Extraordinary accounting terms

The authors of IAS 8 get completely mixed up with their terms. Retrospective application, retrospective restatement and prospective application are too much to take in on a first read.  But even reading each definition ten times does not make it easier.

Let’s take just one of them:

“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.”

Even simplifying the sentence to try to understand it is impossible. Why invent a name for a correction as if an error had never occurred?

Other peculiar accounting terms

Then they go out of their way to invent some peculiar accounting terms. What is a ‘bearer plant’ [1] or an ‘entity‑specific value’? [1]

Who could guess that an entity-specific value is the present value of future cash flows? One can imagine what a cash‑generating unit is. [2] But even imagination here  is not useful. A unit is not a unit at all but ‘the smallest identifiable group of assets’.  And then in IFRS 9 they throw in ‘derecognition of financial assets’.

[1] International Accounting Standard 16 Property, Plant and Equipment (IAS 16)

[2] International Accounting Standard 36 Impairment of Assets (IAS 36) 

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