Realisation: Difference between revisions
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imported>Doug Williamson (Create the page. Source: ACT CertFin October 2015 Reading 1.1.1 section 4.7 page 5.) |
imported>Doug Williamson (Expand for tax and wider definition. Source: Oxford Dictionary of English, Third Edition, 2010.) |
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''Financial reporting''. | 1. ''Financial reporting''. | ||
The realisation concept in financial reporting requires that certain key events should have taken place before income and expenditure are recognised in the financial statements at the reporting date. | The realisation concept in financial reporting requires that certain key events should have taken place before income and expenditure are recognised in the financial statements at the reporting date. | ||
Cash does not necessarily have to have been received or paid by the reporting date, but risks and rewards of ownership have to have been transferred. | Cash does not necessarily have to have been received or paid by the reporting date, but risks and rewards of ownership have to have been transferred. | ||
2. In other contexts, 'realisation' generally refers to the conversion of assets, profits or liabilities into cash. | |||
Revision as of 13:29, 20 July 2015
1. Financial reporting.
The realisation concept in financial reporting requires that certain key events should have taken place before income and expenditure are recognised in the financial statements at the reporting date.
Cash does not necessarily have to have been received or paid by the reporting date, but risks and rewards of ownership have to have been transferred.
2. In other contexts, 'realisation' generally refers to the conversion of assets, profits or liabilities into cash.
