IAS 1 and Inversion: Difference between pages

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International Accounting Standard 1, dealing with presentation of financial statements.  
1.


IAS 1 sets out the overall requirements for financial statements prepared under International Accounting Standards (IAS).
A term used in foreign exchange rate quotation.


These include the concepts of going concern, the accruals basis of accounting and the distinction between current and non-current assets and liabilities.


'''Example'''


IAS 1 requires a complete set of financial statements prepared under IAS to include:
Consider the historical FX quote:


*Statement of financial position
GBP 1 = 1.4598 - 1.4602 USD.
*Statement of profit or loss and other comprehensive income
*Statement of changes in equity
*Statement of cash flows


The base currency is GBP.


IAS 1 is issued by the International Accounting Standards Board.  
This is the currency there is a single unit of, to be exchanged for a variable number of USD.
 
 
The inversion of this FX quote means expressing the same price, but with the other currency as the base currency (USD here):
 
USD 1 = (1 / 1.4602) - (1 / 1.4598) GBP
 
USD 1 = 0.6848 - 0.6850 GBP.
 
 
In the inverted FX quote, USD is the currency there is a single unit of (to be exchanged for a variable number of GBP).
 
The term FX ''inverse quote'' is also used to refer to an FX inversion.
 
 
2.
 
In any market, the reversal of a normal - or commonly expected - relationship.
 
For example the situation of an Inverse yield curve, where longer maturities of funds are trading at LOWER yields than shorter-dated maturities (being the opposite of the normally expected upward-sloping relationship).
 
 
3.
 
More broadly, any reversal of a normal or expected relationship.
 
For example, a tax inversion.




== See also ==
== See also ==
* [[Accruals basis]]
* [[Base currency]]
* [[Assets]]
* [[Foreign exchange]] (FX)
* [[Current]]
* [[Inverse yield curve]]
* [[FRS 102]]
* [[Reciprocal]]
* [[Going concern]]
* [[Tax inversion]]
* [[International Accounting Standards]]
* [[International Financial Reporting Standards]]
* [[Liabilities]]
* [[Non-current]]
* [[Primary financial statements]]
* [[Primary statements]]
* [[Statement of cash flows]]
* [[Statement of changes in equity]]
* [[Statement of financial position]]
* [[Statement of profit or loss and other comprehensive income]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Manage_risks]]
[[Category:Treasury_operations_infrastructure]]

Latest revision as of 08:58, 6 July 2022

1.

A term used in foreign exchange rate quotation.


Example

Consider the historical FX quote:

GBP 1 = 1.4598 - 1.4602 USD.

The base currency is GBP.

This is the currency there is a single unit of, to be exchanged for a variable number of USD.


The inversion of this FX quote means expressing the same price, but with the other currency as the base currency (USD here):

USD 1 = (1 / 1.4602) - (1 / 1.4598) GBP

USD 1 = 0.6848 - 0.6850 GBP.


In the inverted FX quote, USD is the currency there is a single unit of (to be exchanged for a variable number of GBP).

The term FX inverse quote is also used to refer to an FX inversion.


2.

In any market, the reversal of a normal - or commonly expected - relationship.

For example the situation of an Inverse yield curve, where longer maturities of funds are trading at LOWER yields than shorter-dated maturities (being the opposite of the normally expected upward-sloping relationship).


3.

More broadly, any reversal of a normal or expected relationship.

For example, a tax inversion.


See also

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