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it Provision - A liability of uncertain timing or amount.
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  • Ma'am Terese de Guzman
  • Balance Sheet, International Financial Reporting Standards, IAS Glossary of Terms

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