Double entry and Recoverable amount: Difference between pages

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imported>Doug Williamson
(Link with Lease page.)
 
imported>Doug Williamson
(Expand definition.)
 
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1.
''Financial reporting - impairment''


''Accounting''
The higher of fair value less costs of disposal and value in use.


The dual aspect concept that every accounting transaction has two sides.


Therefore the balance sheet should always remain in balance.
Recoverable amount is a figure that recognises we have a choice about what to do with an asset.


We can either:


For example, if services are sold by a company for cash, the company's Sales figure increases AND its Cash increases. 
(1) Sell it; or


Taking another example, if a company borrows money, its Cash increases AND its Liabilities (to repay the money in the future) also increase.
(2) Carrying on using it.


This system is sometimes known as 'double entry bookkeeping'.




2.
Rationally, we would always make the choice that results in the greater value for the business.
 
 


An error resulting from the inappropriate duplication - or inappropriate repetition - of an entry (or part of an entry) in a financial information system or elsewhere.




== See also ==
== See also ==
* [[Balance sheet]]
* [[Carrying value]]
* [[Book entry]]
* [[Fair value]]
* [[Bookkeeping]]
* [[IAS 36]]
* [[Credit]]
* [[Impairment]]
* [[Debit]]
* [[Value in use]]
* [[Double counting]]
* [[Journal entry]]
* [[Lease]]
* [[Off balance sheet finance]]


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

Latest revision as of 15:36, 9 September 2020

Financial reporting - impairment

The higher of fair value less costs of disposal and value in use.


Recoverable amount is a figure that recognises we have a choice about what to do with an asset.

We can either:

(1) Sell it; or

(2) Carrying on using it.


Rationally, we would always make the choice that results in the greater value for the business.



See also