IFRIC 22 and Incremental cash flows: Difference between pages

Revision as of 14:19, 23 October 2012

In financial decision making, the incremental cash flows are those which will be different, depending on whether or not the decision is implemented.

It is only the incremental cash flows which should theoretically be taken account of in making the related financial decision.

For example, 'Sunk costs don't count'.

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-''Financial reporting - foreign exchange''.
+In financial decision making, the incremental cash flows are those which will be different, depending on whether or not the decision is implemented.
-IFRIC 22 is an Interpretation of IAS 21 (The Effects of Changes in Foreign Exchange Rates).
+It is only the incremental cash flows which should theoretically be taken account of in making the related financial decision.
-The Interpretation deals with consideration paid or receive in advance.
-It covers foreign currency transactions when an entity recognises a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration before the entity recognises the related asset, expense or income.
-Under IFRIC 22:
-*The date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability.
-*If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt.
-Effective from January 2018.
+For example, 'Sunk costs don't count'.
 == See also ==
-* [[Foreign exchange]]
+* [[Cashflow]]
-* [[IAS 21]]
+* [[Discounted cash flow]]
-* [[IFRIC]]
-* [[International Financial Reporting Standards]]
-[[Category:Compliance_and_audit]]