Why do accountants define an asset using a past event? What does it mean? “As a result of past events” also appears in the definition of a liability and an obligation. I am writing rubbish, you might say, but the International Accounting Standards Board defines an asset as follows: “An asset is a present…
As a jargon technique, the International Financial Reporting Standards often choose a word and stick it onto others to invent accounting terms. The writers of IFRS 11 chose ‘joint’ from the well known accounting term ‘joint venture’ and invented five new accounting terms. “A joint arrangement is either a joint operation or a joint venture.”…
The term ‘practical expedients’ litters accounting standards on leasing and revenue recognition on both sides of the Atlantic and for once, both the Financial Accounting Standards Board and the International Accounting Standards Board agree to use the same term. A rather obscure term at that. Yet practical expedients are not defined. Some accountants know what…
Accountants have an unusual way of constructing jargon in standard costing. They take up to four common words, mostly nouns, string them together to make an accounting term and then use the initials. Their simplest variance is called Direct Material Cost Variance or DMCV. Direct is superfluous here because indirect is meaningless in this context….