Unimaginative accounting terms to confuse non-accountants

The IAS board failed miserably in IFRS 13 with their ‘inputs’. They completely lacked any imagination by using level 1 inputs, level 2 inputs and level 3 inputs. This lack of imagination is, I suppose, useful because it is quite impossible the guess what they could mean without reading the standard.

Observable inputs and unobservable inputs are more descriptive and could perhaps be understood through their names, but in reality this is an illusion. An observable input is developed using publicly available market data. Whereas an unobservable input is the same as a level 3 input.

How about that for a surprise? There is no market data available to develop it and has to be invented by the users of the standard.

Doubling up

There are several standards which gave up the multiple term tactic and use only two or three, for instance with taxation, where, in IAS 12, they invented taxable temporary differences and deductible temporary differences.  

And then again with currency, we all know foreign currency. But IAS 21 invented two more: functional currency and presentation currency!

Another attempt came with obligation. Everyone has heard of a legal obligation but if one has not read IAS 37, no-one knows what a constructive obligation is.