Cash and cash equivalents and Useful life: Difference between pages

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(Add quote from IAS 16 - https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards/english/2022/issued/part-a/ias-16-property-plant-and-equipment.pdf?bypass=on)
 
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''Financial reporting - balance sheet - assets.''
''Accounting''.
The length of time an asset is in use.


(CCE).
The asset should be depreciated over its useful life.


For financial reporting purposes, cash equivalents are:
*Short-term, highly liquid investments that are
*Readily convertible to known amounts of cash and
*Which are subject to an insignificant risk of changes in value.


:<span style="color:#4B0082">'''''Estimation of useful life for IAS 16 financial reporting is a matter of judgement'''''</span>


Examples of cash equivalents for financial reporting purposes include money market instruments, treasury bills, short-term government bonds, marketable securities and commercial paper.
:"The useful life of an asset is defined in terms of the asset’s expected utility to the entity.  


:The asset management policy of the entity may involve the disposal of assets after a specified time or after consumption of a specified proportion of the future economic benefits embodied in the asset.


Cash and cash equivalents are normally reported as a single aggregated figure in the primary statement of financial position (balance sheet).
:Therefore, the useful life of an asset may be shorter than its economic life.  


:The estimation of the useful life of the asset is a matter of judgement based on the experience of the entity with similar assets."


==See also==
:''IAS 16 - Property, plant and equipment - paragraph 57.''
*[[Aggregation]]
 
* [[Assets]]
 
* [[Balance sheet]]
== See also ==
*[[Cash]]
* [[Accounting]]
*[[Cash equivalents]]
* [[Asset management]]
*[[Cash flow]]
* [[Depreciating asset]]
*[[Cash flow statement]]
* [[Depreciation]]
*[[Commercial paper]]
* [[Economic life]]
*[[Cryptoassets]]
* [[Financial reporting]]
*[[Financial reporting]]
* [[IAS 16]]
*[[Government bonds]]
* [[Judgement]]
*[[Intangible assets]]
* [[Life]]
* [[Liquid]]
* [[Property, plant and equipment]]
* [[Liquidate]]
* [[Reporting entity]]
* [[Liquidity]]
* [[Short life asset]]
* [[Liquidity risk]]
* [[Useful economic life]]
*[[Money]]
* [[Utility]]
*[[Money market instrument]]
 
*[[Security]]
 
*[[Short term]]
==Other resource==
*[[Statement of financial position]]
*[https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards/english/2022/issued/part-a/ias-16-property-plant-and-equipment.pdf?bypass=on IAS 16 text]]
*[[Treasury bills]]
 
[[Category:Accounting,_tax_and_regulation]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Compliance_and_audit]]

Revision as of 21:12, 29 October 2023

Accounting.

The length of time an asset is in use.

The asset should be depreciated over its useful life.


Estimation of useful life for IAS 16 financial reporting is a matter of judgement
"The useful life of an asset is defined in terms of the asset’s expected utility to the entity.
The asset management policy of the entity may involve the disposal of assets after a specified time or after consumption of a specified proportion of the future economic benefits embodied in the asset.
Therefore, the useful life of an asset may be shorter than its economic life.
The estimation of the useful life of the asset is a matter of judgement based on the experience of the entity with similar assets."
IAS 16 - Property, plant and equipment - paragraph 57.


See also


Other resource

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